ACCOUNTING EXAM 1 MIZZOU (PRESTIGIACOMO)
UPDATED ACTUAL QUESTIONS AND CORRECT
ANSWERS
Question:
1. Accounting System
Answer:
Question:
2. What is the main goal of an accounting system?
Answer:
To capture information about the operating, investing, and financing activities of a
company so that it can be reported to decision makers, both inside and outside
the business
Question:
3. Managerial accounting reports
Answer:
include detailed financial plans and continually updated reports about the
operating performance of the company
-only available to employees of company (internal users)
Question:
4. what a company owns must equal what a company owes to its creditors and
stockholders
Answer:
Basic Accounting Equation
,Question:
5. asset
Answer:
an economic resource presently controlled by the company; it has measurable
value and is expected to benefit the company by producing cash inflows or
reducing cash out flows in the future.
(cash, supplies, equipment, software, inventory)
Question:
6. Liabilities
Answer:
measurable accounts that the company owes to its creditors.
(Notes payable, accounts payable, salaries and wages payable, taxes payable)
Question:
7. Creditors
Answer:
From a legal perspective, _________ have a legal priority over stockholders. Thus if a
company goes out of business, liabilities must be paid before any amounts are
paid to stockholders.
Question:
8. Stockholders Equity
Answer:
represents the owners claim on the business. The claims arise for two reasons
1. the owners have a claim on amounts they contributed directly to the company in
exchange for common stock
2. the owners have a claim on amounts the company has earned through
profitable business operations (retained earnings)
Question:
9. revenues
Answer:
earned by selling goods or services to customers
, Question:
10. Expenses
Answer:
all costs of doing business that are necessary to earn revenues.
Question:
11. By generating _______ ________ , a company increases it's
stockholders equity
Answer:
net income
Question:
12. A company's profits are accumulated in retained earnings
until a decision is made to distribute them to stockholders
is what is called a ___________.
Answer:
dividends
Question:
13. ________ are NOT an expense incurred to generate earnings,
rather __________ are an optional distribution of earnings to
stockholders, approved by the companys board of
directors.
-Reported in retained earnings
Answer:
dividends
Question:
14. 4 main accounting reports
Answer:
1. Income Statement
2. Statement of retained earnings
3. Balance Sheet
4. Statement of cash flows
Question:
15. Calendar year
Answer:
a 12 month period ending on december 31st
UPDATED ACTUAL QUESTIONS AND CORRECT
ANSWERS
Question:
1. Accounting System
Answer:
Question:
2. What is the main goal of an accounting system?
Answer:
To capture information about the operating, investing, and financing activities of a
company so that it can be reported to decision makers, both inside and outside
the business
Question:
3. Managerial accounting reports
Answer:
include detailed financial plans and continually updated reports about the
operating performance of the company
-only available to employees of company (internal users)
Question:
4. what a company owns must equal what a company owes to its creditors and
stockholders
Answer:
Basic Accounting Equation
,Question:
5. asset
Answer:
an economic resource presently controlled by the company; it has measurable
value and is expected to benefit the company by producing cash inflows or
reducing cash out flows in the future.
(cash, supplies, equipment, software, inventory)
Question:
6. Liabilities
Answer:
measurable accounts that the company owes to its creditors.
(Notes payable, accounts payable, salaries and wages payable, taxes payable)
Question:
7. Creditors
Answer:
From a legal perspective, _________ have a legal priority over stockholders. Thus if a
company goes out of business, liabilities must be paid before any amounts are
paid to stockholders.
Question:
8. Stockholders Equity
Answer:
represents the owners claim on the business. The claims arise for two reasons
1. the owners have a claim on amounts they contributed directly to the company in
exchange for common stock
2. the owners have a claim on amounts the company has earned through
profitable business operations (retained earnings)
Question:
9. revenues
Answer:
earned by selling goods or services to customers
, Question:
10. Expenses
Answer:
all costs of doing business that are necessary to earn revenues.
Question:
11. By generating _______ ________ , a company increases it's
stockholders equity
Answer:
net income
Question:
12. A company's profits are accumulated in retained earnings
until a decision is made to distribute them to stockholders
is what is called a ___________.
Answer:
dividends
Question:
13. ________ are NOT an expense incurred to generate earnings,
rather __________ are an optional distribution of earnings to
stockholders, approved by the companys board of
directors.
-Reported in retained earnings
Answer:
dividends
Question:
14. 4 main accounting reports
Answer:
1. Income Statement
2. Statement of retained earnings
3. Balance Sheet
4. Statement of cash flows
Question:
15. Calendar year
Answer:
a 12 month period ending on december 31st
