ACCT 229 TAMU 2026 COMPREHENSIVE EXN
QUESTIONS AND ANSWERS RATED A+
✔✔accounts payable - ✔✔current liability
✔✔wages payable - ✔✔current liability
✔✔accrued expense - ✔✔current liability
✔✔unearned revenue - ✔✔current liability
✔✔notes payable - ✔✔current liability
✔✔stockholder equity - ✔✔claims of owners against the net assets of the firm
✔✔Statement of Cash Flows - ✔✔identifies sources and uses of cash
✔✔ - ✔✔
✔✔3 types of businesses - ✔✔sole proprietorship, partnership, corporation
✔✔unlimited liability - ✔✔sole proprietorship & partnership
✔✔limited liability - ✔✔corporation
✔✔Sole Proprietorship - ✔✔one owner
advantage: easy to form
separate entity for accounting purposes
not a separate entity for legal purposes or tax purposes
✔✔Partnership - ✔✔two or more owners
separate entity for accounting purposes
not a separate entity for legal or tax purposes
✔✔Corporations - ✔✔business incorporated under the laws of a particular state.
Advantages: limited liability, continuity of life, ease in transfer of stock (ownership),
opportunity to raise large amounts of money by selling shares of stock to a large
number of people.
✔✔3 types of business activities - ✔✔financing, investing, operating
✔✔Operating Activities - ✔✔everyday activities
-sell inventory, pay employees
, ✔✔Investing Activities - ✔✔how you grow your company
-buying building, equipment, vehicles, fixtures
✔✔Financing Activities - ✔✔how you pay for your growth
-borrow money: temporary financing
-issue stock: permanent
✔✔4 financial statements - ✔✔Income statement
Statement of Retained Earnings
Balance Sheet
Statement of Cash Flows
✔✔What does a balance sheet show? - ✔✔Shows the financial position of a company
at a point in time. A = L + SHE
✔✔Assests - ✔✔what a company owns, or what is owed to a company
✔✔Laiabilities - ✔✔what the company owes
✔✔Stockholders Equity - ✔✔ownership. (common stock & retained earnings)
✔✔Monetary Unity Assumption - ✔✔Only transactions that can be expressed in terms
of money can be included in the accounting records
✔✔Economic Entity Assumption - ✔✔Activities of the business are separate from
activities of the owners
✔✔Time Period Assumption - ✔✔The long life of a company can be reported over a
series of shorter time periods. Makes it possible to prepare the Income Statements for a
specific time period.
✔✔Going Concern Assumption - ✔✔The company will not go out of business in the
near future. Not liquidating.
✔✔Historical Cost Principle - ✔✔record assets at the cost paid to acquire them
✔✔Full Discloser Principle - ✔✔Provide all information sufficiently important to influence
decision
✔✔GAAP - ✔✔Generally Accepted Accounting Principles. Rules and assumptions
under which financial statements must be prepared. (USA).
✔✔SEC - ✔✔Securities and Exchange Commission.
-ultimate authority -THE ENFORCER
QUESTIONS AND ANSWERS RATED A+
✔✔accounts payable - ✔✔current liability
✔✔wages payable - ✔✔current liability
✔✔accrued expense - ✔✔current liability
✔✔unearned revenue - ✔✔current liability
✔✔notes payable - ✔✔current liability
✔✔stockholder equity - ✔✔claims of owners against the net assets of the firm
✔✔Statement of Cash Flows - ✔✔identifies sources and uses of cash
✔✔ - ✔✔
✔✔3 types of businesses - ✔✔sole proprietorship, partnership, corporation
✔✔unlimited liability - ✔✔sole proprietorship & partnership
✔✔limited liability - ✔✔corporation
✔✔Sole Proprietorship - ✔✔one owner
advantage: easy to form
separate entity for accounting purposes
not a separate entity for legal purposes or tax purposes
✔✔Partnership - ✔✔two or more owners
separate entity for accounting purposes
not a separate entity for legal or tax purposes
✔✔Corporations - ✔✔business incorporated under the laws of a particular state.
Advantages: limited liability, continuity of life, ease in transfer of stock (ownership),
opportunity to raise large amounts of money by selling shares of stock to a large
number of people.
✔✔3 types of business activities - ✔✔financing, investing, operating
✔✔Operating Activities - ✔✔everyday activities
-sell inventory, pay employees
, ✔✔Investing Activities - ✔✔how you grow your company
-buying building, equipment, vehicles, fixtures
✔✔Financing Activities - ✔✔how you pay for your growth
-borrow money: temporary financing
-issue stock: permanent
✔✔4 financial statements - ✔✔Income statement
Statement of Retained Earnings
Balance Sheet
Statement of Cash Flows
✔✔What does a balance sheet show? - ✔✔Shows the financial position of a company
at a point in time. A = L + SHE
✔✔Assests - ✔✔what a company owns, or what is owed to a company
✔✔Laiabilities - ✔✔what the company owes
✔✔Stockholders Equity - ✔✔ownership. (common stock & retained earnings)
✔✔Monetary Unity Assumption - ✔✔Only transactions that can be expressed in terms
of money can be included in the accounting records
✔✔Economic Entity Assumption - ✔✔Activities of the business are separate from
activities of the owners
✔✔Time Period Assumption - ✔✔The long life of a company can be reported over a
series of shorter time periods. Makes it possible to prepare the Income Statements for a
specific time period.
✔✔Going Concern Assumption - ✔✔The company will not go out of business in the
near future. Not liquidating.
✔✔Historical Cost Principle - ✔✔record assets at the cost paid to acquire them
✔✔Full Discloser Principle - ✔✔Provide all information sufficiently important to influence
decision
✔✔GAAP - ✔✔Generally Accepted Accounting Principles. Rules and assumptions
under which financial statements must be prepared. (USA).
✔✔SEC - ✔✔Securities and Exchange Commission.
-ultimate authority -THE ENFORCER
