BUS-A201 EXAM 1 QUESTIONS WITH ACCURATE
ANSWERS
Accrual System of Accounting correct answer Revenues are booked when assets
are created and expenses are recorded when liabilities arise.
Annuity Due correct answer At the BEGINNING of the period
Assets correct answer Represent items that will bring future economic benefit.
Auditor's Report correct answer A short letter written by the auditor by the
auditor that describes the activities of the audit and comments on the financial
position and operations.
Balance Sheet correct answer Lists assets, liabilities, and shareholders' equity,
statement of the company's financial position as of a certain date.
Common Stock correct answer Represents the initial investments by owners.
Conservatism correct answer States that when in doubt, financial statements
should understate assets, overstate liabilities.
Consistency Principle correct answer Companies should choose a method and use
the same one from period to the next.
Consumption Expenditures correct answer Enjoyed immediately and have no
future value.
, Current Payables and Receivables Valuation correct answer Fair Market Value
Dividends correct answer The assets paid to owners as a return for their initial
investments.
Economic Consequence Perspective correct answer Considering and
understanding how such events affect the financial statements.
Economic Entity Assumption correct answer Individual companies must be
entities in and of themselves, separate and distinct from both their owners and all
other entities.
Expenses correct answer Measure of the asset outflows (costs) associated with
selling these products and services.
Fair Market Value correct answer Current sales price in output market.
Financial Accounting Standards Board (FASB) correct answer Lends credibility to
the financial statements and helps facilitate meaningful comparisons across
different companies.
Financing Activities correct answer Involve raising capital through equity or debt
issuances and the related payments to capital providers such as debt payments,
dividends, and share repurchases.
ANSWERS
Accrual System of Accounting correct answer Revenues are booked when assets
are created and expenses are recorded when liabilities arise.
Annuity Due correct answer At the BEGINNING of the period
Assets correct answer Represent items that will bring future economic benefit.
Auditor's Report correct answer A short letter written by the auditor by the
auditor that describes the activities of the audit and comments on the financial
position and operations.
Balance Sheet correct answer Lists assets, liabilities, and shareholders' equity,
statement of the company's financial position as of a certain date.
Common Stock correct answer Represents the initial investments by owners.
Conservatism correct answer States that when in doubt, financial statements
should understate assets, overstate liabilities.
Consistency Principle correct answer Companies should choose a method and use
the same one from period to the next.
Consumption Expenditures correct answer Enjoyed immediately and have no
future value.
, Current Payables and Receivables Valuation correct answer Fair Market Value
Dividends correct answer The assets paid to owners as a return for their initial
investments.
Economic Consequence Perspective correct answer Considering and
understanding how such events affect the financial statements.
Economic Entity Assumption correct answer Individual companies must be
entities in and of themselves, separate and distinct from both their owners and all
other entities.
Expenses correct answer Measure of the asset outflows (costs) associated with
selling these products and services.
Fair Market Value correct answer Current sales price in output market.
Financial Accounting Standards Board (FASB) correct answer Lends credibility to
the financial statements and helps facilitate meaningful comparisons across
different companies.
Financing Activities correct answer Involve raising capital through equity or debt
issuances and the related payments to capital providers such as debt payments,
dividends, and share repurchases.
