Accounting MBA 620 || Already Graded A+.
does accounting mattter? correct answers yes! reports provide information to the market when
accounting released the sentiment in those reports are then correlated with changes in the stock
price
basic accounting theory correct answers a basic set of concepts and related principles that explain
and guide the accountants actions in - identifying, measuring and communicating economic
income
should accounting income = economic income correct answers no- economic income takes into
account human capital and accounting income takes into account the past
business entity correct answers be reported separately
going concern correct answers expect the business will continue operation into the foreseeable
future
monetary value correct answers measure value and provide someway thats consistent for valuing
what company does
periodicity correct answers operations can be separated in periods to help assess performance of
a company
substance over form correct answers report the substance rather than a legal or technical form
consistency correct answers apply the same accounting methods each year
historical cost correct answers report activities at their cash value at the time of the transaction
fair market value correct answers report the value of a transaction or asset / liability at the value
that one would receive in the market
recognition correct answers recording transaction based on accounting rules - accrual basis
realization correct answers actual paying of cash
revenue recognition correct answers report revenue when earned and right to pay
expense recognition correct answers report expense obligations when obligated to pay
conservatism correct answers when faced with decision of equally likely outcomes, choose one
to minimize profit
full and fair disclosure correct answers disclose anything that would affect an informed investor
in making decision
, 3 forms of business org correct answers 1. sole propietorship
2. partnership a. passive b. active
3. corporation a. private b. public - for or non profit
5 types of accounts correct answers 1. Assets- resources
2. Liabilities- obligations
3. Equity- contributed capital, retained earnings
4. Revenue- earned
5. Expenses- reported cost for earnings
accounting equations correct answers income statement- revenue- expense= profit or loss
balance set- asset = liability + equity
basic accountant equation correct answers beginning balance + inflow - outflow= ending balance
asset correct answers what we own
liabilities + equity
liabilities correct answers what we owe
equity correct answers contributed capital (what the owners put into the business)
retained earnings (accomulated operations, profit/ less, less whats been distributed
assets correct answers must be owned by the company and must confer expected future
economic benefits that result from past transaction or event
record as expense correct answers when a cost creates an immediate benefit
record as asset correct answers when a cost creates future economic benefit
current assets correct answers Cash, short-term investments, accounts receivable, inventory, and
prepaid expenses.
long term assets correct answers PPE, Long-term investments, intangible and other assets
current liabilities correct answers accounts payable, accrued liabilities, unearned revenues, short-
term notes payable, current maturities of long term debt
noncurrent liabilities correct answers long term debt
other long term liabilities
contributed capital correct answers common stock, additional paid in capital, preferred stock,
treasury stock, retained earnings, accumulated other comprehensive income or loss
does accounting mattter? correct answers yes! reports provide information to the market when
accounting released the sentiment in those reports are then correlated with changes in the stock
price
basic accounting theory correct answers a basic set of concepts and related principles that explain
and guide the accountants actions in - identifying, measuring and communicating economic
income
should accounting income = economic income correct answers no- economic income takes into
account human capital and accounting income takes into account the past
business entity correct answers be reported separately
going concern correct answers expect the business will continue operation into the foreseeable
future
monetary value correct answers measure value and provide someway thats consistent for valuing
what company does
periodicity correct answers operations can be separated in periods to help assess performance of
a company
substance over form correct answers report the substance rather than a legal or technical form
consistency correct answers apply the same accounting methods each year
historical cost correct answers report activities at their cash value at the time of the transaction
fair market value correct answers report the value of a transaction or asset / liability at the value
that one would receive in the market
recognition correct answers recording transaction based on accounting rules - accrual basis
realization correct answers actual paying of cash
revenue recognition correct answers report revenue when earned and right to pay
expense recognition correct answers report expense obligations when obligated to pay
conservatism correct answers when faced with decision of equally likely outcomes, choose one
to minimize profit
full and fair disclosure correct answers disclose anything that would affect an informed investor
in making decision
, 3 forms of business org correct answers 1. sole propietorship
2. partnership a. passive b. active
3. corporation a. private b. public - for or non profit
5 types of accounts correct answers 1. Assets- resources
2. Liabilities- obligations
3. Equity- contributed capital, retained earnings
4. Revenue- earned
5. Expenses- reported cost for earnings
accounting equations correct answers income statement- revenue- expense= profit or loss
balance set- asset = liability + equity
basic accountant equation correct answers beginning balance + inflow - outflow= ending balance
asset correct answers what we own
liabilities + equity
liabilities correct answers what we owe
equity correct answers contributed capital (what the owners put into the business)
retained earnings (accomulated operations, profit/ less, less whats been distributed
assets correct answers must be owned by the company and must confer expected future
economic benefits that result from past transaction or event
record as expense correct answers when a cost creates an immediate benefit
record as asset correct answers when a cost creates future economic benefit
current assets correct answers Cash, short-term investments, accounts receivable, inventory, and
prepaid expenses.
long term assets correct answers PPE, Long-term investments, intangible and other assets
current liabilities correct answers accounts payable, accrued liabilities, unearned revenues, short-
term notes payable, current maturities of long term debt
noncurrent liabilities correct answers long term debt
other long term liabilities
contributed capital correct answers common stock, additional paid in capital, preferred stock,
treasury stock, retained earnings, accumulated other comprehensive income or loss
