ACC 1O1/102/202
ACC/FIN/110.
Accounting
CPA 2026/2027 BUSINESS
, Accounting 101: Chapters 1-5
Key Concepts and Principles
Exam questions with correct
answers 2026/2027 Edition
Graded A+
What is the primary objective of a business?
To earn a profit.
Define profit in a business context.
The difference between amounts received from customers for goods
and services and the amounts paid for the inputs to provide those
goods and services.
What is the formula for calculating net income?
Revenues - expenses = net income/profit.
What happens when expenses exceed revenues?
A net loss occurs.
Name the three types of business activities.
Operating activities, investing activities, and financing activities.
What are operating activities?
, Activities by which the company generates revenues from customers.
What are investing activities?
Activities by which the company acquires long-term assets for use in
its operations.
What are financing activities?
Activities by which the company obtains funds to start and operate
the business.
What is accounting?
An information system that collects financial information and provides
reports about the economic activities and condition of a business.
Who are internal users of accounting information?
Employees and managers who run the company.
What is managerial accounting?
Accounting used for sensitive information and performance reports
within the company.
Who are external users of accounting information?
Creditors, investors, suppliers, customers, and government entities
not involved in managing the business.
What are general purpose financial statements?
Reports prepared by financial accounting for external users.
What is the Sarbanes-Oxley Act (SOX)?
Legislation established to monitor the behavior of accounting and
business practices.
ACC/FIN/110.
Accounting
CPA 2026/2027 BUSINESS
, Accounting 101: Chapters 1-5
Key Concepts and Principles
Exam questions with correct
answers 2026/2027 Edition
Graded A+
What is the primary objective of a business?
To earn a profit.
Define profit in a business context.
The difference between amounts received from customers for goods
and services and the amounts paid for the inputs to provide those
goods and services.
What is the formula for calculating net income?
Revenues - expenses = net income/profit.
What happens when expenses exceed revenues?
A net loss occurs.
Name the three types of business activities.
Operating activities, investing activities, and financing activities.
What are operating activities?
, Activities by which the company generates revenues from customers.
What are investing activities?
Activities by which the company acquires long-term assets for use in
its operations.
What are financing activities?
Activities by which the company obtains funds to start and operate
the business.
What is accounting?
An information system that collects financial information and provides
reports about the economic activities and condition of a business.
Who are internal users of accounting information?
Employees and managers who run the company.
What is managerial accounting?
Accounting used for sensitive information and performance reports
within the company.
Who are external users of accounting information?
Creditors, investors, suppliers, customers, and government entities
not involved in managing the business.
What are general purpose financial statements?
Reports prepared by financial accounting for external users.
What is the Sarbanes-Oxley Act (SOX)?
Legislation established to monitor the behavior of accounting and
business practices.
