MGRADES
MBA Accounting Exam 1 UPDATED
ACTUAL Exam Questions and CORRECT
Answers
Accounting - CORRECT ANSWER - ID, records, communicates economic events of an
org to interested internal/external users
GAAP - CORRECT ANSWER - Standards accepted/universally practiced that indicate
how to report economic events
historical cost principle - CORRECT ANSWER - companies record assets at their cost
fair value principle - CORRECT ANSWER - assets/liabilities should be reported at fair
value (the price received to sell an asset/settle a liability)
monetary unit assumption - CORRECT ANSWER - companies include only transaction
data that can be expressed in terms of money in their acct records
economic entity assumption - CORRECT ANSWER - activities of company kept
separate/distinct from activities of owner/others
proprietorship - CORRECT ANSWER - one owner; small service; owner is personally
liable
partnership - CORRECT ANSWER - 2+ owners; retail/service; unlimited personal
liability; partnership agreement
corporation - CORRECT ANSWER - ownership in stock shares; separate legal entity;
limited liability
, MGRADES
A=L+SE - CORRECT ANSWER - accounting equation
SE=CS+RE - CORRECT ANSWER - stockholder's equity equation
RE=R-E-D - CORRECT ANSWER - retained earnings equation
assets - CORRECT ANSWER - resources a business owns; provide future
services/benefits
liabilities - CORRECT ANSWER - claims against assets
creditors - CORRECT ANSWER - party to whom money is owed
stockholder's equity - CORRECT ANSWER - ownership claim on total assets; AKA
residual equity
revenues - CORRECT ANSWER - business activities entered into for the purpose of
earning income
dividends - CORRECT ANSWER - distribution of cash/other assets to stockholders
expenses - CORRECT ANSWER - cost of assets/services in the process of earning
revenue
transactions - CORRECT ANSWER - business's economic events recorded by
accountants; internal/external; has dual effect on acct equation
income statement, retained earnings statement, balance sheet, statement of cash flows -
CORRECT ANSWER - 4 financial statements
MBA Accounting Exam 1 UPDATED
ACTUAL Exam Questions and CORRECT
Answers
Accounting - CORRECT ANSWER - ID, records, communicates economic events of an
org to interested internal/external users
GAAP - CORRECT ANSWER - Standards accepted/universally practiced that indicate
how to report economic events
historical cost principle - CORRECT ANSWER - companies record assets at their cost
fair value principle - CORRECT ANSWER - assets/liabilities should be reported at fair
value (the price received to sell an asset/settle a liability)
monetary unit assumption - CORRECT ANSWER - companies include only transaction
data that can be expressed in terms of money in their acct records
economic entity assumption - CORRECT ANSWER - activities of company kept
separate/distinct from activities of owner/others
proprietorship - CORRECT ANSWER - one owner; small service; owner is personally
liable
partnership - CORRECT ANSWER - 2+ owners; retail/service; unlimited personal
liability; partnership agreement
corporation - CORRECT ANSWER - ownership in stock shares; separate legal entity;
limited liability
, MGRADES
A=L+SE - CORRECT ANSWER - accounting equation
SE=CS+RE - CORRECT ANSWER - stockholder's equity equation
RE=R-E-D - CORRECT ANSWER - retained earnings equation
assets - CORRECT ANSWER - resources a business owns; provide future
services/benefits
liabilities - CORRECT ANSWER - claims against assets
creditors - CORRECT ANSWER - party to whom money is owed
stockholder's equity - CORRECT ANSWER - ownership claim on total assets; AKA
residual equity
revenues - CORRECT ANSWER - business activities entered into for the purpose of
earning income
dividends - CORRECT ANSWER - distribution of cash/other assets to stockholders
expenses - CORRECT ANSWER - cost of assets/services in the process of earning
revenue
transactions - CORRECT ANSWER - business's economic events recorded by
accountants; internal/external; has dual effect on acct equation
income statement, retained earnings statement, balance sheet, statement of cash flows -
CORRECT ANSWER - 4 financial statements
