Accounting Fundamentals ACTUAL UPDATED QUESTIONS AND CORRECT
ANSWERS
What is the Accounting Cycle? Prep financial statements, transactions,make entries in general journal, calssify
data in general ledger, take a trial balance
, What is accounting? distinct discipline with its own standards and language.
What does GAAP stand for? Gnerally accepted accounting principles
What is sole proprietorship? a business that is owned by an individual
What is partnership? a business that is owned by two or more persons.
What is a corporation? a separate, legal entity and is owned by stockholders.
What is FASB? Financial Accounting Standards Board
What is AICPA? American Insititue of Certififed Public Accountants
What is SEC? Securities and Exchange Commisisions
What are the five GAAPs? Business Entity, Cost, Objectivity,Continuing-Concern, Stable Dollar
What is business entity principle? states that a business must be considered a separate entity and only the
transactions carried out by the business may be recorded.
What is cost principle mean? states anything a business purchases is record at the amount paid, regardless of
its real or perceived value.
What is objectivity principl? states accounting operates on objective evidence. All transactions must have
proof that they were carried out.
What type of proof is valid when verify only reliable proof that a transaction occured is found in source documents as
a transaction? such as sales slip or an invoice.
What is continuing-concern principle? states a business is a continuing enterpise and its buildings, land or eqiupment
cannot be sold without disrupting the business.
What is stable dollar principle? states the value of the dollar does not change.
In accounting, what defines a transaction? the completed sale or exchagne of goods or services, and includes internal and
external transactoins.
In accounting, what are resouces categorized as? Assets, Liabilities, Owner's Equity
What are assets? property or property rights that a buiness owns
What are liabilities? debts or obligations owned by a business
What is owner's equity? the financial interest of the owner
What is the acocunting equation? Assets= liabilites + owners equity
ANSWERS
What is the Accounting Cycle? Prep financial statements, transactions,make entries in general journal, calssify
data in general ledger, take a trial balance
, What is accounting? distinct discipline with its own standards and language.
What does GAAP stand for? Gnerally accepted accounting principles
What is sole proprietorship? a business that is owned by an individual
What is partnership? a business that is owned by two or more persons.
What is a corporation? a separate, legal entity and is owned by stockholders.
What is FASB? Financial Accounting Standards Board
What is AICPA? American Insititue of Certififed Public Accountants
What is SEC? Securities and Exchange Commisisions
What are the five GAAPs? Business Entity, Cost, Objectivity,Continuing-Concern, Stable Dollar
What is business entity principle? states that a business must be considered a separate entity and only the
transactions carried out by the business may be recorded.
What is cost principle mean? states anything a business purchases is record at the amount paid, regardless of
its real or perceived value.
What is objectivity principl? states accounting operates on objective evidence. All transactions must have
proof that they were carried out.
What type of proof is valid when verify only reliable proof that a transaction occured is found in source documents as
a transaction? such as sales slip or an invoice.
What is continuing-concern principle? states a business is a continuing enterpise and its buildings, land or eqiupment
cannot be sold without disrupting the business.
What is stable dollar principle? states the value of the dollar does not change.
In accounting, what defines a transaction? the completed sale or exchagne of goods or services, and includes internal and
external transactoins.
In accounting, what are resouces categorized as? Assets, Liabilities, Owner's Equity
What are assets? property or property rights that a buiness owns
What are liabilities? debts or obligations owned by a business
What is owner's equity? the financial interest of the owner
What is the acocunting equation? Assets= liabilites + owners equity
