ACC 200 EXAM 1 QUESTIONS WITH VERIFIED ANSWERS
Fundamental Accounting Equation - Answers - Assets= liabilities + Owners Equity
What are the two components of Stockholder equity? - Answers - Common Stock and Retained
Earnings
What is the group that creates accounting standards - Answers - FASB- Financial Accounting
Standards Board
What gives the board of directors the right to change the CEO? - Answers - Stockholders elect
the board, therefore giving them the power to change the executives who run the company.
What three things do you need to recognize revenue? - Answers - Implied or explicit agreement
Known Price
Effort to complete the transaction
What is the purpose of adjusting entries - Answers - To assign revenue and expenses to their
correct period.
Accrual - Answers - Revenue or expense that precedes the cash flow.
Deferral - Answers - Revenue or expense that follows the cash flow.
What is the Revenue Concept - Answers - It is a concept dealing with when you should record
the revenue.
What is the Matching Concept - Answers - Making sure your revenues and expenses occur in
the same period.
When do you recognize revenues and expenses under ACCRUAL accounting method? -
Answers - Whenever the money is earned.
When do you recognize revenues and expenses under the CASH accounting method? -
Answers - Cash must be exchanged to record the entry.
When can you use reversing entries? - Answers - When a liability or asset has been increased
in an adjusting entry.
Where do we close dividends to? - Answers - Retained earnings?
What is double taxation? - Answers - 1. A major disadvantage for Corporations.
2. When a company's income is taxed and the income of the shareholders is taxed.
Katie Sold Common Stock in the amount of $100,000 cash. Record the transaction. - Answers -
Cash $100,000
Common Stock $100,000
Fundamental Accounting Equation - Answers - Assets= liabilities + Owners Equity
What are the two components of Stockholder equity? - Answers - Common Stock and Retained
Earnings
What is the group that creates accounting standards - Answers - FASB- Financial Accounting
Standards Board
What gives the board of directors the right to change the CEO? - Answers - Stockholders elect
the board, therefore giving them the power to change the executives who run the company.
What three things do you need to recognize revenue? - Answers - Implied or explicit agreement
Known Price
Effort to complete the transaction
What is the purpose of adjusting entries - Answers - To assign revenue and expenses to their
correct period.
Accrual - Answers - Revenue or expense that precedes the cash flow.
Deferral - Answers - Revenue or expense that follows the cash flow.
What is the Revenue Concept - Answers - It is a concept dealing with when you should record
the revenue.
What is the Matching Concept - Answers - Making sure your revenues and expenses occur in
the same period.
When do you recognize revenues and expenses under ACCRUAL accounting method? -
Answers - Whenever the money is earned.
When do you recognize revenues and expenses under the CASH accounting method? -
Answers - Cash must be exchanged to record the entry.
When can you use reversing entries? - Answers - When a liability or asset has been increased
in an adjusting entry.
Where do we close dividends to? - Answers - Retained earnings?
What is double taxation? - Answers - 1. A major disadvantage for Corporations.
2. When a company's income is taxed and the income of the shareholders is taxed.
Katie Sold Common Stock in the amount of $100,000 cash. Record the transaction. - Answers -
Cash $100,000
Common Stock $100,000
