Aaae ace airport finance mod 2 2025 update|comprehensive questions and verified answers
(complete solutions) exam|grade a+!!
Cash Basis Accounting - -records revenues when cash is received and expenses when cash is
paid
--Accrual Basis Accounting - -reporting income when it is earned and expenses when they
are incurred, does not matter when cash is exchanged
--Modified Accrual Accounting - -recognized 1) revenues when the resulting current financial
resources are both measurable and available to be used and 2) expenditures when they are
incurred
--GAAP Principles - -Recognition, measurement, presentation, disclosure
--Operating Budget - -budget for day-to-day expenses covering the span of a year
--Capital Budget - -budget for major capital, or investment, expenditures covering up to 5-10
years, also subject to depreciation on accounting records
--Budget Cycle - -Planning, preparation, approval, execution (or expenditure), analysis, audit
--Incremental Budget - -Increases the previous year's budget by a percentage
--Zero-Based Budget - -allocates resources as if each budget was brand new not taking into
account last year's budget
--Management by Objectives (MBO) - -Setting goals and then creating a budget to meet
those goals
--Activity-Based Budgeting (ABB) - -Budgeting approach that focuses on the budgeted cost of
the activities necessary to accomplish functions.
1. Identify activities and their cost drivers
2. Forecast number of units of cost driver for required activity level
3. Calculate the cost driver (cost per unit of activity)
--Statement of Net Position/Assets - -Balance Sheet
--Statement of Revenues, Expenses, and Changes in Net Position/Assets - -Income
Statement
--Statement of Cash Flows - -Statement of Cash Flows
--Audit - unqualified opinion - -Financial statements are presented fairly in accordance with
GAAP
--Audit - qualified opinion - -Auditor is unable to state financial statements in compliance
with GAAP either due to a few misstatements, portions are not presented in accordance
(complete solutions) exam|grade a+!!
Cash Basis Accounting - -records revenues when cash is received and expenses when cash is
paid
--Accrual Basis Accounting - -reporting income when it is earned and expenses when they
are incurred, does not matter when cash is exchanged
--Modified Accrual Accounting - -recognized 1) revenues when the resulting current financial
resources are both measurable and available to be used and 2) expenditures when they are
incurred
--GAAP Principles - -Recognition, measurement, presentation, disclosure
--Operating Budget - -budget for day-to-day expenses covering the span of a year
--Capital Budget - -budget for major capital, or investment, expenditures covering up to 5-10
years, also subject to depreciation on accounting records
--Budget Cycle - -Planning, preparation, approval, execution (or expenditure), analysis, audit
--Incremental Budget - -Increases the previous year's budget by a percentage
--Zero-Based Budget - -allocates resources as if each budget was brand new not taking into
account last year's budget
--Management by Objectives (MBO) - -Setting goals and then creating a budget to meet
those goals
--Activity-Based Budgeting (ABB) - -Budgeting approach that focuses on the budgeted cost of
the activities necessary to accomplish functions.
1. Identify activities and their cost drivers
2. Forecast number of units of cost driver for required activity level
3. Calculate the cost driver (cost per unit of activity)
--Statement of Net Position/Assets - -Balance Sheet
--Statement of Revenues, Expenses, and Changes in Net Position/Assets - -Income
Statement
--Statement of Cash Flows - -Statement of Cash Flows
--Audit - unqualified opinion - -Financial statements are presented fairly in accordance with
GAAP
--Audit - qualified opinion - -Auditor is unable to state financial statements in compliance
with GAAP either due to a few misstatements, portions are not presented in accordance
