Intermediate Accounting 1 Final Exam Questions With 100% Correct Answers

Intermediate Accounting 1 Final Exam Questions With 100% Correct Answers financial reporting - answerprocess of providing this information to external users capital markets - answeras a composite of all investors and creditors, helps our economy allocate resources cash basis accounting - answermeasurement of cash receipts and cash payments from transactions related to providing goods and services, difference is net operating cash flow, only accounts for the cash flow/inflow when it is happens accrual basis accounting - answermeasurement of revenues and expenses, regardless of when cash is received or paid, difference is net income or net loss, ex unearned revenue GAAP (Generally Accepted Accounting Principles) - answera set of both broad and specific guidelines that companies should follow when measuring and reporting the information in their financial statements and related notes conceptual framework - answer"accounting constitution" accounting constitution - answerprovides underlying foundation for accounting standards, guide the selection of events to be accounted for, measurement of those events, means of summarizing and communicating them to interested parties faithful representation - answeris enhanced by completeness, neutrality and being free from error comparability - answerhelps users see similarities and difference between events and conditions consistency - answerrefers to the same accounting practices being used over time to permit valid comparisons between reporting periods verifiability - answerimplies that different knowledgable and independent measurers would reach consensus regarding whether information is faithful representation of what it is intended to depict timeliness - answerindicates that information is available to users early enough to allow them to use it in their decision process understandability - answermeans that users can comprehend the information cost effectiveness - answerproviding information must outweigh the cost economic entity assumption - answerpresumes that economic events can be identified specifically with an economic entity going concern assumption - answeranticipates that a business entity will continue to operate indefinitely periodicity assumption - answerallows the life of a company to be divided into artificial time period to provide timely information recognition - answerrefers to the process of admitting information into the financial statements, when recognized it is recorded in the accounts and reported on a statement measurement - answerthe process of associating numerical amounts with the elements paid in capital - answeramount invested by shareholder, credit balance retained earnings - answeramounts earned by the corporation, credit balance step 1 of the accounting cycle - answersource documents step 2 - answertransaction analysis step 3 - answerjournal entries in chronological order of events step 4 - answergeneral ledger, post from journal step 5 - answerprepare an unadjusted trial balance step 6 - answerrecord adjusting entires step 7 - answerprepare adjusted trial balance step 8 - answerprepare financial statements step 9 - answerclose temporary accounts to retained earnings step 10 - answerprepare post-closing t