FINANCIAL AND MANAGERIAL ACCOUNTING
BY JOHN WILD ACTUAL TEST 2026 VERIFIED
QUESTIONS AND ANSWERS COMPREHENSIVE
STUDY GUIDE
◉ 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.
◉ balance sheet equation.
Answer: assets = liabilities + owners equity
◉ what are assets and examples.
Answer: what they own or control that will provide probable future
benefits
cash, accts receivable, inventory, buildings, land.
,◉ what are liabilities and examples.
Answer: what we owe. obligations that require future sacrifice.
phone bill, car loan, accts payable, fed and state govt tax, mortgage,
unearned revenue
◉ what is owners equity and examples.
Answer: owners share, stockholders equity, how much owner
originally invested in business + how much profit they have left
capital stock- amt given by shareholders to obtain shares of
stock(capital=$ so money from stocks)
retained earnings- earnings retained in business, ex= net income
◉ do dividends increase or decrease owners equity.
Answer: decrease
◉ does investments by owners increase or decrease owners equity.
Answer: increase
◉ what is an income stmt.
Answer: analyzes economic performance for a specific period of
time. statement of income. revenues, expenses, liabilities.
, ◉ equation for net income.
Answer: net income= revenues - expenses
◉ does revenues increase or decrease net assets.
Answer: increase
◉ does expenses increase or decrease net assets.
Answer: decrease
◉ what is revenue.
Answer: amount of assets created from sale.
products, membership, software, hardware, etc
◉ what are expenses.
Answer: amount of assets consumed in generating revenues.
wages, utilities, wholesale cost
◉ if revenue exceeds expenses what happens.
Answer: you get net income
◉ if revenue is less than expenses paid, what happens.
Answer: net loss
BY JOHN WILD ACTUAL TEST 2026 VERIFIED
QUESTIONS AND ANSWERS COMPREHENSIVE
STUDY GUIDE
◉ 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.
◉ balance sheet equation.
Answer: assets = liabilities + owners equity
◉ what are assets and examples.
Answer: what they own or control that will provide probable future
benefits
cash, accts receivable, inventory, buildings, land.
,◉ what are liabilities and examples.
Answer: what we owe. obligations that require future sacrifice.
phone bill, car loan, accts payable, fed and state govt tax, mortgage,
unearned revenue
◉ what is owners equity and examples.
Answer: owners share, stockholders equity, how much owner
originally invested in business + how much profit they have left
capital stock- amt given by shareholders to obtain shares of
stock(capital=$ so money from stocks)
retained earnings- earnings retained in business, ex= net income
◉ do dividends increase or decrease owners equity.
Answer: decrease
◉ does investments by owners increase or decrease owners equity.
Answer: increase
◉ what is an income stmt.
Answer: analyzes economic performance for a specific period of
time. statement of income. revenues, expenses, liabilities.
, ◉ equation for net income.
Answer: net income= revenues - expenses
◉ does revenues increase or decrease net assets.
Answer: increase
◉ does expenses increase or decrease net assets.
Answer: decrease
◉ what is revenue.
Answer: amount of assets created from sale.
products, membership, software, hardware, etc
◉ what are expenses.
Answer: amount of assets consumed in generating revenues.
wages, utilities, wholesale cost
◉ if revenue exceeds expenses what happens.
Answer: you get net income
◉ if revenue is less than expenses paid, what happens.
Answer: net loss
