Ole Miss Accy 201 Barton Test 1 || PASSED!
What is Accounting? correct answers The information system that provides reports to users
about the economic activities and condition of a business
What is GAAP (General Accepted Accounting Principle) correct answers is the collection of
accounting standards, principles, and assumptions that define how financial information will
be reported
2 characteristics of financial information correct answers Relevant: information has the
potential to impact decision making
faithful representation: information accurately reflects an entity's economic activity or
condition
4 assumptions correct answers monetary unit: financial reports be expressed in a single
monetary unit or currency
time period: allows for the reporting of economic activities on a regular basis for a specific
period of time
business entity: limits the economic data in financial reports to that directly to that directly
related to the activities of the business
going concern: that reports be filed as if the entity will operate in the future
4 principles correct answers measurement: determines the amount that will be recorded and
reported, objective and verifiable
historical cost: recording an item at its initial transaction
revenue recognition: determines when revenue is recorded in the accounting records
expense recognition: requires expenses to be recorded in the same period as the related
revenue
The Accounting Equation correct answers Assets = Liabilities + Stockholders equity
Net Income/net profit/earnings correct answers The excess amount of revenue over expenses
What are assets accounts correct answers resources owned by a business; cash, land,
buildings, equipment
What are liabilities accounts correct answers the rights of creditors are debts of the business;
What are stockholder's equity accounts correct answers common stock and retained earnings
What are revenue accounts correct answers the money a business earns from performing
services or delivering goods; fees earned, rent revenue, accounts receivable
What are expense accounts correct answers assets used in the process of earning revenue;
What is a debit correct answers increases in assets
What is a credit correct answers decreases in assets
What is Accounting? correct answers The information system that provides reports to users
about the economic activities and condition of a business
What is GAAP (General Accepted Accounting Principle) correct answers is the collection of
accounting standards, principles, and assumptions that define how financial information will
be reported
2 characteristics of financial information correct answers Relevant: information has the
potential to impact decision making
faithful representation: information accurately reflects an entity's economic activity or
condition
4 assumptions correct answers monetary unit: financial reports be expressed in a single
monetary unit or currency
time period: allows for the reporting of economic activities on a regular basis for a specific
period of time
business entity: limits the economic data in financial reports to that directly to that directly
related to the activities of the business
going concern: that reports be filed as if the entity will operate in the future
4 principles correct answers measurement: determines the amount that will be recorded and
reported, objective and verifiable
historical cost: recording an item at its initial transaction
revenue recognition: determines when revenue is recorded in the accounting records
expense recognition: requires expenses to be recorded in the same period as the related
revenue
The Accounting Equation correct answers Assets = Liabilities + Stockholders equity
Net Income/net profit/earnings correct answers The excess amount of revenue over expenses
What are assets accounts correct answers resources owned by a business; cash, land,
buildings, equipment
What are liabilities accounts correct answers the rights of creditors are debts of the business;
What are stockholder's equity accounts correct answers common stock and retained earnings
What are revenue accounts correct answers the money a business earns from performing
services or delivering goods; fees earned, rent revenue, accounts receivable
What are expense accounts correct answers assets used in the process of earning revenue;
What is a debit correct answers increases in assets
What is a credit correct answers decreases in assets
