Accounting Exam Chapter 1 – 3 Study
Questions With All Correct Answers.
Name the two institutions that set Generally Accepted Accounting Principles. - Answer Financial
Accounting Standards Board (FASB) and Securities Exchange Commission (SEC)
What is the name of U.S. accounting rules? - Answer Generally Accepted Accounting Principles (GAAP)
Name the four financial statements in the order of preparation. - Answer 1) Income Statement
2) Statement of Retained Earnings
3) Balance Sheet
4) Cash flows statement
What type of information is reported in statement of retained earnings? - Answer Statement of
Retained Earnings:
Beginning Retained Earnings + Net income - Dividends = Ending Retained Earnings
What type of information is reported in income statement? - Answer Income statement: Revenues -
Expenses = Net income (Loss)
What type of information is reported in a balance sheet? - Answer Assets = liabilities + common stock +
Retained Earnings
What type of information is reported in cash flow statement? - Answer Cash flows statement: Sources
of cash and uses of Cash (or cash inflows and outflows)
What is the basic accounting equation? - Answer Assets = Liabilities + Stockholder's Equity
What is the expanded accounting equation? - Answer Assets = Liabilities + Common Stock + Retained
Earnings + Revenues - Dividends - Expenses
Questions With All Correct Answers.
Name the two institutions that set Generally Accepted Accounting Principles. - Answer Financial
Accounting Standards Board (FASB) and Securities Exchange Commission (SEC)
What is the name of U.S. accounting rules? - Answer Generally Accepted Accounting Principles (GAAP)
Name the four financial statements in the order of preparation. - Answer 1) Income Statement
2) Statement of Retained Earnings
3) Balance Sheet
4) Cash flows statement
What type of information is reported in statement of retained earnings? - Answer Statement of
Retained Earnings:
Beginning Retained Earnings + Net income - Dividends = Ending Retained Earnings
What type of information is reported in income statement? - Answer Income statement: Revenues -
Expenses = Net income (Loss)
What type of information is reported in a balance sheet? - Answer Assets = liabilities + common stock +
Retained Earnings
What type of information is reported in cash flow statement? - Answer Cash flows statement: Sources
of cash and uses of Cash (or cash inflows and outflows)
What is the basic accounting equation? - Answer Assets = Liabilities + Stockholder's Equity
What is the expanded accounting equation? - Answer Assets = Liabilities + Common Stock + Retained
Earnings + Revenues - Dividends - Expenses
