Accounting Crash
Course with correct
answers 2025/2026
Accounting is important for - Correct answerfirm's officers, investors, lenders, and the general
public
Generally Accepted Accounting Principles (GAAP) - Correct answera set of accounting standards
that is used in the preparation of financial statements
Securities and Exchange Commission (SEC) - Correct answer-division of corporate finance:
oversees financial reporting by corporations
Financial Accounting Standards Board (FASB) - Correct answerTypes of pronouncements:
,-Statements of Financial Accounting Standards
-Interpretations
-Financial Accounting Concepts
-Emerging Issues Task Force Statements
International Financial Reporting Standards (IFRS) - Correct answerunified set of international
accounting standards
Assumption 1: Accounting Entity - Correct answer-a company is considered a separate "living"
enterprise apart from its owners
-it is engaged in clearly-defined activities
-regularly reports its financial health to the general publics
-pays taxes and can file lawsuits
Assumption 2: Going Concern - Correct answer-a corporation is assumed to remain in existence
indefinitely
-assets and liabilities are recognized values that assume the company will not have to sell them
at liquidation
Assumption 3: Measurement - Correct answer-financial statements must be reported in the
national monetary unit
-can only show measurable activities of a corporation
Assumption 4: Periodicity - Correct answer-companies are required to file annual and interim
reports
-a fiscal year is frequently but not always aligned with the calendar year
Principle 1: Historical Cost - Correct answer-financial statements report companies' resources at
an initial historical cost
-represents the easiest measurement method without a need a for appraisal and revaluation
,-minimized management discretion and subjectivity
-IFRS is more willing to allow this subjectivity to avoid misrepresenting the true value of assets
Principle 2: Revenue Recognition - Correct answeraccrual basis of accounting dictates that
revenues must be recorded when earned and measurable
-cannot be recorded until the order is shipped to a customer and collection from that customer
(who uses a credit card) is reasonably assured
Principle 3: Matching Principle - Correct answercosts associated with making a product must be
recorded during the same period as revenue generated from that product
Principle 4: Full Disclosure - Correct answercompanies must reveal all relevant economic
information that they determine to make a difference to its users
-should be accomplished in: financial statements, notes to financial statements, and
supplementary information
Contraint 1: Estimates & Judgements - Correct answercertain measurements cannot be
performed completely accurately and must therefore utilize conservative estimates and
judgements
Constraint 2: Materiality - Correct answerinclusion and disclosure of financial transactions in
financial statements hinge on their size and effect on the company performing them
-materiality varies across different entities
Constraint 3: Consistency - Correct answerfor each company, the preparation financial
statements must utilize measurement techniques and assumptions which are consistent from
one period to another
Constraint 4: Conservatism - Correct answerfinancial statements should be prepared with a
downward measurement bias
-assets and revenues should not be overstates, while liabilities and expenses should not be
understated
, Form 10-K - Correct answer-required annual filing
-must be filed within 60-90 days within year end
-provides the most detailed overview of companies' financial operations and regulations
governing them
Form 10-Q - Correct answer-publicly-traded companies file a quarterly report with the SEC for
the first three quarters
-must be filed within 40-45 days of quarter end
10-K vs. 10-Q - Correct answer-10-K's are more detailed
-10-K reports are audited by an independent firm while 10-Q filings are reviewed by a CPA but
are unaudited
Form 8-K - Correct answerrequired filing any time a company undergoes or announces a
materially significant event such as a n earnings press release, an acquisition, a disposal of
assets, bankruptcy, etc.
-usually filed within 4 days of the event
Form 14A (Proxy Statement) - Correct answer-required filing prior to companies' annual
shareholder meetings
-contains detailed information about top officers and their compensations
Important Sections of the 10-K - Correct answer-Item 6: selected financial data
-Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operations
-Item 8: Financial Statements and Supplementary Data
The regulating body that oversees the development of accounting standards in the U.S. is: -
Correct answerFASB
Course with correct
answers 2025/2026
Accounting is important for - Correct answerfirm's officers, investors, lenders, and the general
public
Generally Accepted Accounting Principles (GAAP) - Correct answera set of accounting standards
that is used in the preparation of financial statements
Securities and Exchange Commission (SEC) - Correct answer-division of corporate finance:
oversees financial reporting by corporations
Financial Accounting Standards Board (FASB) - Correct answerTypes of pronouncements:
,-Statements of Financial Accounting Standards
-Interpretations
-Financial Accounting Concepts
-Emerging Issues Task Force Statements
International Financial Reporting Standards (IFRS) - Correct answerunified set of international
accounting standards
Assumption 1: Accounting Entity - Correct answer-a company is considered a separate "living"
enterprise apart from its owners
-it is engaged in clearly-defined activities
-regularly reports its financial health to the general publics
-pays taxes and can file lawsuits
Assumption 2: Going Concern - Correct answer-a corporation is assumed to remain in existence
indefinitely
-assets and liabilities are recognized values that assume the company will not have to sell them
at liquidation
Assumption 3: Measurement - Correct answer-financial statements must be reported in the
national monetary unit
-can only show measurable activities of a corporation
Assumption 4: Periodicity - Correct answer-companies are required to file annual and interim
reports
-a fiscal year is frequently but not always aligned with the calendar year
Principle 1: Historical Cost - Correct answer-financial statements report companies' resources at
an initial historical cost
-represents the easiest measurement method without a need a for appraisal and revaluation
,-minimized management discretion and subjectivity
-IFRS is more willing to allow this subjectivity to avoid misrepresenting the true value of assets
Principle 2: Revenue Recognition - Correct answeraccrual basis of accounting dictates that
revenues must be recorded when earned and measurable
-cannot be recorded until the order is shipped to a customer and collection from that customer
(who uses a credit card) is reasonably assured
Principle 3: Matching Principle - Correct answercosts associated with making a product must be
recorded during the same period as revenue generated from that product
Principle 4: Full Disclosure - Correct answercompanies must reveal all relevant economic
information that they determine to make a difference to its users
-should be accomplished in: financial statements, notes to financial statements, and
supplementary information
Contraint 1: Estimates & Judgements - Correct answercertain measurements cannot be
performed completely accurately and must therefore utilize conservative estimates and
judgements
Constraint 2: Materiality - Correct answerinclusion and disclosure of financial transactions in
financial statements hinge on their size and effect on the company performing them
-materiality varies across different entities
Constraint 3: Consistency - Correct answerfor each company, the preparation financial
statements must utilize measurement techniques and assumptions which are consistent from
one period to another
Constraint 4: Conservatism - Correct answerfinancial statements should be prepared with a
downward measurement bias
-assets and revenues should not be overstates, while liabilities and expenses should not be
understated
, Form 10-K - Correct answer-required annual filing
-must be filed within 60-90 days within year end
-provides the most detailed overview of companies' financial operations and regulations
governing them
Form 10-Q - Correct answer-publicly-traded companies file a quarterly report with the SEC for
the first three quarters
-must be filed within 40-45 days of quarter end
10-K vs. 10-Q - Correct answer-10-K's are more detailed
-10-K reports are audited by an independent firm while 10-Q filings are reviewed by a CPA but
are unaudited
Form 8-K - Correct answerrequired filing any time a company undergoes or announces a
materially significant event such as a n earnings press release, an acquisition, a disposal of
assets, bankruptcy, etc.
-usually filed within 4 days of the event
Form 14A (Proxy Statement) - Correct answer-required filing prior to companies' annual
shareholder meetings
-contains detailed information about top officers and their compensations
Important Sections of the 10-K - Correct answer-Item 6: selected financial data
-Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operations
-Item 8: Financial Statements and Supplementary Data
The regulating body that oversees the development of accounting standards in the U.S. is: -
Correct answerFASB
