ETS MAJOR FIELD TEST - FINANCIAL
ACCOUNTING EXAM QUESTIONS &
VERIFIED CORRECT ANSWERS
financial accounting - correct answer ✔✔focuses on reporting financial information to external
parties such as investors, government agencies, banks, and suppliers based on GAAP
GAAP - correct answer ✔✔generally accepted accounting principles are the accounting
principles, standards, and procedures that companies must follow when they compile their
financial statements
Entity Concept - correct answer ✔✔an organization stands apart from other organizations as a
separate economic unit
going concern concept - correct answer ✔✔entity will continue to operate long enough to
recover cost of its assets
time period concept - correct answer ✔✔report information at regular intervals such as
annually
reliability principle - correct answer ✔✔accounting records must be based on the most reliable
data available (verifiable by an independent observer)
cost principle - correct answer ✔✔assets/services acquired are recorded at actual historical cost
revenue principle - correct answer ✔✔(a) establishes when to record revenue, ned, (b) revenue
is earned when the business has completed rendering services to the customer, and (c) the
amount to record is equal to the cash value of the services or goods
ACCOUNTING EXAM QUESTIONS &
VERIFIED CORRECT ANSWERS
financial accounting - correct answer ✔✔focuses on reporting financial information to external
parties such as investors, government agencies, banks, and suppliers based on GAAP
GAAP - correct answer ✔✔generally accepted accounting principles are the accounting
principles, standards, and procedures that companies must follow when they compile their
financial statements
Entity Concept - correct answer ✔✔an organization stands apart from other organizations as a
separate economic unit
going concern concept - correct answer ✔✔entity will continue to operate long enough to
recover cost of its assets
time period concept - correct answer ✔✔report information at regular intervals such as
annually
reliability principle - correct answer ✔✔accounting records must be based on the most reliable
data available (verifiable by an independent observer)
cost principle - correct answer ✔✔assets/services acquired are recorded at actual historical cost
revenue principle - correct answer ✔✔(a) establishes when to record revenue, ned, (b) revenue
is earned when the business has completed rendering services to the customer, and (c) the
amount to record is equal to the cash value of the services or goods
