ACC 240 Exam 1 Study Guide | Financial Accounting Review, Key Concepts &
Practice Questions
Organizations that provide financial info to external users? - ✔✔profit-oriented business,
charitable organizations
Providers of financial information? - ✔✔companies, households, schools
External users of a company's financial info include ... - ✔✔credit-ranking agencies, banks,
labor unions
The accrual accounting model is best able to achieve goal of predicting _____ cash flows -
✔✔future
what accounting model produces a measure called net operating cash flow? - ✔✔cash basis
The accrual accounting model's measure of resources provided by business operations is called?
- ✔✔revenue
An ______ event is any event that directly affects the financial position of the company. -
✔✔economic
Examples of external events? - ✔✔borrowing from bank, collecting on a customer account,
paying employee salaries
What is an internal event? - ✔✔affects company's financial position and does not involve an
exchange transaction with another entity
, An _____ event involves an exchange between the company and a separate economic entity -
✔✔external
Borrowing $50,000 from bank and signing a NP - ✔✔Cash up, NP up
Ae cleaning services performs cleaning services for $2000 cash - ✔✔Cash up, OE up
The use of office supplies purchased on account in previous month - ✔✔A down, RE down
What would cause liabilities to decrease? - ✔✔payment made on account to vendor
Probable future sacrifices of economic benefits? - ✔✔liability
Probable future economic benefits owned by company? - ✔✔assets
Inflows of assets from ongoing, major activities? - ✔✔revenues
Decrease in equity from peripheral or incidental transactions? - ✔✔losses
Provide services to customer on account for $37,000 - ✔✔A up 37,000 , SE up 37,000
Purchase equipment by signing note with bank for $29,000 - ✔✔A up 29,000 , L up 29,000
Repay $22,000 of note - ✔✔A down 22,000 , L down 22,000
Pay utilities of $3700 for current month - ✔✔A down 3700 , SE down 3700
Practice Questions
Organizations that provide financial info to external users? - ✔✔profit-oriented business,
charitable organizations
Providers of financial information? - ✔✔companies, households, schools
External users of a company's financial info include ... - ✔✔credit-ranking agencies, banks,
labor unions
The accrual accounting model is best able to achieve goal of predicting _____ cash flows -
✔✔future
what accounting model produces a measure called net operating cash flow? - ✔✔cash basis
The accrual accounting model's measure of resources provided by business operations is called?
- ✔✔revenue
An ______ event is any event that directly affects the financial position of the company. -
✔✔economic
Examples of external events? - ✔✔borrowing from bank, collecting on a customer account,
paying employee salaries
What is an internal event? - ✔✔affects company's financial position and does not involve an
exchange transaction with another entity
, An _____ event involves an exchange between the company and a separate economic entity -
✔✔external
Borrowing $50,000 from bank and signing a NP - ✔✔Cash up, NP up
Ae cleaning services performs cleaning services for $2000 cash - ✔✔Cash up, OE up
The use of office supplies purchased on account in previous month - ✔✔A down, RE down
What would cause liabilities to decrease? - ✔✔payment made on account to vendor
Probable future sacrifices of economic benefits? - ✔✔liability
Probable future economic benefits owned by company? - ✔✔assets
Inflows of assets from ongoing, major activities? - ✔✔revenues
Decrease in equity from peripheral or incidental transactions? - ✔✔losses
Provide services to customer on account for $37,000 - ✔✔A up 37,000 , SE up 37,000
Purchase equipment by signing note with bank for $29,000 - ✔✔A up 29,000 , L up 29,000
Repay $22,000 of note - ✔✔A down 22,000 , L down 22,000
Pay utilities of $3700 for current month - ✔✔A down 3700 , SE down 3700
