MGT 6201 ACCOUNTING WEEK 1
WITH QUESTIONS AND 100%
CORRECT ANSWERS GRADED A+
What is the primary purpose of financial accounting? - answer-To provide meaningful
quantitative financial information regarding an entity's activities to decision makers.
Who are the primary users of financial accounting information? - answer-Shareholders,
debt holders, managers, investment analysts, customers, and strategic partners.
What are the two main qualities that make financial information useful? - answer-
Relevance and faithful representation.
What does GAAP stand for? - answer-Generally Accepted Accounting Principles.
What is the role of the SEC in financial accounting? - answer-The Securities and
Exchange Commission oversees all publicly traded companies.
What is an external audit? - answer-An audit conducted by an independent party to
provide reasonable assurance that financial statements are free of material
misstatements.
What are the required financial statements? - answer-Balance Sheet, Income
Statement, Statement of Shareholders' Equity, Statement of Cash Flows, Statement of
Comprehensive Income.
What does a balance sheet describe? - answer-The sources and uses of funds of a firm
at a point in time.
What are assets? - answer-Economic resources owned or controlled by a company that
have future economic benefits.
, What is the accounting equation? - answer-Assets = Liabilities + Owners' Equity.
What is the difference between current and long-term assets? - answer-Current assets
can be converted to cash within a year, while long-term assets cannot.
What are liabilities? - answer-Future obligations to pay cash, transfer assets, or provide
services to another party.
What is owners' equity? - answer-The ownership interest in the net assets of an entity.
How is retained earnings calculated? - answer-Beginning Retained Earnings + Net
Income - Dividends = Ending Retained Earnings.
What does the income statement show? - answer-How much a company earned over a
period of time, helping evaluate past performance and predict future performance.
What are revenues? - answer-Increases in a company's resources from the sale of
goods or services.
What are expenses? - answer-Costs incurred in the normal course of business to
generate revenues.
What is net income? - answer-An overall measure of the performance of a company,
indicating profit or loss.
What is the difference between gains/losses and revenues/expenses? - answer-
Gains/losses are money made or lost outside of normal operations, while
revenues/expenses are related to regular business activities.
WITH QUESTIONS AND 100%
CORRECT ANSWERS GRADED A+
What is the primary purpose of financial accounting? - answer-To provide meaningful
quantitative financial information regarding an entity's activities to decision makers.
Who are the primary users of financial accounting information? - answer-Shareholders,
debt holders, managers, investment analysts, customers, and strategic partners.
What are the two main qualities that make financial information useful? - answer-
Relevance and faithful representation.
What does GAAP stand for? - answer-Generally Accepted Accounting Principles.
What is the role of the SEC in financial accounting? - answer-The Securities and
Exchange Commission oversees all publicly traded companies.
What is an external audit? - answer-An audit conducted by an independent party to
provide reasonable assurance that financial statements are free of material
misstatements.
What are the required financial statements? - answer-Balance Sheet, Income
Statement, Statement of Shareholders' Equity, Statement of Cash Flows, Statement of
Comprehensive Income.
What does a balance sheet describe? - answer-The sources and uses of funds of a firm
at a point in time.
What are assets? - answer-Economic resources owned or controlled by a company that
have future economic benefits.
, What is the accounting equation? - answer-Assets = Liabilities + Owners' Equity.
What is the difference between current and long-term assets? - answer-Current assets
can be converted to cash within a year, while long-term assets cannot.
What are liabilities? - answer-Future obligations to pay cash, transfer assets, or provide
services to another party.
What is owners' equity? - answer-The ownership interest in the net assets of an entity.
How is retained earnings calculated? - answer-Beginning Retained Earnings + Net
Income - Dividends = Ending Retained Earnings.
What does the income statement show? - answer-How much a company earned over a
period of time, helping evaluate past performance and predict future performance.
What are revenues? - answer-Increases in a company's resources from the sale of
goods or services.
What are expenses? - answer-Costs incurred in the normal course of business to
generate revenues.
What is net income? - answer-An overall measure of the performance of a company,
indicating profit or loss.
What is the difference between gains/losses and revenues/expenses? - answer-
Gains/losses are money made or lost outside of normal operations, while
revenues/expenses are related to regular business activities.
