ACC 501 EXAM 1 (LATEST UPDATE) REAL QUESTIONS AND
VERIFIED ANSWERS |100% CORRECT | ALREADY GRADED
A
How do you efficiently allocate capital Ans✓✓✓Capital(savings)-
Investment-Businesses(ideas, assets, and processes)- returns... all of this
is in a circle
in the middle: effective accounting institutions, regulations, and
practices facilitate efficient capital allocation
What is accounting Ans✓✓✓An information system to measures
business activities, processed data into reports and financial statements,
and communicates results to decision makers
What is the objective of financial reporting Ans✓✓✓Provide (financial)
information that is useful in making (equity) investment and lending
decisions
Financial information must Ans✓✓✓1. Be useful to evaluate past
performance and predict future performance
2. Faithfully represent economic reality
What is the role of accounting Ans✓✓✓It attempts to reflect business
economics in a manner that is useful to decision makers, financial
statements reflect measurements of firm position and performance, and
accounting promotes appropriate resource allocation by firms and capital
markets
,What type of firms use accounting Ans✓✓✓For profit, not for profit,
and government entities
Who uses accounting outside of the firm Ans✓✓✓owners(equity
investors)/creditors, potential owners/potential creditors, government
regulators and policy makers, consultants, industry analysts,
competitors, industry associations, other "watch dog" groups, auditors,
the general public
Who uses accounting inside the firm Ans✓✓✓Board of
directors(representing owners & evaluating senior management), senior
management, profit center managers, cost center managers, anyone who
manages a budget, anyone measured by financial information,
controlling function (ex. accountants)
Who is the primary audience for financial accounting information
Ans✓✓✓Stockholders (investors in firm equity), potential stockholders,
creditors, and potential creditors
Board of directors Ans✓✓✓Elected by stockholders, appoint corporate
officers, and set key polices including: approve the payment of
dividends to stockholders and authorize management to repurchase of
stock
3 types of accounting Ans✓✓✓Financial, Managerial, Tax
, Financial Accounting Ans✓✓✓For decision makers outside the entity
investors, creditors, government agencies, the public
Managerial Accounting Ans✓✓✓For managers inside the entity
budgets, forecasts, and analysis for internal decision making
Tax Accounting Ans✓✓✓To manage taxes and prepare returns
corporations and private practice serving clients
2 Accounting regulations Ans✓✓✓Generally Accepted Accounting
Principles (GAAP) and International Financial Reporting Standards
(IFRS)
GAAP Ans✓✓✓Generally Accepted Accounting Principles. Holds
accounting rules for the U.S. and is formulated by the financial
accounting standards board (FASB)
IFRS Ans✓✓✓International Financial Reporting Standards. Holds
accounting rules for over 100 other countries and is formulated by the
international accounting standards board (IASB)
VERIFIED ANSWERS |100% CORRECT | ALREADY GRADED
A
How do you efficiently allocate capital Ans✓✓✓Capital(savings)-
Investment-Businesses(ideas, assets, and processes)- returns... all of this
is in a circle
in the middle: effective accounting institutions, regulations, and
practices facilitate efficient capital allocation
What is accounting Ans✓✓✓An information system to measures
business activities, processed data into reports and financial statements,
and communicates results to decision makers
What is the objective of financial reporting Ans✓✓✓Provide (financial)
information that is useful in making (equity) investment and lending
decisions
Financial information must Ans✓✓✓1. Be useful to evaluate past
performance and predict future performance
2. Faithfully represent economic reality
What is the role of accounting Ans✓✓✓It attempts to reflect business
economics in a manner that is useful to decision makers, financial
statements reflect measurements of firm position and performance, and
accounting promotes appropriate resource allocation by firms and capital
markets
,What type of firms use accounting Ans✓✓✓For profit, not for profit,
and government entities
Who uses accounting outside of the firm Ans✓✓✓owners(equity
investors)/creditors, potential owners/potential creditors, government
regulators and policy makers, consultants, industry analysts,
competitors, industry associations, other "watch dog" groups, auditors,
the general public
Who uses accounting inside the firm Ans✓✓✓Board of
directors(representing owners & evaluating senior management), senior
management, profit center managers, cost center managers, anyone who
manages a budget, anyone measured by financial information,
controlling function (ex. accountants)
Who is the primary audience for financial accounting information
Ans✓✓✓Stockholders (investors in firm equity), potential stockholders,
creditors, and potential creditors
Board of directors Ans✓✓✓Elected by stockholders, appoint corporate
officers, and set key polices including: approve the payment of
dividends to stockholders and authorize management to repurchase of
stock
3 types of accounting Ans✓✓✓Financial, Managerial, Tax
, Financial Accounting Ans✓✓✓For decision makers outside the entity
investors, creditors, government agencies, the public
Managerial Accounting Ans✓✓✓For managers inside the entity
budgets, forecasts, and analysis for internal decision making
Tax Accounting Ans✓✓✓To manage taxes and prepare returns
corporations and private practice serving clients
2 Accounting regulations Ans✓✓✓Generally Accepted Accounting
Principles (GAAP) and International Financial Reporting Standards
(IFRS)
GAAP Ans✓✓✓Generally Accepted Accounting Principles. Holds
accounting rules for the U.S. and is formulated by the financial
accounting standards board (FASB)
IFRS Ans✓✓✓International Financial Reporting Standards. Holds
accounting rules for over 100 other countries and is formulated by the
international accounting standards board (IASB)
