Financial Accounting Questions Accurately
Solved
Accounting - CORRECT ANSWER✅✅✅System that collects and processes (analyzes,
measures, and records) financial information about an organization and reports that information
to decision makers.
Accounting entity - CORRECT ANSWER✅✅✅Is the organization for with financial data
are to be collected.
The four basic statements: - CORRECT ANSWER✅✅✅1. Balance Sheet
2. Income Statement
3. Statement of Retained Earnings
4. Statement of Cash flows
Balance Sheet - CORRECT ANSWER✅✅✅Reports the amount of assets, liabilities and
stockholders' equity of an accounting entry at a point in time.
Income Statement - CORRECT ANSWER✅✅✅Reports the revenues less the expenses of
the accounting period.
Statement of Retained Earnings - CORRECT ANSWER✅✅✅Reports the way that net
income and the distribution of dividends affected the financial position of the company during
the accounting period.
Statement of Cash Flows - CORRECT ANSWER✅✅✅Reports inflows and outflows of cash
during the accounting period in the categories of operating, investing, and financing.
Basic Accounting Equation - CORRECT ANSWER✅✅✅Assets = Liabilities +
Stockholders' Equity
,Assets - CORRECT ANSWER✅✅✅Are the economic resources owned by the company.
Each of these economic resources is expected to provide future benefits to the firm.
Liabilities - CORRECT ANSWER✅✅✅Are the company's debts or obligations. Which will
be paid with assets or services.
Stockholders' Equity (Owners' Equity) - CORRECT ANSWER✅✅✅Indicates the amount of
financing provided by owners of the business and earnings. Is the sum of the contribute capital +
the retained earnings.
Accounting Period - CORRECT ANSWER✅✅✅Is the time period cover by the financial
statements.
Elements of the Income Statement - CORRECT ANSWER✅✅✅Revenues, Expenses and
Net Income.
Revenues - CORRECT ANSWER✅✅✅Earnings from the sale of goods or services to
costumers. Revenues are reported whether or not have yet been paid for.
Expenses - CORRECT ANSWER✅✅✅Represent the dollar amount of resources the entity
used to earn revenue during the period.
Net Income ("the bottom line") - CORRECT ANSWER✅✅✅Is the excess of total revenues
over total expenses.
Net Loss - CORRECT ANSWER✅✅✅If total expenses exceed total revenues.
Retained Earning Equation - CORRECT ANSWER✅✅✅Ending Retained Earnings =
(Beginning of Retained Earnings + Net Income) - Dividends
, The Cash Flow Statement Equation - CORRECT ANSWER✅✅✅+/- Cash flow from
Operating Activities (CFO)
+/- Cash flow from Investing Activities (CFI)
+/- Cash flow from Financing Activities (CFF)
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Change in Cash
Cash Flow from Operating Activities, and examples - CORRECT ANSWER✅✅✅CFO- Are
cash flow that are directly related to earning income. Example, collecting cash from costumers,
pay salaries, pay bills, pay to suppliers.
Cash Flow from Investing Activities, and examples - CORRECT ANSWER✅✅✅CFI- Are
cash flow related to the acquisition or sale of the company's productive assets. Example, the
purchase of additional equipment.
Cash Flow from Financing Activities, and examples - CORRECT ANSWER✅✅✅CFF- Are
cash flow directly related to the financing of the enterprise itself. Example, the payment of
money to investors and creditors.
Notes - CORRECT ANSWER✅✅✅"Footnotes" provide supplemental information about the
financial condition of a company.
GAAP - CORRECT ANSWER✅✅✅Generally Accepted Accounting Principles, are the
measurement rules used to develop the information in financial statements.
SEC - CORRECT ANSWER✅✅✅Security and Exchange Commission, is the U.S
government agency that determines the financial statements that public companies must provide
to stockholders, and the rules that they must use in producing those statements.
FASB - CORRECT ANSWER✅✅✅Financial Accounting Standards Board, is the private
sector body given the primary responsibility to work out the detailed rules that become GAAP.
Solved
Accounting - CORRECT ANSWER✅✅✅System that collects and processes (analyzes,
measures, and records) financial information about an organization and reports that information
to decision makers.
Accounting entity - CORRECT ANSWER✅✅✅Is the organization for with financial data
are to be collected.
The four basic statements: - CORRECT ANSWER✅✅✅1. Balance Sheet
2. Income Statement
3. Statement of Retained Earnings
4. Statement of Cash flows
Balance Sheet - CORRECT ANSWER✅✅✅Reports the amount of assets, liabilities and
stockholders' equity of an accounting entry at a point in time.
Income Statement - CORRECT ANSWER✅✅✅Reports the revenues less the expenses of
the accounting period.
Statement of Retained Earnings - CORRECT ANSWER✅✅✅Reports the way that net
income and the distribution of dividends affected the financial position of the company during
the accounting period.
Statement of Cash Flows - CORRECT ANSWER✅✅✅Reports inflows and outflows of cash
during the accounting period in the categories of operating, investing, and financing.
Basic Accounting Equation - CORRECT ANSWER✅✅✅Assets = Liabilities +
Stockholders' Equity
,Assets - CORRECT ANSWER✅✅✅Are the economic resources owned by the company.
Each of these economic resources is expected to provide future benefits to the firm.
Liabilities - CORRECT ANSWER✅✅✅Are the company's debts or obligations. Which will
be paid with assets or services.
Stockholders' Equity (Owners' Equity) - CORRECT ANSWER✅✅✅Indicates the amount of
financing provided by owners of the business and earnings. Is the sum of the contribute capital +
the retained earnings.
Accounting Period - CORRECT ANSWER✅✅✅Is the time period cover by the financial
statements.
Elements of the Income Statement - CORRECT ANSWER✅✅✅Revenues, Expenses and
Net Income.
Revenues - CORRECT ANSWER✅✅✅Earnings from the sale of goods or services to
costumers. Revenues are reported whether or not have yet been paid for.
Expenses - CORRECT ANSWER✅✅✅Represent the dollar amount of resources the entity
used to earn revenue during the period.
Net Income ("the bottom line") - CORRECT ANSWER✅✅✅Is the excess of total revenues
over total expenses.
Net Loss - CORRECT ANSWER✅✅✅If total expenses exceed total revenues.
Retained Earning Equation - CORRECT ANSWER✅✅✅Ending Retained Earnings =
(Beginning of Retained Earnings + Net Income) - Dividends
, The Cash Flow Statement Equation - CORRECT ANSWER✅✅✅+/- Cash flow from
Operating Activities (CFO)
+/- Cash flow from Investing Activities (CFI)
+/- Cash flow from Financing Activities (CFF)
----------------------------------------
Change in Cash
Cash Flow from Operating Activities, and examples - CORRECT ANSWER✅✅✅CFO- Are
cash flow that are directly related to earning income. Example, collecting cash from costumers,
pay salaries, pay bills, pay to suppliers.
Cash Flow from Investing Activities, and examples - CORRECT ANSWER✅✅✅CFI- Are
cash flow related to the acquisition or sale of the company's productive assets. Example, the
purchase of additional equipment.
Cash Flow from Financing Activities, and examples - CORRECT ANSWER✅✅✅CFF- Are
cash flow directly related to the financing of the enterprise itself. Example, the payment of
money to investors and creditors.
Notes - CORRECT ANSWER✅✅✅"Footnotes" provide supplemental information about the
financial condition of a company.
GAAP - CORRECT ANSWER✅✅✅Generally Accepted Accounting Principles, are the
measurement rules used to develop the information in financial statements.
SEC - CORRECT ANSWER✅✅✅Security and Exchange Commission, is the U.S
government agency that determines the financial statements that public companies must provide
to stockholders, and the rules that they must use in producing those statements.
FASB - CORRECT ANSWER✅✅✅Financial Accounting Standards Board, is the private
sector body given the primary responsibility to work out the detailed rules that become GAAP.
