ETS Exam Correct Questions And
Answers
Financial StatementsCorrect Answers are the business documents that companies use
to report
the results of activities to various external user groups.
AccountingCorrect Answers is an information system. It measures business activities,
processes date into reports (including financial statements) and communicates results
to
decision makers. Accounting is the "language of business"
Users of Accounting InformationCorrect Answers Individual
Investors and Creditors
Regulatory Bodies
Nonprofit Organizations
Financial AccountingCorrect Answers Provides information for decision makers outside
the entity.
Investors
Creditors
Government agencies
And the public
Managerial AccountingCorrect Answers Provides information for internal users,
management
proprietorshipCorrect Answers is a single owner.
PartnershipCorrect Answers Two or more parties are co-owners and each owner is a
partner.
Limited Liability Company (LLC)Correct Answers One in which the business (not the
owner) is liable for the company's debt.
CorporationCorrect Answers Is a business owner by stockholder or shareholders who
own stock (common or
preferred) representing shares of ownership in that corporation.
GAAPCorrect Answers Generally Accepted Accounting Principles
FASBCorrect Answers Financial Accounting Standards Board
, IASBCorrect Answers International accounting Standards Board
The Accounting EquationCorrect Answers Assets = Liabilities + Owners Equity
AssetsCorrect Answers Economic resources that are expected to produce a benefit in
the future
Current assetsCorrect Answers expected to be converted to cash, sold or consumed
during
the next 12 months or business operations cycle. Whichever is longer.
LiabilitiesCorrect Answers Outside claims. Debts payable to creditors
Owners' Equity or Shareholders EquityCorrect Answers Insider claims.
The Income Statement or Statement of OperationsCorrect Answers Revenues minus
expenses to equal Net Income.
The Statement of Retained EarningsCorrect Answers Shows What a company did with
it's Net Income.
Retained Earnings is the portion of net income that has been kept by t he
company
The Balance Sheet or Statement of Financial Position reportingCorrect Answers Assets,
Liabilities
And Stockholders Equity
Or the accounting equation
The Statement of Cash FlowsCorrect Answers reports three types of activities:
Operating, investing, and financing.
Operating:Correct Answers Cash flows from selling goods and providing services to
customers
Investing:Correct Answers Cash flows from the purchase and sale of long-term assets
Financing:Correct Answers Borrowing and repayment of borrowed funds
Equity transactions, such as issuing stock, paying dividends, and repurchase of
company stock
Current LiabilitiesCorrect Answers are the company's debts that are due within one year
or the company's operating cycle, whichever is longer.
Examples of Current Liabilities are:Correct Answers Accounts Payable (owed for
inventories and services purchased on credit)
Sales Tax Payable (sales tax collected from customers and due to state and local
Answers
Financial StatementsCorrect Answers are the business documents that companies use
to report
the results of activities to various external user groups.
AccountingCorrect Answers is an information system. It measures business activities,
processes date into reports (including financial statements) and communicates results
to
decision makers. Accounting is the "language of business"
Users of Accounting InformationCorrect Answers Individual
Investors and Creditors
Regulatory Bodies
Nonprofit Organizations
Financial AccountingCorrect Answers Provides information for decision makers outside
the entity.
Investors
Creditors
Government agencies
And the public
Managerial AccountingCorrect Answers Provides information for internal users,
management
proprietorshipCorrect Answers is a single owner.
PartnershipCorrect Answers Two or more parties are co-owners and each owner is a
partner.
Limited Liability Company (LLC)Correct Answers One in which the business (not the
owner) is liable for the company's debt.
CorporationCorrect Answers Is a business owner by stockholder or shareholders who
own stock (common or
preferred) representing shares of ownership in that corporation.
GAAPCorrect Answers Generally Accepted Accounting Principles
FASBCorrect Answers Financial Accounting Standards Board
, IASBCorrect Answers International accounting Standards Board
The Accounting EquationCorrect Answers Assets = Liabilities + Owners Equity
AssetsCorrect Answers Economic resources that are expected to produce a benefit in
the future
Current assetsCorrect Answers expected to be converted to cash, sold or consumed
during
the next 12 months or business operations cycle. Whichever is longer.
LiabilitiesCorrect Answers Outside claims. Debts payable to creditors
Owners' Equity or Shareholders EquityCorrect Answers Insider claims.
The Income Statement or Statement of OperationsCorrect Answers Revenues minus
expenses to equal Net Income.
The Statement of Retained EarningsCorrect Answers Shows What a company did with
it's Net Income.
Retained Earnings is the portion of net income that has been kept by t he
company
The Balance Sheet or Statement of Financial Position reportingCorrect Answers Assets,
Liabilities
And Stockholders Equity
Or the accounting equation
The Statement of Cash FlowsCorrect Answers reports three types of activities:
Operating, investing, and financing.
Operating:Correct Answers Cash flows from selling goods and providing services to
customers
Investing:Correct Answers Cash flows from the purchase and sale of long-term assets
Financing:Correct Answers Borrowing and repayment of borrowed funds
Equity transactions, such as issuing stock, paying dividends, and repurchase of
company stock
Current LiabilitiesCorrect Answers are the company's debts that are due within one year
or the company's operating cycle, whichever is longer.
Examples of Current Liabilities are:Correct Answers Accounts Payable (owed for
inventories and services purchased on credit)
Sales Tax Payable (sales tax collected from customers and due to state and local
