Accounting Exam 1 Certification Exam
Test Questions and Answers Verified
Solutions Latest Update 2026/2027
Answer:
external users
●● financing activities
Answer:
transactions the company has with investors and creditors
●● investing activities
Answer:
transaction involving the purchase and sale of resources that are expected to benefit the company
for several years. (ex: company cars, general investments, etc.)
●● operating activities
Answer:
transactions that relate to the primary operations of the company. (ex: servers, restaurant
appearance, cooks, etc.)
●● The Accounting Equation (be able to recognize it & solve it)
Answer:
Assets = Liabilities (what I owe) + Stockholders' Equity (what's mine/what's leftover)
●● assets
Answer:
total resources of the company (what I OWN)
●● liabilities
Answer:
, amounts owed to creditors (what I OWE)
●● stockholders' equity
Answer:
owners' claims to resources (what's leftover/what's mine)
●● revenues
Answer:
The amounts recognized when the company sells products or provides services to customers (sales,
invoices, things that bring money in)
●● expenses
Answer:
The costs of providing products and services and other business activities during the current period
($$ spent)
●● net income
Answer:
the difference between revenues and expenses (earnings/profit)
●● dividends
Answer:
Cash payments to stockholders, these are not expenses.
●● income statement (be able to prepare one)
Answer:
reports the company's revenues and expenses. If revenues > expenses, then net income. If revenues
< expenses, then net loss.
●● statement of stockholder's equity
Answer:
stockholders' equity = common stock + retained earnings (accumulation of all profits + losses of
the company over time).
●● Balance Sheet (be able to prepare one)
Test Questions and Answers Verified
Solutions Latest Update 2026/2027
Answer:
external users
●● financing activities
Answer:
transactions the company has with investors and creditors
●● investing activities
Answer:
transaction involving the purchase and sale of resources that are expected to benefit the company
for several years. (ex: company cars, general investments, etc.)
●● operating activities
Answer:
transactions that relate to the primary operations of the company. (ex: servers, restaurant
appearance, cooks, etc.)
●● The Accounting Equation (be able to recognize it & solve it)
Answer:
Assets = Liabilities (what I owe) + Stockholders' Equity (what's mine/what's leftover)
●● assets
Answer:
total resources of the company (what I OWN)
●● liabilities
Answer:
, amounts owed to creditors (what I OWE)
●● stockholders' equity
Answer:
owners' claims to resources (what's leftover/what's mine)
●● revenues
Answer:
The amounts recognized when the company sells products or provides services to customers (sales,
invoices, things that bring money in)
●● expenses
Answer:
The costs of providing products and services and other business activities during the current period
($$ spent)
●● net income
Answer:
the difference between revenues and expenses (earnings/profit)
●● dividends
Answer:
Cash payments to stockholders, these are not expenses.
●● income statement (be able to prepare one)
Answer:
reports the company's revenues and expenses. If revenues > expenses, then net income. If revenues
< expenses, then net loss.
●● statement of stockholder's equity
Answer:
stockholders' equity = common stock + retained earnings (accumulation of all profits + losses of
the company over time).
●● Balance Sheet (be able to prepare one)
