LSUS MHA 706 MIDTERM 200 CERTIFICATION
EVALUATION EXAMS 2026 SOLVED
QUESTIONS WITH FULL SOLUTION
◉ Do not for profit organizations have to prepare financial
statements?
Answer: Yes- they also have stakeholders and managers that have an
interest in financial reporting
◉ Should the preparation and presentation of financial accounting
data be regulated?
Answer: Yes, it is important to have financial reporting that is
accurate and based on reliable data.
◉ SEC
Answer: has legal authority to regulate the form and content of
financial statements
◉ GAAP- applies only to financial accounting statements
Answer: The conventions that have evolved from the
pronouncements and rulings of the implementing organizations
constitute a set of guidelines for the preparation of financial
accounting statements
,◉ Does GAAP remain static over time?
Answer: no, because business practices are continuously evolving, so
GAAP also has to adapt accordingly.
◉ Assumptions
Answer: accounting entity, going concern, periodicity, and monetary
unit
◉ Accounting entity
Answer: the specific entity for which the statements apply can be
defined
◉ Going concern
Answer: it is assumed that the entity will have an indefinite lifetime
rather than be liquidated in the near future
◉ Monetary unit
Answer: in the US, the unit is the US dollar, unadjusted for inflation
and deflation
◉ Historical costs
, Answer: Requires most assets to be valued at acquisition (historical)
costs rather than fair market (current) value
◉ Revenue recognition
Answer: Revenues must be recognized in the period in which they
are realizable and earned
◉ Expense matching
Answer: Expenses must be matched (in time) to the related
revenues
◉ Full disclosure
Answer: Financial statements must contain a complete picture of the
economic (financial) events of the organization
◉ Which two principles are related?
Answer: Revenue recognition and full disclosure- financial
statements must capture a complete picture of the economic or
financial events of the organization
◉ Materiality
Answer: To keep statements manageable, only entries that are
important to the operational and financial status of the organization
need be separately identified
EVALUATION EXAMS 2026 SOLVED
QUESTIONS WITH FULL SOLUTION
◉ Do not for profit organizations have to prepare financial
statements?
Answer: Yes- they also have stakeholders and managers that have an
interest in financial reporting
◉ Should the preparation and presentation of financial accounting
data be regulated?
Answer: Yes, it is important to have financial reporting that is
accurate and based on reliable data.
◉ SEC
Answer: has legal authority to regulate the form and content of
financial statements
◉ GAAP- applies only to financial accounting statements
Answer: The conventions that have evolved from the
pronouncements and rulings of the implementing organizations
constitute a set of guidelines for the preparation of financial
accounting statements
,◉ Does GAAP remain static over time?
Answer: no, because business practices are continuously evolving, so
GAAP also has to adapt accordingly.
◉ Assumptions
Answer: accounting entity, going concern, periodicity, and monetary
unit
◉ Accounting entity
Answer: the specific entity for which the statements apply can be
defined
◉ Going concern
Answer: it is assumed that the entity will have an indefinite lifetime
rather than be liquidated in the near future
◉ Monetary unit
Answer: in the US, the unit is the US dollar, unadjusted for inflation
and deflation
◉ Historical costs
, Answer: Requires most assets to be valued at acquisition (historical)
costs rather than fair market (current) value
◉ Revenue recognition
Answer: Revenues must be recognized in the period in which they
are realizable and earned
◉ Expense matching
Answer: Expenses must be matched (in time) to the related
revenues
◉ Full disclosure
Answer: Financial statements must contain a complete picture of the
economic (financial) events of the organization
◉ Which two principles are related?
Answer: Revenue recognition and full disclosure- financial
statements must capture a complete picture of the economic or
financial events of the organization
◉ Materiality
Answer: To keep statements manageable, only entries that are
important to the operational and financial status of the organization
need be separately identified
