Finance Midterm 1- Questions and
Answers Grade A+ 2023
Assests - -what the company owns(resources of a company):
cash
accounts receivable
land
equipment
patent rights
-Liabilities - -what the company owes:
notes payable
accounts payable
salaries payable
long-term debt
-General areas of accounting the course relates too: - -financial statement preparation and
reporting
financial statement auditing and compliance
loosely relates to: internal controls auditing and compliance
-financial accountant - -hired by a firm to prepare financial reports
works under chief financial officer
head financial accountant is usually called the Controller
-auditor - -independent agent hired by the firm to attest and asses to the financial reporting
quality of the firm
regular inspection of the financial processes
-Two Types of Privately Held Firms - -Proprietorship: small firm with one specific owner
Partnership: medium sized firm with shared owner
-Type of Publically Held Firm - -Corporation: large firm with diverse ownership
-ownership rights can be bought or sold on an open marker
-Financial Accounting should provide info that: - -1. is useful to investors and creditors in
making decisions
2. helps to predict cash flow
3. tells about economic resources, claims to resources, and changes in resources and claims
-Agency Theory suggests: - -without proper monitoring and incentives, agents will extract
perquisites
-financial reports help to monitor managers actions
Answers Grade A+ 2023
Assests - -what the company owns(resources of a company):
cash
accounts receivable
land
equipment
patent rights
-Liabilities - -what the company owes:
notes payable
accounts payable
salaries payable
long-term debt
-General areas of accounting the course relates too: - -financial statement preparation and
reporting
financial statement auditing and compliance
loosely relates to: internal controls auditing and compliance
-financial accountant - -hired by a firm to prepare financial reports
works under chief financial officer
head financial accountant is usually called the Controller
-auditor - -independent agent hired by the firm to attest and asses to the financial reporting
quality of the firm
regular inspection of the financial processes
-Two Types of Privately Held Firms - -Proprietorship: small firm with one specific owner
Partnership: medium sized firm with shared owner
-Type of Publically Held Firm - -Corporation: large firm with diverse ownership
-ownership rights can be bought or sold on an open marker
-Financial Accounting should provide info that: - -1. is useful to investors and creditors in
making decisions
2. helps to predict cash flow
3. tells about economic resources, claims to resources, and changes in resources and claims
-Agency Theory suggests: - -without proper monitoring and incentives, agents will extract
perquisites
-financial reports help to monitor managers actions
