FINANCIAL ACCOUNTING FOR MANAGERS BY
DAVID SPICELAND FINAL PAPER 2026
COMPLETE ANSWERS BUDGETING AND
PERFORMANCE PRACTICE RESOURCE
◉ What are the three primary financial statements?
Answer: Balance sheet, income statement, statement of cash flows
◉ What does the balance sheet report?
Answer: A company's assets, liabilities, and owners' equity
◉ What does the income statement report?
Answer: The amount of net income earned by a company during a
period
◉ What does the statement of cash flows report?
Answer: The amount of cash collected and paid out by a company
◉ Who are among the users of financial accounting information?
Answer: Lenders, investors, company management, suppliers,
customers, employees, competitors, government agencies,
politicians, and the press
,◉ What organization establishes U.S. accounting rules?
Answer: Financial Accounting Standards Board (FASB)
◉ What three factors have contributed to significant changes in
accounting?
Answer: Rapid advance in information technology, international
integration of business, increased scrutiny from corporate scandals
◉ Which of the following is NOT one of the three primary financial
statements?
Answer: The Statement of Retained Earnings
◉ Why does a company prepare and provide financial statements?
Answer: To reduce uncertainty for investors regarding future
financial performance
◉ What is a balance sheet?
Answer: A financial statement that presents the financial position of
a company at a particular point in time.
◉ What are the three major categories of a balance sheet?
Answer: Assets, liabilities, and owners' equity.
,◉ What does the basic accounting equation state?
Answer: Assets = Liabilities + Owners' Equity.
◉ What is the separate entity concept?
Answer: The idea that the activities of the entity are to be separated
from those of the individual owner.
◉ What is another name for the balance sheet?
Answer: Statement of financial position.
◉ What is the value at which land purchased for $90,000 in 2010
appears on the books in 2013?
Answer: $90,000.
◉ What is the going concern concept?
Answer: The idea that businesses must be accounted for as though
they will exist at least for the foreseeable future.
◉ What distinguishes between current and long-term assets?
Answer: Classified balance sheet.
, ◉ What is an example of a long-term liability?
Answer: Mortgage payable.
◉ What is the monetary measurement principle?
Answer: The idea that transactions are recorded at their exchange
prices at the transaction date.
◉ What does the income statement describe?
Answer: A company's financial performance for a specified period of
time.
◉ What is the financial statement that summarizes revenues and
expenses for a specific period?
Answer: Income Statement.
◉ What is net income?
Answer: An overall measure of the performance of a business
entity's activities.
◉ Where do expense and revenue accounts appear?
Answer: Income statement.
◉ What increases from the sale of goods or services?
DAVID SPICELAND FINAL PAPER 2026
COMPLETE ANSWERS BUDGETING AND
PERFORMANCE PRACTICE RESOURCE
◉ What are the three primary financial statements?
Answer: Balance sheet, income statement, statement of cash flows
◉ What does the balance sheet report?
Answer: A company's assets, liabilities, and owners' equity
◉ What does the income statement report?
Answer: The amount of net income earned by a company during a
period
◉ What does the statement of cash flows report?
Answer: The amount of cash collected and paid out by a company
◉ Who are among the users of financial accounting information?
Answer: Lenders, investors, company management, suppliers,
customers, employees, competitors, government agencies,
politicians, and the press
,◉ What organization establishes U.S. accounting rules?
Answer: Financial Accounting Standards Board (FASB)
◉ What three factors have contributed to significant changes in
accounting?
Answer: Rapid advance in information technology, international
integration of business, increased scrutiny from corporate scandals
◉ Which of the following is NOT one of the three primary financial
statements?
Answer: The Statement of Retained Earnings
◉ Why does a company prepare and provide financial statements?
Answer: To reduce uncertainty for investors regarding future
financial performance
◉ What is a balance sheet?
Answer: A financial statement that presents the financial position of
a company at a particular point in time.
◉ What are the three major categories of a balance sheet?
Answer: Assets, liabilities, and owners' equity.
,◉ What does the basic accounting equation state?
Answer: Assets = Liabilities + Owners' Equity.
◉ What is the separate entity concept?
Answer: The idea that the activities of the entity are to be separated
from those of the individual owner.
◉ What is another name for the balance sheet?
Answer: Statement of financial position.
◉ What is the value at which land purchased for $90,000 in 2010
appears on the books in 2013?
Answer: $90,000.
◉ What is the going concern concept?
Answer: The idea that businesses must be accounted for as though
they will exist at least for the foreseeable future.
◉ What distinguishes between current and long-term assets?
Answer: Classified balance sheet.
, ◉ What is an example of a long-term liability?
Answer: Mortgage payable.
◉ What is the monetary measurement principle?
Answer: The idea that transactions are recorded at their exchange
prices at the transaction date.
◉ What does the income statement describe?
Answer: A company's financial performance for a specified period of
time.
◉ What is the financial statement that summarizes revenues and
expenses for a specific period?
Answer: Income Statement.
◉ What is net income?
Answer: An overall measure of the performance of a business
entity's activities.
◉ Where do expense and revenue accounts appear?
Answer: Income statement.
◉ What increases from the sale of goods or services?
