MHA 706 Mod 2 - Income Statement and
Statement of Changes in Equity Q & As
(Verified Answers) 2026
What is financial accounting? - Correct Answers ✅Identify,
record, and communicates operational results and status of
organization.
What is the difference between finance and accounting? -
Correct Answers ✅Accounting - Emphasis on recording
transaction
Finance - records transaction and analyze data
What are the 4 most important financial accounting
information? - Correct Answers ✅- Income Statement
- Statement of changes in equity
- Balance sheet
- Statement of cash flows
Does not-for-profit need to prepare financial statements? -
Correct Answers ✅Yes - They must report in the IRS Form
990
What is the SEC? - Correct Answers ✅- Securities and
Exchange Commission
- Legal authority to regulate the form and content of financial
statements
, MHA 706 Mod 2 - Income Statement and
Statement of Changes in Equity Q & As
(Verified Answers) 2026
What organizations does the SEC rely on for Financial
standards? (3) - Correct Answers ✅- Financial Accounting
Standards Board (FASB)
- Industry Committees of the American Institute of Certified
Public Accountants (AICPA)
- Principles and Practices Board of the Healthcare Financial
Management Association (HFMA)
What is Generally Accepted Accounting Principles (GAAP)? -
Correct Answers ✅- Conventions / Rulings that evolved
from the three standardization organization
- Guidelines for the preparation of financial accounting
statements
- Only applies to financial accounting statements (external
and not for internal)
- Remains dynamic
What are the 4 ASSUMPTIONS in the Generally Accepted
Accounting Principles? - Correct Answers ✅- Accounting
entity: statements is meant for the specific company and not
for other people
- Going concern: assumed that entity will have indefinite
lifetime. Not liquidated in the near future
Statement of Changes in Equity Q & As
(Verified Answers) 2026
What is financial accounting? - Correct Answers ✅Identify,
record, and communicates operational results and status of
organization.
What is the difference between finance and accounting? -
Correct Answers ✅Accounting - Emphasis on recording
transaction
Finance - records transaction and analyze data
What are the 4 most important financial accounting
information? - Correct Answers ✅- Income Statement
- Statement of changes in equity
- Balance sheet
- Statement of cash flows
Does not-for-profit need to prepare financial statements? -
Correct Answers ✅Yes - They must report in the IRS Form
990
What is the SEC? - Correct Answers ✅- Securities and
Exchange Commission
- Legal authority to regulate the form and content of financial
statements
, MHA 706 Mod 2 - Income Statement and
Statement of Changes in Equity Q & As
(Verified Answers) 2026
What organizations does the SEC rely on for Financial
standards? (3) - Correct Answers ✅- Financial Accounting
Standards Board (FASB)
- Industry Committees of the American Institute of Certified
Public Accountants (AICPA)
- Principles and Practices Board of the Healthcare Financial
Management Association (HFMA)
What is Generally Accepted Accounting Principles (GAAP)? -
Correct Answers ✅- Conventions / Rulings that evolved
from the three standardization organization
- Guidelines for the preparation of financial accounting
statements
- Only applies to financial accounting statements (external
and not for internal)
- Remains dynamic
What are the 4 ASSUMPTIONS in the Generally Accepted
Accounting Principles? - Correct Answers ✅- Accounting
entity: statements is meant for the specific company and not
for other people
- Going concern: assumed that entity will have indefinite
lifetime. Not liquidated in the near future
