ACC 200 EXAM 1 UPDATED ACTUAL QUESTIONS AND
CORRECT ANSWERS
Question:
1. accounting
Answer:
the process of identifying, measuring and communicating economic information
to permit informed judgements and decisions
-the language of business
Question:
2. basic accounting formula
Answer:
assets=liabilities + stockholders equity
Question:
3. stockholders equity
Answer:
contributed capital + retained earnings
-contributed capital: reported on balance sheet
-common stock, contributed capital, RE, treasury stock
Question:
4. retained earnings
Answer:
revenues- expenses- dividends
-reported on balance sheet and statement of RE
Question:
5. historic cost principle
Answer:
record initially the activities of a company at cost
-assets should be recorded and reported at the cost paid to acquire them
Question:
6. revenue recognition principle
Answer:
revenue should be recorded when a resource has been earned
, Question:
7. matching principle
Answer:
expenses should be recorded in the period resources are used to generate
revenue
Question:
8. conservatism principle
Answer:
avoids overstating assets or income in the preparation of financial statements
Question:
9. full disclosure principle
Answer:
reveal any info that makes a difference to financial statement users
Question:
10. economic entity assumption
Answer:
financial activities of a business should be accounted for separately from the
business's owners
Question:
11. monetary unit assumption
Answer:
organizations are to report their financial results and activities in monetary units
Question:
12. time period assumption
Answer:
divides the life of the organization into artificial time periods to report results over
short periods of time
Question:
13. going concern assumption (continuity)
Answer:
the company for which we are accounting will continue its operations into the
foreseeable future
CORRECT ANSWERS
Question:
1. accounting
Answer:
the process of identifying, measuring and communicating economic information
to permit informed judgements and decisions
-the language of business
Question:
2. basic accounting formula
Answer:
assets=liabilities + stockholders equity
Question:
3. stockholders equity
Answer:
contributed capital + retained earnings
-contributed capital: reported on balance sheet
-common stock, contributed capital, RE, treasury stock
Question:
4. retained earnings
Answer:
revenues- expenses- dividends
-reported on balance sheet and statement of RE
Question:
5. historic cost principle
Answer:
record initially the activities of a company at cost
-assets should be recorded and reported at the cost paid to acquire them
Question:
6. revenue recognition principle
Answer:
revenue should be recorded when a resource has been earned
, Question:
7. matching principle
Answer:
expenses should be recorded in the period resources are used to generate
revenue
Question:
8. conservatism principle
Answer:
avoids overstating assets or income in the preparation of financial statements
Question:
9. full disclosure principle
Answer:
reveal any info that makes a difference to financial statement users
Question:
10. economic entity assumption
Answer:
financial activities of a business should be accounted for separately from the
business's owners
Question:
11. monetary unit assumption
Answer:
organizations are to report their financial results and activities in monetary units
Question:
12. time period assumption
Answer:
divides the life of the organization into artificial time periods to report results over
short periods of time
Question:
13. going concern assumption (continuity)
Answer:
the company for which we are accounting will continue its operations into the
foreseeable future
