Financial Accounting Exam 1- Exam Questions and Answers | Verified
Study Guide | 2026/2027
creditors - correct answer-persons or entities to whom a company owes money
amount owed to creditors - correct answer-liabilities
note payable - correct answer-liability to the bank
bonds payable - correct answer-debt securities sold to investors that must be
repaid at a particular date some years in the future
common stock - correct answer-the total amount paid in by stockholders for the
shares they purchase
dividends - correct answer-payments of cash from a corporation to its
stockholders
assets - correct answer-resources owned by a business
revenue - correct answer-the increase in assets or decrease in liabilities resulting
from the sale of goods or the performance of services in the normal course of
business
, supplies - correct answer-assets used in day-to-day operations
inventory - correct answer-assets that are goods available for future sales to
customers
account receivable - correct answer-the right to receive money in the future
expenses - correct answer-the cost of assets consumed or services used in the
process of generating revenues
accounts payable - correct answer-the obligation to pay for goods
income statement - correct answer-to show how successfully your business
performed during a period of time, you report its revenues and expenses and
show net income or loss for a period of time
retained earnings statement - correct answer-to indicate how much previous
income was distributed to you and the owners of your business in the form of
dividends in a specific period of time, and how much was retained in the business
to allow for future growth
balance sheet - correct answer-to present a picture at a point in time of what
your business owns (assets) and what it owes (liabilities)
statement of cash flows - correct answer-to show where your business obtained
cash during a period of time and how that cash was used
Study Guide | 2026/2027
creditors - correct answer-persons or entities to whom a company owes money
amount owed to creditors - correct answer-liabilities
note payable - correct answer-liability to the bank
bonds payable - correct answer-debt securities sold to investors that must be
repaid at a particular date some years in the future
common stock - correct answer-the total amount paid in by stockholders for the
shares they purchase
dividends - correct answer-payments of cash from a corporation to its
stockholders
assets - correct answer-resources owned by a business
revenue - correct answer-the increase in assets or decrease in liabilities resulting
from the sale of goods or the performance of services in the normal course of
business
, supplies - correct answer-assets used in day-to-day operations
inventory - correct answer-assets that are goods available for future sales to
customers
account receivable - correct answer-the right to receive money in the future
expenses - correct answer-the cost of assets consumed or services used in the
process of generating revenues
accounts payable - correct answer-the obligation to pay for goods
income statement - correct answer-to show how successfully your business
performed during a period of time, you report its revenues and expenses and
show net income or loss for a period of time
retained earnings statement - correct answer-to indicate how much previous
income was distributed to you and the owners of your business in the form of
dividends in a specific period of time, and how much was retained in the business
to allow for future growth
balance sheet - correct answer-to present a picture at a point in time of what
your business owns (assets) and what it owes (liabilities)
statement of cash flows - correct answer-to show where your business obtained
cash during a period of time and how that cash was used
