ACCOUNTING VIEW AHEAD EXAM 2026
QUESTIONS AND SOLUTIONS GRADED A+
◉ steps of decision making. Answer: identify issue
gather information
identify alternatives
select option that most likely results in desired objective
◉ accounting. Answer: analysis of events
record and report financial effects of business activities
◉ where does capital come from (3). Answer: investors
creditors(lenders)
business itself (from earnings retained)
◉ 2 main types of accounting. Answer: financial and managerial
◉ managerial accounting. Answer: gather and analysis of information
for internal use and decision making.
,◉ financial accounting. Answer: gather, report, analysis of information
for external users- investors and creditors. summary of a business
◉ what does managerial accounting review. Answer: product cost,
breakeven analysis, budgeting, performance analysis, outsource
production
◉ what does financial accounting review. Answer: credit analysis,
financial health, estimate value of the company
◉ examples of external financial reports for financial accounting.
Answer: annual report, financial statement, balance sheet, income
statement, statement of cash flow
◉ balance sheet. Answer: reports assets and liabilities. basic.
list as of a point in time. as of today, as of yesterday
◉ income statement. Answer: how much did you ,ake
period of time - from nov to jan
◉ statement of cash flow. Answer: where did the cash come from and
where did the cash go
period of time - from nov to jan
,◉ lender. Answer: lends money with intend to get it back plus interest.
need current income, existing obligations, existing assets, payroll stub,
tax return, monthly payments, bank stmts
◉ investor. Answer: buys into your company. looks at if the business is
profitable, what they are buying, buying obligations, potential future
projections
◉ what forms will the manager of a business use. Answer: both financial
and managerial
◉ fasb- what does it stand for, who are they and what do they do.
Answer: financial accounting standards board
private group, not govt agency, no legal authority, conducted of people
from a variety of business related backgrounds.
establishes financial accounting and reporting standards for private
sector companies
1 of the two boards that make up GAAP
◉ gasb- what does it stand for, who are they, what do they do. Answer:
governmental accounting standards board
sets accounting and financial reporting standards for state and legal
governments.
authority over financial reporting by government entities
1 of the two boards that make up GAAP
, ◉ gaap. Answer: generally accepted accounting principles
◉ sec. Answer: Securities and Exchange Commission
regulates us stock exchange. provides investors with full and fair
information about publicly traded companies.
legal punishment
◉ iasb. Answer: International Accounting Standards Board
develop international accounting standards. made up of members from
many countries
◉ aicpa. Answer: american institute of certified public accountants
administers the cpa exam.
enforces professional sanction by taking away cpa license when acted
unethically.
◉ role and purpose of accounting. Answer: accumulate and report on
financial information about performance, financial position, cash flow of
a business. used to reach decisions about how to manage the business,
invest in it, or lend money to it
◉ what is a balance sheet. Answer: statement of what they have and how
they financed it at a specific point in time.
QUESTIONS AND SOLUTIONS GRADED A+
◉ steps of decision making. Answer: identify issue
gather information
identify alternatives
select option that most likely results in desired objective
◉ accounting. Answer: analysis of events
record and report financial effects of business activities
◉ where does capital come from (3). Answer: investors
creditors(lenders)
business itself (from earnings retained)
◉ 2 main types of accounting. Answer: financial and managerial
◉ managerial accounting. Answer: gather and analysis of information
for internal use and decision making.
,◉ financial accounting. Answer: gather, report, analysis of information
for external users- investors and creditors. summary of a business
◉ what does managerial accounting review. Answer: product cost,
breakeven analysis, budgeting, performance analysis, outsource
production
◉ what does financial accounting review. Answer: credit analysis,
financial health, estimate value of the company
◉ examples of external financial reports for financial accounting.
Answer: annual report, financial statement, balance sheet, income
statement, statement of cash flow
◉ balance sheet. Answer: reports assets and liabilities. basic.
list as of a point in time. as of today, as of yesterday
◉ income statement. Answer: how much did you ,ake
period of time - from nov to jan
◉ statement of cash flow. Answer: where did the cash come from and
where did the cash go
period of time - from nov to jan
,◉ lender. Answer: lends money with intend to get it back plus interest.
need current income, existing obligations, existing assets, payroll stub,
tax return, monthly payments, bank stmts
◉ investor. Answer: buys into your company. looks at if the business is
profitable, what they are buying, buying obligations, potential future
projections
◉ what forms will the manager of a business use. Answer: both financial
and managerial
◉ fasb- what does it stand for, who are they and what do they do.
Answer: financial accounting standards board
private group, not govt agency, no legal authority, conducted of people
from a variety of business related backgrounds.
establishes financial accounting and reporting standards for private
sector companies
1 of the two boards that make up GAAP
◉ gasb- what does it stand for, who are they, what do they do. Answer:
governmental accounting standards board
sets accounting and financial reporting standards for state and legal
governments.
authority over financial reporting by government entities
1 of the two boards that make up GAAP
, ◉ gaap. Answer: generally accepted accounting principles
◉ sec. Answer: Securities and Exchange Commission
regulates us stock exchange. provides investors with full and fair
information about publicly traded companies.
legal punishment
◉ iasb. Answer: International Accounting Standards Board
develop international accounting standards. made up of members from
many countries
◉ aicpa. Answer: american institute of certified public accountants
administers the cpa exam.
enforces professional sanction by taking away cpa license when acted
unethically.
◉ role and purpose of accounting. Answer: accumulate and report on
financial information about performance, financial position, cash flow of
a business. used to reach decisions about how to manage the business,
invest in it, or lend money to it
◉ what is a balance sheet. Answer: statement of what they have and how
they financed it at a specific point in time.
