ACC 101 Exam questions and
answers graded A+
Accountant - ANS✅✅A person who keeps the financial history of the transactions of an economic
unit in written form. (p. 4)
Accounting - ANS✅✅The process of analyzing, classifying, recording, summarizing, and
interpreting business transactions in financial or monetary terms. (p. 3)
Economic unit - ANS✅✅Includes both business enterprises and not-for-profit entities. (p. 3)
Ethics - ANS✅✅A philosophy or code or system of morality that is, how we conduct ourselves from
day to day in a variety of situations requiring a decision, usually of a right or wrong nature. (p. 8)
(FASB) Financial Accounting Standards Board SEC-FASB-GAAP - ANS✅✅The organization, created
in 1973 by the SEC, that created GAAP. (p. 4)
(GAAP) Generally Accepted Accounting Principles - ANS✅✅The rules or guidelines used for
carrying out the accounting process. (p. 4)
(IASB) International Accounting Standards Board - ANS✅✅The International organization that
provides Standards or rules for international financial reporting. (p. 4)
(IFRS) International Financial Reporting Standards - ANS✅✅The rules or guidelines that guide
International Financial Reporting. (p.g 4)
Paraprofessional accountants - ANS✅✅People who are qualified in accounting to assume the
duties of a general bookkeeper as well as some of the duties of a professional accountant under that
accountant's supervision. (p. 7)
Sarbanes-Oxley Act - ANS✅✅A U.S. federal law enacted as a response to a number of major
corporate and accounting scandals that establishes a wide range of rules related to the audit
environment and internal controls. (p. 9)
,(SEC) Securities and Exchange Commission - ANS✅✅The agency responsible for regulating public
companies traded on a U.S. Stock Exchange. (p. 4)
Transaction - ANS✅✅An event directly affecting an economic entity that can be expressed in
terms of money and that must be recorded in the accounting records. (p. 3)
Owner's Equity - ANS✅✅Owner's right to or investment in the business. (p. 13)
Assets - ANS✅✅Cash, properties or things of value owned by an economic unit or business entity.
(p. 13)
Business entity - ANS✅✅A business enterprise, separate and distinct from the persons who supply
the assets it uses. (p. 13)
Creditor - ANS✅✅One to whom money is owed. (p. 14)
Capital - ANS✅✅The owner's investment, or equity, in an enterprise.
(p. 13)
Chart of Accounts - ANS✅✅The official list of accounts tailor-made for the business. (p. 22)
Liabilities - ANS✅✅Debts or amounts owed to creditors. (p. 14)
Revenues - ANS✅✅Amounts earned by a business (fees for services, income from sales, rent
income, interest earned for lending money).
Expenses - ANS✅✅The costs that relate to earning revenue (the costs of doing business);
examples are wages, rent, interest, and advertising. They may be paid in cash immediately or at a
future time (AP) (p.21)
Account numbers - ANS✅✅The numbers assigned to accounts according to the chart of accounts.
(p. 22)
Accounts - ANS✅✅The categories under the Assets, Liabilities, and Owner's Equity headings. (p.16)
, Accounts Payable - ANS✅✅A liability account used for short-term obligations or charge accounts,
usually due within 30 days (p. 18)
Accounts Receivable - ANS✅✅An account used to record the amounts due from (legal claims
against) charge customers. (p.27)
Backups - ANS✅✅Procedures that store company data files in a a safe place, such as online or on a
flash drive. (p. 34)
Cloud computing - ANS✅✅Software that is used via the Internet instead of from a local computer.
Software and data can be accessed anywhere there is an Internet connection. (p. 34)
Computerized accounting - ANS✅✅An accounting system that records transactions using a
computer and accounting software such as QuickBooks. (p. 33)
Double-entry accounting - ANS✅✅The system by which each business transaction is recorded in at
least two accounts and the accounting equation is kept in balance. (p.17)
Equity - ANS✅✅The value of a right or claim to or financial interest in an asset or group of assets.
(p. 13)
Fair market value - ANS✅✅The present worth of an asset or the amount that would be received if
the asset were sold to an outsider on the open market. (p. 19)
Fundamental accounting equation - ANS✅✅(Assets=Liabilities+Owner's Equity) An equation
expressing the relationship of assets, liabilities, and owner's equity. (p. 14)
Manual accounting system - ANS✅✅An accounting system in which transactions are recorded by
hand. (p. 33)
Separate entity concept - ANS✅✅The concept by which a business is treated as a separate
economic or accounting entity. The business stands by itself, separate from its owners, creditors,
and customers. (p. 16)
answers graded A+
Accountant - ANS✅✅A person who keeps the financial history of the transactions of an economic
unit in written form. (p. 4)
Accounting - ANS✅✅The process of analyzing, classifying, recording, summarizing, and
interpreting business transactions in financial or monetary terms. (p. 3)
Economic unit - ANS✅✅Includes both business enterprises and not-for-profit entities. (p. 3)
Ethics - ANS✅✅A philosophy or code or system of morality that is, how we conduct ourselves from
day to day in a variety of situations requiring a decision, usually of a right or wrong nature. (p. 8)
(FASB) Financial Accounting Standards Board SEC-FASB-GAAP - ANS✅✅The organization, created
in 1973 by the SEC, that created GAAP. (p. 4)
(GAAP) Generally Accepted Accounting Principles - ANS✅✅The rules or guidelines used for
carrying out the accounting process. (p. 4)
(IASB) International Accounting Standards Board - ANS✅✅The International organization that
provides Standards or rules for international financial reporting. (p. 4)
(IFRS) International Financial Reporting Standards - ANS✅✅The rules or guidelines that guide
International Financial Reporting. (p.g 4)
Paraprofessional accountants - ANS✅✅People who are qualified in accounting to assume the
duties of a general bookkeeper as well as some of the duties of a professional accountant under that
accountant's supervision. (p. 7)
Sarbanes-Oxley Act - ANS✅✅A U.S. federal law enacted as a response to a number of major
corporate and accounting scandals that establishes a wide range of rules related to the audit
environment and internal controls. (p. 9)
,(SEC) Securities and Exchange Commission - ANS✅✅The agency responsible for regulating public
companies traded on a U.S. Stock Exchange. (p. 4)
Transaction - ANS✅✅An event directly affecting an economic entity that can be expressed in
terms of money and that must be recorded in the accounting records. (p. 3)
Owner's Equity - ANS✅✅Owner's right to or investment in the business. (p. 13)
Assets - ANS✅✅Cash, properties or things of value owned by an economic unit or business entity.
(p. 13)
Business entity - ANS✅✅A business enterprise, separate and distinct from the persons who supply
the assets it uses. (p. 13)
Creditor - ANS✅✅One to whom money is owed. (p. 14)
Capital - ANS✅✅The owner's investment, or equity, in an enterprise.
(p. 13)
Chart of Accounts - ANS✅✅The official list of accounts tailor-made for the business. (p. 22)
Liabilities - ANS✅✅Debts or amounts owed to creditors. (p. 14)
Revenues - ANS✅✅Amounts earned by a business (fees for services, income from sales, rent
income, interest earned for lending money).
Expenses - ANS✅✅The costs that relate to earning revenue (the costs of doing business);
examples are wages, rent, interest, and advertising. They may be paid in cash immediately or at a
future time (AP) (p.21)
Account numbers - ANS✅✅The numbers assigned to accounts according to the chart of accounts.
(p. 22)
Accounts - ANS✅✅The categories under the Assets, Liabilities, and Owner's Equity headings. (p.16)
, Accounts Payable - ANS✅✅A liability account used for short-term obligations or charge accounts,
usually due within 30 days (p. 18)
Accounts Receivable - ANS✅✅An account used to record the amounts due from (legal claims
against) charge customers. (p.27)
Backups - ANS✅✅Procedures that store company data files in a a safe place, such as online or on a
flash drive. (p. 34)
Cloud computing - ANS✅✅Software that is used via the Internet instead of from a local computer.
Software and data can be accessed anywhere there is an Internet connection. (p. 34)
Computerized accounting - ANS✅✅An accounting system that records transactions using a
computer and accounting software such as QuickBooks. (p. 33)
Double-entry accounting - ANS✅✅The system by which each business transaction is recorded in at
least two accounts and the accounting equation is kept in balance. (p.17)
Equity - ANS✅✅The value of a right or claim to or financial interest in an asset or group of assets.
(p. 13)
Fair market value - ANS✅✅The present worth of an asset or the amount that would be received if
the asset were sold to an outsider on the open market. (p. 19)
Fundamental accounting equation - ANS✅✅(Assets=Liabilities+Owner's Equity) An equation
expressing the relationship of assets, liabilities, and owner's equity. (p. 14)
Manual accounting system - ANS✅✅An accounting system in which transactions are recorded by
hand. (p. 33)
Separate entity concept - ANS✅✅The concept by which a business is treated as a separate
economic or accounting entity. The business stands by itself, separate from its owners, creditors,
and customers. (p. 16)
