Accounting 201 Chapters 1-4 Final
Exam Questions And Actual Answers.
Accounting - Answer is the information system that: measures business activities, processes
the information into reports and communicates the results to decision makers.
Financial Accounting - Answer provides information for external decision makers such as:
investors who own a portion of the business, creditors to whom the business owes money, or
taxing authorities, to whom the business owes taxes.
Creditors - Answer to whom the business owes money.
Managerial accounting - Answer provides information to internal decision makers.
Certified Public Accountant (CPA) - Answer serve the general public.
Certified management accountants (CMA) - Answer specialize in accounting and financial
management knowledge and work for a single company.
Financial Accounting Standards Board (FASB) - Answer oversees creation and governance of
accounting standards.
Securities and Exchange Commission (SEC) - Answer oversees the U.S. financial markets.
Generally Accepted Accounting Principles (GAAP) - Answer accounting guidelines that hold the
principles for useful accounting information that must be relevant and faithfully representative.
Economic entity assumption (EEA) - Answer an organization that stands apart as a separate
economic unit follows the EEA.
Stockholder - Answer a person who owns stock.
Sole Proprietorship - Answer a business with a single owner that terminates at owner's choice
, partnership is not taxed, instead the partners pay tax on their share of earnings. The type of
business can range from professional organizations of physicians, attorneys, and accountants.
Corporation - Answer is a business organized under state law and is a separate legal entity.
There is one or more owners (called stockholders). The life of the organization is indefinite, and
the stockholders are not personally liable. It is a separate tax entity since the corporation pays
tax, and it is normally made up of a large multinational business.
Limited-Liability Company (LLC) - Answer a company in which each member is only liable for
his or her own actions. There can be one ore more members (partners) and they are not
personally liable. They are not taxed - instead the members pay tax on their share of earnings.
The type of business is an alternative to that of a partnership.
International Financial Reporting Standards (IFRS) - Answer these are principle-based
standards that are used or required by more than 120 nations. This was published by the
International Accounting Standards Board (IASB)
International Accounting Standards Board (IASB) - Answer published the International
Financial Reporting Standards (IFRS)
Audit - Answer an examination of a company's financial statements and records.
Sarbanes-Oxley Act (SOX) - Answer requires companies to review internal controls
Going concern assumption - Answer the assumption is that a company or other entity will be
able to continue operating for a period of time that is sufficient to carry out its commitments,
obligations, objectives, and so on.
Monetary unit assumption - Answer an accounting principle that assumes business
transactions or events can be measured and expressed in terms of monetary units and the
monetary units are stable and dependable. In other words, the language of business and
finance is money.
Accounting equation - Answer is the basic tool of accounting, measuring the resources of the
business and claims to those resources. (Assets = Liabilities + Equity)
Exam Questions And Actual Answers.
Accounting - Answer is the information system that: measures business activities, processes
the information into reports and communicates the results to decision makers.
Financial Accounting - Answer provides information for external decision makers such as:
investors who own a portion of the business, creditors to whom the business owes money, or
taxing authorities, to whom the business owes taxes.
Creditors - Answer to whom the business owes money.
Managerial accounting - Answer provides information to internal decision makers.
Certified Public Accountant (CPA) - Answer serve the general public.
Certified management accountants (CMA) - Answer specialize in accounting and financial
management knowledge and work for a single company.
Financial Accounting Standards Board (FASB) - Answer oversees creation and governance of
accounting standards.
Securities and Exchange Commission (SEC) - Answer oversees the U.S. financial markets.
Generally Accepted Accounting Principles (GAAP) - Answer accounting guidelines that hold the
principles for useful accounting information that must be relevant and faithfully representative.
Economic entity assumption (EEA) - Answer an organization that stands apart as a separate
economic unit follows the EEA.
Stockholder - Answer a person who owns stock.
Sole Proprietorship - Answer a business with a single owner that terminates at owner's choice
, partnership is not taxed, instead the partners pay tax on their share of earnings. The type of
business can range from professional organizations of physicians, attorneys, and accountants.
Corporation - Answer is a business organized under state law and is a separate legal entity.
There is one or more owners (called stockholders). The life of the organization is indefinite, and
the stockholders are not personally liable. It is a separate tax entity since the corporation pays
tax, and it is normally made up of a large multinational business.
Limited-Liability Company (LLC) - Answer a company in which each member is only liable for
his or her own actions. There can be one ore more members (partners) and they are not
personally liable. They are not taxed - instead the members pay tax on their share of earnings.
The type of business is an alternative to that of a partnership.
International Financial Reporting Standards (IFRS) - Answer these are principle-based
standards that are used or required by more than 120 nations. This was published by the
International Accounting Standards Board (IASB)
International Accounting Standards Board (IASB) - Answer published the International
Financial Reporting Standards (IFRS)
Audit - Answer an examination of a company's financial statements and records.
Sarbanes-Oxley Act (SOX) - Answer requires companies to review internal controls
Going concern assumption - Answer the assumption is that a company or other entity will be
able to continue operating for a period of time that is sufficient to carry out its commitments,
obligations, objectives, and so on.
Monetary unit assumption - Answer an accounting principle that assumes business
transactions or events can be measured and expressed in terms of monetary units and the
monetary units are stable and dependable. In other words, the language of business and
finance is money.
Accounting equation - Answer is the basic tool of accounting, measuring the resources of the
business and claims to those resources. (Assets = Liabilities + Equity)
