MGA 201 FINAL EXAM {LATEST 2026 -2027
update} QUESTIONS AND ANSWERS 100%
CORRECT
Preparing a Classified Balance Sheet - correct answer -Current assets will be used up
or turned into cash within the next 12 months of the balance sheet date.
-Current Liabilities are debts and other obligations that will be paid or fulfilled within
12 months of the balance sheet date.
Operating Activites - correct answer Operating activities include buying goods and
services from suppliers and employees and selling goods and services to customers
and then collecting cash from them.
Income Statement Accounts - correct answer Who: name of business
What: title of business
When: accounting period
,Total amount earned, total expenses incurred, difference between total revenues and
total expenses (net income)
Time Period Assumption - correct answer Dividing the company's long life into shorter
chunks of time such as months, quarters, and years.
Cash Basis Accounting - correct answer -Cash basis accounting records revenues
when cash is received and expenses when cash is paid.
Accural Basis Accounting - correct answer GAAP/IFRS-> Accrual Basis Accounting
- Under the accrual basis of accounting, revenues are reported on the income
statement when they are earned.
-Under the accrual basis of accounting, expenses are matched with the related
revenues and/or are reported when the expense occurs, not when the cash is paid.
,-The result of accrual accounting is an income statement that better measures the
profitability of a company during a specific time period.
Revenue Recognition Principle - correct answer -The accounting guideline requiring
that revenues be shown on the income statement in the period in which they are
earned, not in the period when the cash is collected. This is part of the accrual basis of
accounting
Expense Recognition Principle("Matching") - correct answer Timing of reporting
expenses vs. Cash payments
Record expenses in the same period as the revenues with which they can be
reasonably associated.
Part of Accrual basis accounting
Net Profit Margin - correct answer NPM = Net Income / Revenue
, Adjustments for Income Statement - correct answer -Revenues are recorded when
earned
-Expenses are recorded in the same period as the revenues to which they relate
Adjustments for Balance Sheet - correct answer -Assets are reported at amounts
representing the economic benefits that remain at the end of the period
-Liabilities are reported at amounts owed at the end of the period
Adjustment Analysis - correct answer -Determine the necessary adjustments to make
to the accounting records
-Without adjustments the financial statements present and incomplete and misleading
picture of the company's financial performance.
update} QUESTIONS AND ANSWERS 100%
CORRECT
Preparing a Classified Balance Sheet - correct answer -Current assets will be used up
or turned into cash within the next 12 months of the balance sheet date.
-Current Liabilities are debts and other obligations that will be paid or fulfilled within
12 months of the balance sheet date.
Operating Activites - correct answer Operating activities include buying goods and
services from suppliers and employees and selling goods and services to customers
and then collecting cash from them.
Income Statement Accounts - correct answer Who: name of business
What: title of business
When: accounting period
,Total amount earned, total expenses incurred, difference between total revenues and
total expenses (net income)
Time Period Assumption - correct answer Dividing the company's long life into shorter
chunks of time such as months, quarters, and years.
Cash Basis Accounting - correct answer -Cash basis accounting records revenues
when cash is received and expenses when cash is paid.
Accural Basis Accounting - correct answer GAAP/IFRS-> Accrual Basis Accounting
- Under the accrual basis of accounting, revenues are reported on the income
statement when they are earned.
-Under the accrual basis of accounting, expenses are matched with the related
revenues and/or are reported when the expense occurs, not when the cash is paid.
,-The result of accrual accounting is an income statement that better measures the
profitability of a company during a specific time period.
Revenue Recognition Principle - correct answer -The accounting guideline requiring
that revenues be shown on the income statement in the period in which they are
earned, not in the period when the cash is collected. This is part of the accrual basis of
accounting
Expense Recognition Principle("Matching") - correct answer Timing of reporting
expenses vs. Cash payments
Record expenses in the same period as the revenues with which they can be
reasonably associated.
Part of Accrual basis accounting
Net Profit Margin - correct answer NPM = Net Income / Revenue
, Adjustments for Income Statement - correct answer -Revenues are recorded when
earned
-Expenses are recorded in the same period as the revenues to which they relate
Adjustments for Balance Sheet - correct answer -Assets are reported at amounts
representing the economic benefits that remain at the end of the period
-Liabilities are reported at amounts owed at the end of the period
Adjustment Analysis - correct answer -Determine the necessary adjustments to make
to the accounting records
-Without adjustments the financial statements present and incomplete and misleading
picture of the company's financial performance.
