ACCOUNTING 200 EXAM 1 UPDATED ACTUAL
QUESTIONS AND CORRECT ANSWERS
Question:
1. Fundamental Accounting Equation
Answer:
Assets = Liabilities + Owner's Equity
Question:
2. What are the 2 components of Stockholder's Equity?
Answer:
Retained Earnings and Common Stock
Question:
3. What is the group that currently creates Accounting
Standards (FASB)
Answer:
Financial Accounting Standards Board
Question:
4. What gives the board of directors the right to change a
company's CEO
Answer:
Stockholders' vote people into the Board and they decide who to hire in what
position to run the company
Question:
5. Three things in the Revenue Recognition Concept (3)
Answer:
1.) Implied or Explicit Agreement
2.) Known Price
3.) Substantial Effort to Complete the Transaction
Question:
6. When do you recognize revenues and expenses under
cash accounting and accrual accounting?
Answer:
Cash Accounting - When the cash exchange is made
Accrual Accounting - When economic events have occurred
, Question:
7. Where do you close dividends?
Answer:
Retained Earnings (c4)
Question:
8. What are the Closings for each Revenue, Income
Summary, Expenses, and Dividends (If there are any
dividends)
Answer:
Revenue = c1
Expenses = c2a, c2b etc.
Income Summary = c3
Dividends (If any) = c4
Question:
9. A Debit to Retained earnings means...
Answer:
A Dividend was paid to shareholders
Question:
10. Dividends is classified as what activity in the statement of
cash flows?
Answer:
Financing
Question:
11. What is double-taxation?
Answer:
Occurs in a corporation form of business and its when the SAME money is taxed
twice
Question:
12. When do you use reversing entries?
Answer:
When in the course of the adjusting process you INCREASE an asset or liability
account
Question:
13. What is the Matching Concept?
Answer:
When you regard the recording of expenses and revenues in the SAME period
QUESTIONS AND CORRECT ANSWERS
Question:
1. Fundamental Accounting Equation
Answer:
Assets = Liabilities + Owner's Equity
Question:
2. What are the 2 components of Stockholder's Equity?
Answer:
Retained Earnings and Common Stock
Question:
3. What is the group that currently creates Accounting
Standards (FASB)
Answer:
Financial Accounting Standards Board
Question:
4. What gives the board of directors the right to change a
company's CEO
Answer:
Stockholders' vote people into the Board and they decide who to hire in what
position to run the company
Question:
5. Three things in the Revenue Recognition Concept (3)
Answer:
1.) Implied or Explicit Agreement
2.) Known Price
3.) Substantial Effort to Complete the Transaction
Question:
6. When do you recognize revenues and expenses under
cash accounting and accrual accounting?
Answer:
Cash Accounting - When the cash exchange is made
Accrual Accounting - When economic events have occurred
, Question:
7. Where do you close dividends?
Answer:
Retained Earnings (c4)
Question:
8. What are the Closings for each Revenue, Income
Summary, Expenses, and Dividends (If there are any
dividends)
Answer:
Revenue = c1
Expenses = c2a, c2b etc.
Income Summary = c3
Dividends (If any) = c4
Question:
9. A Debit to Retained earnings means...
Answer:
A Dividend was paid to shareholders
Question:
10. Dividends is classified as what activity in the statement of
cash flows?
Answer:
Financing
Question:
11. What is double-taxation?
Answer:
Occurs in a corporation form of business and its when the SAME money is taxed
twice
Question:
12. When do you use reversing entries?
Answer:
When in the course of the adjusting process you INCREASE an asset or liability
account
Question:
13. What is the Matching Concept?
Answer:
When you regard the recording of expenses and revenues in the SAME period
