BMAL 590 Business Finance_3 Exam Questions and Answers 100% Pass

BMAL 590 Business Finance_3 Exam Questions and Answers 100% Pass General Accepted Accounting Principles (GAAP) - the rules created by the U.S. government for accounting. This requires public companies to generate financial statements. Financial Accounting Standards Board (FASB) - a body that examines controversial accounting topics and issues standards that, in terms of their impact on accounting practices, almost have the force of law. Securities and Exchange Commission (SEC) - regulates publicly traded U.S. companies as well as the nation's stock and bonds markets. It mandates that companies generate financial statements following international accounting standards (IAS). Public Company Accounting Oversight Board (PCAOB) - Effectively gives the EC authority to oversee the accounting professions activities. 4 Key Financial Statements required by the SEC are - 1. balance sheet 2. income statement 3. statement of retained earnings 4. statement of cash flows International Financial Reporting Standards (IFRS) - used in many countries as the regulatory basis for the preparation of financial statements. Designed to provide common global language for financial reporting, so that published information is comparable across international boundaries. 2 | P a g e Author. Katelyn Whitman, ©2025 All Rights Reserved. Balance Sheet - Presents a 'snapshot' view of the company's financial position at a specific moment in time. A firm's assets must equal the combined value of its liabilities and the stockholders' equity. Assets = Liabilities + Stockholders' Equity. Balance sheet entries: 1. Assets- The most liquid asset (cash) appears first and the least liquid (fixed assets) come last. 2. Current Liabilities are those that must be paid within one year and include accounts payable, notes payable, and accrued expenses. Long term liabilities - are due after more than a year and include deferred taxes and long term debt. 3. Stockholders Equity - is the owners' residual share of the business, including their original investment plus any money the firm has earned and retained since its inception. Includes preferred stock, common stock, paid-in-capital in excess of par, and retained earnings. Liabilities - are debts that the firm owes to others. Current Liabilities - are those that must be paid within one year and include accounts payable, notes payable, and accrued expenses. Includes Accounts Payable are the amounts owed for credit purchases by the firm. Notes Payable are outstanding short-term loans, typically from commercial banks. 3 | P a g e Author. Katelyn Whitman, ©2025 All Rights Reserved. Accrued Expenses are costs that have been incurred by the firm that have not yet been paid. Long term liabilities - are due after more than a year and include deferred taxes and long term debt. Include deferred taxes and long-term debt. Assets - Everything that can be used to benefit the business or give the company the right to receive benefits. Liquidity - is the length of time it takes to convert accounts into cash during the normal course of business. Balance Sheet Assets - Cash and cash equivalents are assets such as checking account balances at commercial banks that can be used directly as means of payment. Marketable securities represent liquid short-term investments, which financial analysts view as a form of "near cash." They include Treasury notes, commercial pape