FAC1502 Financial Accounting
Elementary Calculations
Examination TEST Questions and
Answers
Verified Solutions Latest Update
Question:
Liabilities
Answer:
Amount that company owes
Question:
Equity
Answer:
Amount invested in company by owners; owners claim no assets
Question:
Accounting equation
Answer:
Assets = liabilities + equity
Question:
Truism in business
Answer:
Company never receives greater than it gives & never gives greater than it receives
,Question:
4 Rules of debits & credits
Answer:
1. Debit amount received; credit amount given up
Question:
Debuts on left; credits on the right
Question:
In each transactions; list debits first (good) & credits last (bad)
Question:
Total debits = total credits
Question:
Making an ethical decision
Answer:
1. Identify ethical concerns-use personal ethics to recognize concern
Question:
Analyze options-consider all good & bad consequences
Question:
Make ethical decision-choose best option given circumstances
Question:
Fraud
Answer:
Intentional manipulation-focus on prevention. Once fraud is committed, loses are rarely
retrieved.
, Question:
Fraud Triangle
Answer:
Opportunity (low risk of being caught), Financial Pressure (incentive), Rationalization
(making situation justifiable)
Question:
GAAP (generally accepted accounting principles)
Answer:
Financial accounting is governed by concepts & rules.
Question:
Relevant info affects decision of user
Question:
Reliable info trusted by users
Question:
Comparable info aids in contrasting organizations
Question:
SEC-Securities and Exchange Commission
Answer:
Federal agency congress has charged to set reporting rules for org that sell ownership
shares to public
Question:
FASB (Financial Accounting Standards Board)
Answer:
Independent group of full-time members responsible for setting accounting rules
Elementary Calculations
Examination TEST Questions and
Answers
Verified Solutions Latest Update
Question:
Liabilities
Answer:
Amount that company owes
Question:
Equity
Answer:
Amount invested in company by owners; owners claim no assets
Question:
Accounting equation
Answer:
Assets = liabilities + equity
Question:
Truism in business
Answer:
Company never receives greater than it gives & never gives greater than it receives
,Question:
4 Rules of debits & credits
Answer:
1. Debit amount received; credit amount given up
Question:
Debuts on left; credits on the right
Question:
In each transactions; list debits first (good) & credits last (bad)
Question:
Total debits = total credits
Question:
Making an ethical decision
Answer:
1. Identify ethical concerns-use personal ethics to recognize concern
Question:
Analyze options-consider all good & bad consequences
Question:
Make ethical decision-choose best option given circumstances
Question:
Fraud
Answer:
Intentional manipulation-focus on prevention. Once fraud is committed, loses are rarely
retrieved.
, Question:
Fraud Triangle
Answer:
Opportunity (low risk of being caught), Financial Pressure (incentive), Rationalization
(making situation justifiable)
Question:
GAAP (generally accepted accounting principles)
Answer:
Financial accounting is governed by concepts & rules.
Question:
Relevant info affects decision of user
Question:
Reliable info trusted by users
Question:
Comparable info aids in contrasting organizations
Question:
SEC-Securities and Exchange Commission
Answer:
Federal agency congress has charged to set reporting rules for org that sell ownership
shares to public
Question:
FASB (Financial Accounting Standards Board)
Answer:
Independent group of full-time members responsible for setting accounting rules
