A100 Final Exam Questions with Correct Answers
Accounting Equation (Balance Sheet) - CORRECT ANSWER -Assets = Liabilities +
Stockholders' Equity
Current Assets (1st on balance sheet) - CORRECT ANSWER -cash and other assets
expected to be converted into cash or used up within a year
Long Term Investments - CORRECT ANSWER -assets purchased by the company to
be held as an investment (stocks and bonds)
fixed assets (property, plant, and equipment) (second on balance sheet) -
CORRECT ANSWER -assets that will be held or used for a period longer than one
year and not expected to be resold in ordinary business operations
Intangible Assets - CORRECT ANSWER -cannot be physically touched (copyrights
and patents)
Current Liabilities (first on bottom half of balance sheet) - CORRECT ANSWER -
debts that are expected to be due within a short time, usually within a year
(accounts, wages, and utility payable)
long-term liabilities (last on second half of balance sheet) - CORRECT ANSWER -
amounts that the company expects it will not need to pay until after one year
from the date on the Balance Sheet (notes and bonds payable)
, Common Stock - CORRECT ANSWER -the basic type of stock that all corporations
must have. The amount of money received when the company originally sells
shares of ownership to various investors is the amount shown in the common
stock account
Stock is not recorded on the balance sheet until it is... - CORRECT ANSWER -
outstanding
Retained Earnings - CORRECT ANSWER -total profits of the company (minus any
losses) and minus any amounts that have been paid to stockholders over the
lifetime of the company
Liquidity - CORRECT ANSWER -how fast an asset can be converted into cash (order
of liquidity on balance sheet)
General formula for income statement - CORRECT ANSWER -revenue - expenses =
net income
Accrual Method of Accounting - CORRECT ANSWER -recording revenue when it is
earned regardless of when cash is received
Cash Basis Accounting - CORRECT ANSWER -records revenues when cash is
received
expenses - CORRECT ANSWER -amount that were used up during the period in
order to generate revenue
Accounting Equation (Balance Sheet) - CORRECT ANSWER -Assets = Liabilities +
Stockholders' Equity
Current Assets (1st on balance sheet) - CORRECT ANSWER -cash and other assets
expected to be converted into cash or used up within a year
Long Term Investments - CORRECT ANSWER -assets purchased by the company to
be held as an investment (stocks and bonds)
fixed assets (property, plant, and equipment) (second on balance sheet) -
CORRECT ANSWER -assets that will be held or used for a period longer than one
year and not expected to be resold in ordinary business operations
Intangible Assets - CORRECT ANSWER -cannot be physically touched (copyrights
and patents)
Current Liabilities (first on bottom half of balance sheet) - CORRECT ANSWER -
debts that are expected to be due within a short time, usually within a year
(accounts, wages, and utility payable)
long-term liabilities (last on second half of balance sheet) - CORRECT ANSWER -
amounts that the company expects it will not need to pay until after one year
from the date on the Balance Sheet (notes and bonds payable)
, Common Stock - CORRECT ANSWER -the basic type of stock that all corporations
must have. The amount of money received when the company originally sells
shares of ownership to various investors is the amount shown in the common
stock account
Stock is not recorded on the balance sheet until it is... - CORRECT ANSWER -
outstanding
Retained Earnings - CORRECT ANSWER -total profits of the company (minus any
losses) and minus any amounts that have been paid to stockholders over the
lifetime of the company
Liquidity - CORRECT ANSWER -how fast an asset can be converted into cash (order
of liquidity on balance sheet)
General formula for income statement - CORRECT ANSWER -revenue - expenses =
net income
Accrual Method of Accounting - CORRECT ANSWER -recording revenue when it is
earned regardless of when cash is received
Cash Basis Accounting - CORRECT ANSWER -records revenues when cash is
received
expenses - CORRECT ANSWER -amount that were used up during the period in
order to generate revenue
