ACCOUNTING EXAM FOR FDIC
EXAM STUDY GUIDE SOLUTIONS
Financial accounting - ANSWER✔✔-creates financial reports for the use of
both internal and external parties
managerial accounting - ANSWER✔✔-the internal use of accounting
statements by managers in planning and directing the organization's
activities
financial statements - ANSWER✔✔-4 types: balance sheet, income
statement, statement of CFs and the statement of owners' equity
Objective of financial reporting - ANSWER✔✔-to provide financial
information about the reporting entity that is useful to present and
potential equity investors, lenders, and other creditors in decisions about
providing resources to the entity
Copyright ©EMILLYCHARLOTE 2025 ACADEMIC YEAR, ALL RIGHTS RESERVED. Page 1/66
,general purpose financial statements - ANSWER✔✔-provide general
information to a wide variety of users. It allows everyone to better
understand its financial position
entity perspective - ANSWER✔✔-a perspective where companies are
viewed as separate and distinct from their owners'
proprietary perspective - ANSWER✔✔-a perspective that financial
reporting should be focused only on the needs of shareholders. Not
considered appropriate
decision-usefulness - ANSWER✔✔-financial reporting provides
information that is useful for making decisions. Investors want to assess
the company's ability to generate cash flows and management's ability to
protect capital investments
Accrual Basis Accounting - ANSWER✔✔-ensures that a company records
events that change its financial statements in the periods in which the
events occur, rather than only in the periods when it receives or pays cash.
Recognizes revenue when it provides the goods or services than when it
receives the cash
Copyright ©EMILLYCHARLOTE 2025 ACADEMIC YEAR, ALL RIGHTS RESERVED. Page 2/66
,GAAP (Generally Accepted Accounting Principles) - ANSWER✔✔-A
single set of universal rules in regards to creating financial statements.
Allows the reviewers of statements to understand without having to read a
new set of rules each time
Parties involved in standard-setting - ANSWER✔✔-SEC, AICPA & FASB
SEC - ANSWER✔✔-standardize financial information presented to
stockholders. SEC requires registrants to adhere to GAAP. The SEC relies
on the FASB to develop accounting standards. The companies listed on the
stock exchange must submit their financial statements to the SEC
American Institute of Certified Public Accountants (AICPA) -
ANSWER✔✔-The Committee on Accounting Procedures (CAP) was
appointed by SEC. It issues accounting research bulletins that dealt with a
variety of accounting problems, but this structure ended up failing. Later
created the Accounting Principles Board
Accounting Principles Board - ANSWER✔✔-purposes were to advance the
written expression of accounting principles, determine appropriate
practices and narrow the areas of difference and inconsistency in practice.
Copyright ©EMILLYCHARLOTE 2025 ACADEMIC YEAR, ALL RIGHTS RESERVED. Page 3/66
, Has 18-21 members on the board. Came under fire early because of a lack
of productivity and failing to act promptly to correct accounting abuses
The FASB came to replace the ___ - ANSWER✔✔-APB. Which also created
the accounting standards executive committee as the committee authorized
to speak for the AICPA
Financial Accounting Standards Board - ANSWER✔✔-mission is to
establish and improve standards of financial accounting and reporting for
the guidance and education of the public. The financial accounting
foundation, FASB and Financial Accounting Standards Advisory Council
fall under this
Financial Accounting Foundation - ANSWER✔✔-its purpose is to select
members of the FASB & GASB, fund their activities and have general
oversight
FASB - ANSWER✔✔-purpose to establish and improve standards of
financial accounting and reporting
Copyright ©EMILLYCHARLOTE 2025 ACADEMIC YEAR, ALL RIGHTS RESERVED. Page 4/66
EXAM STUDY GUIDE SOLUTIONS
Financial accounting - ANSWER✔✔-creates financial reports for the use of
both internal and external parties
managerial accounting - ANSWER✔✔-the internal use of accounting
statements by managers in planning and directing the organization's
activities
financial statements - ANSWER✔✔-4 types: balance sheet, income
statement, statement of CFs and the statement of owners' equity
Objective of financial reporting - ANSWER✔✔-to provide financial
information about the reporting entity that is useful to present and
potential equity investors, lenders, and other creditors in decisions about
providing resources to the entity
Copyright ©EMILLYCHARLOTE 2025 ACADEMIC YEAR, ALL RIGHTS RESERVED. Page 1/66
,general purpose financial statements - ANSWER✔✔-provide general
information to a wide variety of users. It allows everyone to better
understand its financial position
entity perspective - ANSWER✔✔-a perspective where companies are
viewed as separate and distinct from their owners'
proprietary perspective - ANSWER✔✔-a perspective that financial
reporting should be focused only on the needs of shareholders. Not
considered appropriate
decision-usefulness - ANSWER✔✔-financial reporting provides
information that is useful for making decisions. Investors want to assess
the company's ability to generate cash flows and management's ability to
protect capital investments
Accrual Basis Accounting - ANSWER✔✔-ensures that a company records
events that change its financial statements in the periods in which the
events occur, rather than only in the periods when it receives or pays cash.
Recognizes revenue when it provides the goods or services than when it
receives the cash
Copyright ©EMILLYCHARLOTE 2025 ACADEMIC YEAR, ALL RIGHTS RESERVED. Page 2/66
,GAAP (Generally Accepted Accounting Principles) - ANSWER✔✔-A
single set of universal rules in regards to creating financial statements.
Allows the reviewers of statements to understand without having to read a
new set of rules each time
Parties involved in standard-setting - ANSWER✔✔-SEC, AICPA & FASB
SEC - ANSWER✔✔-standardize financial information presented to
stockholders. SEC requires registrants to adhere to GAAP. The SEC relies
on the FASB to develop accounting standards. The companies listed on the
stock exchange must submit their financial statements to the SEC
American Institute of Certified Public Accountants (AICPA) -
ANSWER✔✔-The Committee on Accounting Procedures (CAP) was
appointed by SEC. It issues accounting research bulletins that dealt with a
variety of accounting problems, but this structure ended up failing. Later
created the Accounting Principles Board
Accounting Principles Board - ANSWER✔✔-purposes were to advance the
written expression of accounting principles, determine appropriate
practices and narrow the areas of difference and inconsistency in practice.
Copyright ©EMILLYCHARLOTE 2025 ACADEMIC YEAR, ALL RIGHTS RESERVED. Page 3/66
, Has 18-21 members on the board. Came under fire early because of a lack
of productivity and failing to act promptly to correct accounting abuses
The FASB came to replace the ___ - ANSWER✔✔-APB. Which also created
the accounting standards executive committee as the committee authorized
to speak for the AICPA
Financial Accounting Standards Board - ANSWER✔✔-mission is to
establish and improve standards of financial accounting and reporting for
the guidance and education of the public. The financial accounting
foundation, FASB and Financial Accounting Standards Advisory Council
fall under this
Financial Accounting Foundation - ANSWER✔✔-its purpose is to select
members of the FASB & GASB, fund their activities and have general
oversight
FASB - ANSWER✔✔-purpose to establish and improve standards of
financial accounting and reporting
Copyright ©EMILLYCHARLOTE 2025 ACADEMIC YEAR, ALL RIGHTS RESERVED. Page 4/66
