FINANCIAL AND MANAGERIAL ACCOUNTING
FOR MBAS FINAL PAPER SOLVED QUESTIONS
WITH COMPLETE ANSWERS
◉ Financial Accounting.
Answer: Accounting information provided to external users (e.g.
investors and creditors)
◉ 2 Functions of Financial Accounting.
Answer: 1. Measure business activities of a company
2. Communicate those measurements to external parties for
decision-making purposes
◉ What roles does accounting play in society.
Answer: Measuring economic activity and communicating useful
information to help investors and creditors make good decisions
◉ What are the three types of business structures.
Answer: 1. Corporation
2. Sole Proprietorship
3. Partnership
,◉ Corporation.
Answer: a company that is legally separate from its owner
◉ What is the advantage of being a corporation.
Answer: Stockholders have limited liability
◉ Sole Proprietorship.
Answer: A business owned by one person
◉ Partnership.
Answer: a business owned by two or more people
◉ What is the disadvantage of a sole proprietorship or partnership.
Answer: neither offer limited liability
◉ 3 types of Business Activities.
Answer: 1. Financing Activities
2. Investing Activities
3. Operating Activities
◉ Financing Activities.
Answer: Transactions the company has with investors and Creditors
, ◉ Investing Activities.
Answer: transactions involving the purchase and sale of resources
that provide benefit for several years
◉ Operating Activities.
Answer: transactions that relate to the primary operations of the
company
◉ The Accounting Equation.
Answer: Assets = Liabilities + Stockholders' Equity
◉ Revenues.
Answer: The amounts recognized when the company sells products
or provides services to customers
◉ Expenses.
Answer: costs of providing products and services and other business
activities during the current period
◉ Net Income.
Answer: The difference between revenues and expenses, also known
as earnings or profit. Revenues - Expenses
FOR MBAS FINAL PAPER SOLVED QUESTIONS
WITH COMPLETE ANSWERS
◉ Financial Accounting.
Answer: Accounting information provided to external users (e.g.
investors and creditors)
◉ 2 Functions of Financial Accounting.
Answer: 1. Measure business activities of a company
2. Communicate those measurements to external parties for
decision-making purposes
◉ What roles does accounting play in society.
Answer: Measuring economic activity and communicating useful
information to help investors and creditors make good decisions
◉ What are the three types of business structures.
Answer: 1. Corporation
2. Sole Proprietorship
3. Partnership
,◉ Corporation.
Answer: a company that is legally separate from its owner
◉ What is the advantage of being a corporation.
Answer: Stockholders have limited liability
◉ Sole Proprietorship.
Answer: A business owned by one person
◉ Partnership.
Answer: a business owned by two or more people
◉ What is the disadvantage of a sole proprietorship or partnership.
Answer: neither offer limited liability
◉ 3 types of Business Activities.
Answer: 1. Financing Activities
2. Investing Activities
3. Operating Activities
◉ Financing Activities.
Answer: Transactions the company has with investors and Creditors
, ◉ Investing Activities.
Answer: transactions involving the purchase and sale of resources
that provide benefit for several years
◉ Operating Activities.
Answer: transactions that relate to the primary operations of the
company
◉ The Accounting Equation.
Answer: Assets = Liabilities + Stockholders' Equity
◉ Revenues.
Answer: The amounts recognized when the company sells products
or provides services to customers
◉ Expenses.
Answer: costs of providing products and services and other business
activities during the current period
◉ Net Income.
Answer: The difference between revenues and expenses, also known
as earnings or profit. Revenues - Expenses
