Intermediate Accounting - Test 1 -
Multiple Choice Questions and Answers
100% Solved
Understandability - ✔✔connection between users and their decisions
Basic Elements - ✔✔Assets, Liabilities, Equity, Investment by owners, Distribution by owners,
Comprehensive income, Revenue, Expenses, Gains, Losses
Comprehensive Income - ✔✔includes net income and all other changes in equity exclusive of
owner's investments and distributions
Going Concern - ✔✔business will exist forever, at least long enough to use accruals and
deferrals
, Monetary unit - ✔✔measured and reported in dollars, most effective means of expressing
changes in capital and exchanges of goods and services, assumed relatively stable Periodicity -
✔✔activities divided into artificial time periods
Historical Cost - ✔✔assets and liabilities at acquisition price, definite, no interpretation--creates
reliability
Fair Value - ✔✔the transfer price-more useful in some situations - more relevant
Revenue recognition - ✔✔earning process is complete and exchange transaction has occurred
(realized or realizable and earned)
Expense recognition - ✔✔match expenses with revenues
Full disclosure - ✔✔permits a knowledgeable reader to reach informed decisions
Real Account - ✔✔balance sheet accounts (assets, liabilities, and equity) permanant
Nominal Accounts - ✔✔income and expense accounts, closed at ed of period, temporary
Double-entry accounting - ✔✔for every debit, there must be a credit, and vice-versa
Corporation - ✔✔Stock Holders Equity, capital stock, APIC, Retained earnings, dividends
Proprietorship or partnership - ✔✔capital account, drawing
Multiple Choice Questions and Answers
100% Solved
Understandability - ✔✔connection between users and their decisions
Basic Elements - ✔✔Assets, Liabilities, Equity, Investment by owners, Distribution by owners,
Comprehensive income, Revenue, Expenses, Gains, Losses
Comprehensive Income - ✔✔includes net income and all other changes in equity exclusive of
owner's investments and distributions
Going Concern - ✔✔business will exist forever, at least long enough to use accruals and
deferrals
, Monetary unit - ✔✔measured and reported in dollars, most effective means of expressing
changes in capital and exchanges of goods and services, assumed relatively stable Periodicity -
✔✔activities divided into artificial time periods
Historical Cost - ✔✔assets and liabilities at acquisition price, definite, no interpretation--creates
reliability
Fair Value - ✔✔the transfer price-more useful in some situations - more relevant
Revenue recognition - ✔✔earning process is complete and exchange transaction has occurred
(realized or realizable and earned)
Expense recognition - ✔✔match expenses with revenues
Full disclosure - ✔✔permits a knowledgeable reader to reach informed decisions
Real Account - ✔✔balance sheet accounts (assets, liabilities, and equity) permanant
Nominal Accounts - ✔✔income and expense accounts, closed at ed of period, temporary
Double-entry accounting - ✔✔for every debit, there must be a credit, and vice-versa
Corporation - ✔✔Stock Holders Equity, capital stock, APIC, Retained earnings, dividends
Proprietorship or partnership - ✔✔capital account, drawing
