Financial accounting and accounting standards Verified Exam
Questions and Answers Latest update 2026/2027
Question:
Financial Accounting
Answer:
is the process that culminates in the preparation of financial reports on the enterprise for use by both
internal and external parties.
Question:
Managerial Accounting
Answer:
is the process of identifying, measuring, analyzing, and communicating financial information needed
by management
Question:
Financial Statements
Answer:
to plan, control, and evaluate a company's operations. (1) the balance sheet, (2) the income statement,
(3) the statement of cash flows, and (4) the statement of owners' or stockholders' equity.
Question:
Financial Reporting
Answer:
it includes the basic financial statements and any other means of communicating financial and
economic data to interested external parties.
Question:
Accounting equation assets=liabilities + equities
Answer:
Question:
Accounting principles board
Answer:
advance the written expression of accounting principles & determine appropriate practices, & narrow
the areas of difference and inconsistency in practice.`
, Question:
capital allocation process
Answer:
performance is measured accurately, fairly, and on a timely basis, the right managers and companies
are able to attract investment capital. If not then the opposite happens.
Question:
financial reporting objective
Answer:
to provide financial information about the reporting entity that is useful to present and potential equity
investors, lenders, and other creditors in decisions about providing resources to the entity through
equity investments and loans or other
Question:
Decision usefulness
Answer:
forms of credit. (1) ability to generate net cash inflows and (2) management's ability to protect and
enhance the capital providers' investments.
Question:
common set of standards
Answer:
applied by all businesses and entities provides financial statements which are reasonably comparable.
Without a common set of standards, each enterprise could, and would, develop its own theory
structure and set of practices, resulting in noncomparability among enterprises.
Question:
financial statements limitation
Answer:
needs of interested parties such as creditors, managers, owners, governmental agencies, and financial
analysts vary considerably, it is unlikely that one set of financial statements is equally appropriate for
these varied uses.
Question:
securities and exchange commission
Answer:
receives audited financial statements from nearly all companies that issue securities to the public or
are listed on the stock exchanges, it is greatly interested in the content, accuracy, and credibility of the
statements. assumed a more active role in the develop-ment of accounting standards, especially in the
area of disclosure requirements
Questions and Answers Latest update 2026/2027
Question:
Financial Accounting
Answer:
is the process that culminates in the preparation of financial reports on the enterprise for use by both
internal and external parties.
Question:
Managerial Accounting
Answer:
is the process of identifying, measuring, analyzing, and communicating financial information needed
by management
Question:
Financial Statements
Answer:
to plan, control, and evaluate a company's operations. (1) the balance sheet, (2) the income statement,
(3) the statement of cash flows, and (4) the statement of owners' or stockholders' equity.
Question:
Financial Reporting
Answer:
it includes the basic financial statements and any other means of communicating financial and
economic data to interested external parties.
Question:
Accounting equation assets=liabilities + equities
Answer:
Question:
Accounting principles board
Answer:
advance the written expression of accounting principles & determine appropriate practices, & narrow
the areas of difference and inconsistency in practice.`
, Question:
capital allocation process
Answer:
performance is measured accurately, fairly, and on a timely basis, the right managers and companies
are able to attract investment capital. If not then the opposite happens.
Question:
financial reporting objective
Answer:
to provide financial information about the reporting entity that is useful to present and potential equity
investors, lenders, and other creditors in decisions about providing resources to the entity through
equity investments and loans or other
Question:
Decision usefulness
Answer:
forms of credit. (1) ability to generate net cash inflows and (2) management's ability to protect and
enhance the capital providers' investments.
Question:
common set of standards
Answer:
applied by all businesses and entities provides financial statements which are reasonably comparable.
Without a common set of standards, each enterprise could, and would, develop its own theory
structure and set of practices, resulting in noncomparability among enterprises.
Question:
financial statements limitation
Answer:
needs of interested parties such as creditors, managers, owners, governmental agencies, and financial
analysts vary considerably, it is unlikely that one set of financial statements is equally appropriate for
these varied uses.
Question:
securities and exchange commission
Answer:
receives audited financial statements from nearly all companies that issue securities to the public or
are listed on the stock exchanges, it is greatly interested in the content, accuracy, and credibility of the
statements. assumed a more active role in the develop-ment of accounting standards, especially in the
area of disclosure requirements
