MGT 8803 Financial Accounting {LATEST
2026 -2027 update} QUESTIONS AND
ANSWERS 100% CORRECT - Georgia
Institute Of Technology
A distribution of earnings, and that only occurs when the board of directors decides to
distribute the earnings - correct answer dividends
Beginning Retained Earnings
_ _____________________
_ _____________________
= Ending Retained Earnings - correct answer + Net Income, - Dividends
Beginning Stockholders' Equity
_ _____________________
_ _____________________
,_ _____________________
= Ending Stockholders' Equity - correct answer + Net Income, - Dividends, + Issuance
of Capital Stock
Value received for goods sold or services performed - correct answer revenue
Payment, or obligations, for goods or services received - correct answer expenses
• ______________ is not necessarily involved in the determination of revenues or
expenses.
• With cash basis accounting, revenues will be recognized when cash is ______________ ,
and expenses will be recognized when cash is ______________
• Income statement uses ______________ accounting, not cash basis - correct answer
cash, received, paid out, accrual
,Revenue is recognized when ________________
• ________________ of goods
• ________________ of service
(the earning process is considered to be complete even though cash has not yet been
collected) - correct answer earned, delivery, performance
• Costs are reported as expenses in the same time period as their related revenues.
• Costs that cannot be matched with specific revenues are matched with future time
periods that benefit from the cost. - correct answer matching principle
• Shows the results of a company's operations (i.e., success) over a period of time.
• Focuses on a time interval. It looks at what happened over a period of time. At a
minimum, this period of time is a one year period.
• Fiscal year is any 12 month period that the company chooses. - correct answer
income statement
, __________________________
_ ________________________
= Net Income - correct answer revenues earned, - expenses incurred
Net Sales
- ______________________________
= Gross Margin - correct answer Cost of Goods Sold
Net Sales
- Cost of Goods Sold
= __________________________
- Operating Expenses (S, G, & A)
= _____________________________
+/- Other Rev & Expenses (Gains, Losses, Interest, Div Rev)
2026 -2027 update} QUESTIONS AND
ANSWERS 100% CORRECT - Georgia
Institute Of Technology
A distribution of earnings, and that only occurs when the board of directors decides to
distribute the earnings - correct answer dividends
Beginning Retained Earnings
_ _____________________
_ _____________________
= Ending Retained Earnings - correct answer + Net Income, - Dividends
Beginning Stockholders' Equity
_ _____________________
_ _____________________
,_ _____________________
= Ending Stockholders' Equity - correct answer + Net Income, - Dividends, + Issuance
of Capital Stock
Value received for goods sold or services performed - correct answer revenue
Payment, or obligations, for goods or services received - correct answer expenses
• ______________ is not necessarily involved in the determination of revenues or
expenses.
• With cash basis accounting, revenues will be recognized when cash is ______________ ,
and expenses will be recognized when cash is ______________
• Income statement uses ______________ accounting, not cash basis - correct answer
cash, received, paid out, accrual
,Revenue is recognized when ________________
• ________________ of goods
• ________________ of service
(the earning process is considered to be complete even though cash has not yet been
collected) - correct answer earned, delivery, performance
• Costs are reported as expenses in the same time period as their related revenues.
• Costs that cannot be matched with specific revenues are matched with future time
periods that benefit from the cost. - correct answer matching principle
• Shows the results of a company's operations (i.e., success) over a period of time.
• Focuses on a time interval. It looks at what happened over a period of time. At a
minimum, this period of time is a one year period.
• Fiscal year is any 12 month period that the company chooses. - correct answer
income statement
, __________________________
_ ________________________
= Net Income - correct answer revenues earned, - expenses incurred
Net Sales
- ______________________________
= Gross Margin - correct answer Cost of Goods Sold
Net Sales
- Cost of Goods Sold
= __________________________
- Operating Expenses (S, G, & A)
= _____________________________
+/- Other Rev & Expenses (Gains, Losses, Interest, Div Rev)
