LOMA 361: INTRO TO ACCOUNTING
AND FINANCIAL REPORTING (MODULE
1) EXAM QUESTIONS AND ANSWERS.
VERIFIED 2026.
_________________ is a system or set of rules and methods for collecting, processing,
reporting, and monitoring financial info about a company. - ANS Accounting
Closely related to accounting is ____________ reporting, which is the process of presenting
financial info about a company's financial position, operating performance, and flow of funds
into and out of a company. - ANS financial
The accounting function consists of processes and activities that help answer 5 key business
questions: - ANS 1) What does the company own?
2) What does the company owe?
3) What has the company retained?
4) What has the company earned?
5) What has the company spent?
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
,A __________ transaction is a transaction to which a company must assign an objective
monetary value, whether the impact on the company is large or small, actual or expected. -
ANS business
_____________ is a company's ability to meet its financial obligations when they become due. -
ANS Solvency
_______________ is the overall degree of success a company has in generating positive returns
for its owners, including the company's ability to generate profits and increase the value of the
company. - ANS Profitability
Internal users of a company's accounting info include the company's (list 3): - ANS 1)
employees
2) directors
3) officers
A company's internal users typically have a __________ financial interest in the company, which
means they can gain or lose money as a result of the company's financial performance. -
ANS direct
_____________ users of a company's accounting info are people and organizations outside the
company who use the company's financial info to make various decisions about the company. -
ANS External
True or False:
External users can have either a direct or indirect financial interest in the company's
performance. - ANS True
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, External users who have a DIRECT financial interest in an insurer's performance include (list 8): -
ANS 1) Individual policyowners
2) Group policyholders
3) Benes
4) Insureds
5) Stockholders
6) Agents
7) Reinsurers
8) Creditors
External users who have an ___________ financial interest in a company's financial info are
generally seeking a company's financial info on behalf of others. - ANS indirect
Ex: competing companies, external auditors, federal agencies, state insurance depts,
independent rating agencies, tax authorities
__________ insurance depts play a particularly important role as external users of a company's
financial info: they evaluate the company's financial info to ensure that it will be able to pay its
benefit obligations, which may arise decades into the future. - ANS State
True or False:
Sometimes an individual or entity is both an internal and external user of an insurer's financial
info. - ANS True
Ex: Insurance company employees may also be policyowners, insureds, or stockholders.
3 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
AND FINANCIAL REPORTING (MODULE
1) EXAM QUESTIONS AND ANSWERS.
VERIFIED 2026.
_________________ is a system or set of rules and methods for collecting, processing,
reporting, and monitoring financial info about a company. - ANS Accounting
Closely related to accounting is ____________ reporting, which is the process of presenting
financial info about a company's financial position, operating performance, and flow of funds
into and out of a company. - ANS financial
The accounting function consists of processes and activities that help answer 5 key business
questions: - ANS 1) What does the company own?
2) What does the company owe?
3) What has the company retained?
4) What has the company earned?
5) What has the company spent?
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
,A __________ transaction is a transaction to which a company must assign an objective
monetary value, whether the impact on the company is large or small, actual or expected. -
ANS business
_____________ is a company's ability to meet its financial obligations when they become due. -
ANS Solvency
_______________ is the overall degree of success a company has in generating positive returns
for its owners, including the company's ability to generate profits and increase the value of the
company. - ANS Profitability
Internal users of a company's accounting info include the company's (list 3): - ANS 1)
employees
2) directors
3) officers
A company's internal users typically have a __________ financial interest in the company, which
means they can gain or lose money as a result of the company's financial performance. -
ANS direct
_____________ users of a company's accounting info are people and organizations outside the
company who use the company's financial info to make various decisions about the company. -
ANS External
True or False:
External users can have either a direct or indirect financial interest in the company's
performance. - ANS True
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, External users who have a DIRECT financial interest in an insurer's performance include (list 8): -
ANS 1) Individual policyowners
2) Group policyholders
3) Benes
4) Insureds
5) Stockholders
6) Agents
7) Reinsurers
8) Creditors
External users who have an ___________ financial interest in a company's financial info are
generally seeking a company's financial info on behalf of others. - ANS indirect
Ex: competing companies, external auditors, federal agencies, state insurance depts,
independent rating agencies, tax authorities
__________ insurance depts play a particularly important role as external users of a company's
financial info: they evaluate the company's financial info to ensure that it will be able to pay its
benefit obligations, which may arise decades into the future. - ANS State
True or False:
Sometimes an individual or entity is both an internal and external user of an insurer's financial
info. - ANS True
Ex: Insurance company employees may also be policyowners, insureds, or stockholders.
3 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
