ACCOUNTING 28TH EDITION ACTUAL
EXAM PAPER 2026 QUESTIONS WITH
SOLUTIONS GRADED A+
◉ Partnership
Answer: A business owned by two or more people. It is easy to form
and combines different skills, but partners usually have personal
liability.
◉ Corporation
Answer: A business that is legally separate from its owners. Owners
usually have limited liability, and the company can raise money more
easily, but it may face double taxation.
◉ Internal Users
Answer: People inside the company who use accounting
information, such as managers, owners, and employees.
◉ External Users
,Answer: People outside the company who use accounting
information, such as investors, creditors, banks, and government
agencies.
◉ Investing Activities
Answer: Activities involving buying or selling long-term assets, like
equipment, buildings, or investments.
◉ Financing Activities
Answer: Activities involving obtaining money from investors or
creditors, such as issuing stock, borrowing money, or paying
dividends.
◉ Operating Activities
Answer: The main day-to-day activities of a business, such as selling
goods, providing services, paying expenses, and collecting cash.
◉ Income Statement
Answer: A financial statement that shows revenues, expenses, and
net income or net loss for a period of time.
◉ Retained Earnings Statement
Answer: A financial statement that shows changes in retained
earnings, including net income and dividends.
, ◉ Balance Sheet
Answer: A financial statement that shows assets, liabilities, and
stockholders' equity at a specific point in time.
◉ Statement of Cash Flows
Answer: A financial statement that shows cash inflows and outflows
from operating, investing, and financing activities.
◉ Annual Report
Answer: A report companies prepare for stockholders that includes
financial statements, management discussion, notes, and other
company information.
◉ Classified Balance Sheet
Answer: A balance sheet that organizes assets and liabilities into
categories, such as current assets, long-term liabilities, and
stockholders' equity.
◉ Current Assets
Answer: Assets expected to be used or converted into cash within
one year, such as cash, accounts receivable, inventory, supplies, and
prepaid expenses.
EXAM PAPER 2026 QUESTIONS WITH
SOLUTIONS GRADED A+
◉ Partnership
Answer: A business owned by two or more people. It is easy to form
and combines different skills, but partners usually have personal
liability.
◉ Corporation
Answer: A business that is legally separate from its owners. Owners
usually have limited liability, and the company can raise money more
easily, but it may face double taxation.
◉ Internal Users
Answer: People inside the company who use accounting
information, such as managers, owners, and employees.
◉ External Users
,Answer: People outside the company who use accounting
information, such as investors, creditors, banks, and government
agencies.
◉ Investing Activities
Answer: Activities involving buying or selling long-term assets, like
equipment, buildings, or investments.
◉ Financing Activities
Answer: Activities involving obtaining money from investors or
creditors, such as issuing stock, borrowing money, or paying
dividends.
◉ Operating Activities
Answer: The main day-to-day activities of a business, such as selling
goods, providing services, paying expenses, and collecting cash.
◉ Income Statement
Answer: A financial statement that shows revenues, expenses, and
net income or net loss for a period of time.
◉ Retained Earnings Statement
Answer: A financial statement that shows changes in retained
earnings, including net income and dividends.
, ◉ Balance Sheet
Answer: A financial statement that shows assets, liabilities, and
stockholders' equity at a specific point in time.
◉ Statement of Cash Flows
Answer: A financial statement that shows cash inflows and outflows
from operating, investing, and financing activities.
◉ Annual Report
Answer: A report companies prepare for stockholders that includes
financial statements, management discussion, notes, and other
company information.
◉ Classified Balance Sheet
Answer: A balance sheet that organizes assets and liabilities into
categories, such as current assets, long-term liabilities, and
stockholders' equity.
◉ Current Assets
Answer: Assets expected to be used or converted into cash within
one year, such as cash, accounts receivable, inventory, supplies, and
prepaid expenses.
