BMGT 220 Exam 1 UPDATED ACTUAL
Exam Questions and CORRECT Answers
Chapter 1: Introduction - CORRECT ANSWER -
Accounting - CORRECT ANSWER - Provide Reports to users about the activity and
condition of the business
-Managerial=Internal
-Financial=External
Financial Accounting Standards Board - CORRECT ANSWER - Develop accounting
standards
Securities Exchange Commission - CORRECT ANSWER - Overlook companies whose
stock is sold and traded by the public
Monetary Unit Assumption - CORRECT ANSWER - Requires financial reports to be
expressed in a single money unit or currency
Time Period Assumption - CORRECT ANSWER - Guideline that allows companies to
divide ongoing activities of a business into periods
- Monthly, quarterly, annual, etc
Business Entity Assumption - CORRECT ANSWER - Limits economic data in financial
reports to that directly related to the activities of the business
Going Concern Assumption - CORRECT ANSWER - Requires that financial reports be
prepared assuming the entity will continue to operate in the future
, Measurement Principle - CORRECT ANSWER - Requires that amounts reported be
objective and verifiable
Cost Principle - CORRECT ANSWER - Requires that assets be recorded at the cash
amount (or its equivalent) at the time that an asset is acquired.
Revenue Recognition Principle - CORRECT ANSWER - Revenue is only recorded once
goods have been delivered or services have been preformed
Expense Recognition Principle - CORRECT ANSWER - Expenses must be recorded in
the same period as related revenue
Proprietorship - CORRECT ANSWER - Owned by one person
-Easy
-Inexpensive
-Small business
Partnership - CORRECT ANSWER - Owned by two or more people
-Combines skills and resources of more that one person
Corporation - CORRECT ANSWER - Organized under state or federal statutes as a
separate legal entity
-Ownership divided into shares called stock
LLC - CORRECT ANSWER - Hybrid of a partnership and corporation
-Has tax and legal liability advantages for owner
Ratio Of Liabilities to Stockholder Equity - CORRECT ANSWER - Total Liabilities
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Exam Questions and CORRECT Answers
Chapter 1: Introduction - CORRECT ANSWER -
Accounting - CORRECT ANSWER - Provide Reports to users about the activity and
condition of the business
-Managerial=Internal
-Financial=External
Financial Accounting Standards Board - CORRECT ANSWER - Develop accounting
standards
Securities Exchange Commission - CORRECT ANSWER - Overlook companies whose
stock is sold and traded by the public
Monetary Unit Assumption - CORRECT ANSWER - Requires financial reports to be
expressed in a single money unit or currency
Time Period Assumption - CORRECT ANSWER - Guideline that allows companies to
divide ongoing activities of a business into periods
- Monthly, quarterly, annual, etc
Business Entity Assumption - CORRECT ANSWER - Limits economic data in financial
reports to that directly related to the activities of the business
Going Concern Assumption - CORRECT ANSWER - Requires that financial reports be
prepared assuming the entity will continue to operate in the future
, Measurement Principle - CORRECT ANSWER - Requires that amounts reported be
objective and verifiable
Cost Principle - CORRECT ANSWER - Requires that assets be recorded at the cash
amount (or its equivalent) at the time that an asset is acquired.
Revenue Recognition Principle - CORRECT ANSWER - Revenue is only recorded once
goods have been delivered or services have been preformed
Expense Recognition Principle - CORRECT ANSWER - Expenses must be recorded in
the same period as related revenue
Proprietorship - CORRECT ANSWER - Owned by one person
-Easy
-Inexpensive
-Small business
Partnership - CORRECT ANSWER - Owned by two or more people
-Combines skills and resources of more that one person
Corporation - CORRECT ANSWER - Organized under state or federal statutes as a
separate legal entity
-Ownership divided into shares called stock
LLC - CORRECT ANSWER - Hybrid of a partnership and corporation
-Has tax and legal liability advantages for owner
Ratio Of Liabilities to Stockholder Equity - CORRECT ANSWER - Total Liabilities
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