FINANCIAL ACCOUNTING SIXTH 2026
COMPREHENSIVE ASSESSMENT SCRIPT
SOLVED QUESTIONS ANSWERS UPDATED
REVIEW SET
◉ sec
Answer: Securities and Exchange Commission
regulates us stock exchange. provides investors with full and fair
information about publicly traded companies.
legal punishment
◉ iasb
Answer: International Accounting Standards Board
develop international accounting standards. made up of members
from many countries
◉ aicpa
Answer: american institute of certified public accountants
administers the cpa exam.
enforces professional sanction by taking away cpa license when
acted unethically.
,◉ role and purpose of accounting
Answer: accumulate and report on financial information about
performance, financial position, cash flow of a business. used to
reach decisions about how to manage the business, invest in it, or
lend money to it
◉ what is a balance sheet
Answer: statement of what they have and how they financed it at a
specific point in time.
◉ balance sheet equation
Answer: assets = liabilities + owners equity
◉ what are assets and examples
Answer: what they own or control that will provide probable future
benefits
cash, accts receivable, inventory, buildings, land.
◉ what are liabilities and examples
Answer: what we owe. obligations that require future sacrifice.
phone bill, car loan, accts payable, fed and state govt tax, mortgage,
unearned revenue
,◉ what is owners equity and examples
Answer: owners share, stockholders equity, how much owner
originally invested in business + how much profit they have left
capital stock- amt given by shareholders to obtain shares of
stock(capital=$ so money from stocks)
retained earnings- earnings retained in business, ex= net income
◉ do dividends increase or decrease owners equity
Answer: decrease
◉ does investments by owners increase or decrease owners equity
Answer: increase
◉ what is an income stmt
Answer: analyzes economic performance for a specific period of
time. statement of income. revenues, expenses, liabilities.
◉ equation for net income
Answer: net income= revenues - expenses
◉ does revenues increase or decrease net assets
Answer: increase
, ◉ does expenses increase or decrease net assets
Answer: decrease
◉ what is revenue
Answer: amount of assets created from sale.
products, membership, software, hardware, etc
◉ what are expenses
Answer: amount of assets consumed in generating revenues.
wages, utilities, wholesale cost
◉ if revenue exceeds expenses what happens
Answer: you get net income
◉ if revenue is less than expenses paid, what happens
Answer: net loss
◉ how to find net income or net loss
Answer: revenue- expenses= if + net income, if - net loss
◉ gross profit and loss
COMPREHENSIVE ASSESSMENT SCRIPT
SOLVED QUESTIONS ANSWERS UPDATED
REVIEW SET
◉ sec
Answer: Securities and Exchange Commission
regulates us stock exchange. provides investors with full and fair
information about publicly traded companies.
legal punishment
◉ iasb
Answer: International Accounting Standards Board
develop international accounting standards. made up of members
from many countries
◉ aicpa
Answer: american institute of certified public accountants
administers the cpa exam.
enforces professional sanction by taking away cpa license when
acted unethically.
,◉ role and purpose of accounting
Answer: accumulate and report on financial information about
performance, financial position, cash flow of a business. used to
reach decisions about how to manage the business, invest in it, or
lend money to it
◉ what is a balance sheet
Answer: statement of what they have and how they financed it at a
specific point in time.
◉ balance sheet equation
Answer: assets = liabilities + owners equity
◉ what are assets and examples
Answer: what they own or control that will provide probable future
benefits
cash, accts receivable, inventory, buildings, land.
◉ what are liabilities and examples
Answer: what we owe. obligations that require future sacrifice.
phone bill, car loan, accts payable, fed and state govt tax, mortgage,
unearned revenue
,◉ what is owners equity and examples
Answer: owners share, stockholders equity, how much owner
originally invested in business + how much profit they have left
capital stock- amt given by shareholders to obtain shares of
stock(capital=$ so money from stocks)
retained earnings- earnings retained in business, ex= net income
◉ do dividends increase or decrease owners equity
Answer: decrease
◉ does investments by owners increase or decrease owners equity
Answer: increase
◉ what is an income stmt
Answer: analyzes economic performance for a specific period of
time. statement of income. revenues, expenses, liabilities.
◉ equation for net income
Answer: net income= revenues - expenses
◉ does revenues increase or decrease net assets
Answer: increase
, ◉ does expenses increase or decrease net assets
Answer: decrease
◉ what is revenue
Answer: amount of assets created from sale.
products, membership, software, hardware, etc
◉ what are expenses
Answer: amount of assets consumed in generating revenues.
wages, utilities, wholesale cost
◉ if revenue exceeds expenses what happens
Answer: you get net income
◉ if revenue is less than expenses paid, what happens
Answer: net loss
◉ how to find net income or net loss
Answer: revenue- expenses= if + net income, if - net loss
◉ gross profit and loss
