ACCOUNTING UPDATED ACTUAL QUESTIONS AND
CORRECT ANSWERS
Question:
1. Assets
Answer:
Things company owns & uses to generate revenue
Question:
2. Liabilities
Answer:
Amount that company owes
Question:
3. Equity
Answer:
Amount invested in company by owners; owners claim no assets
Question:
4. Accounting equation
Answer:
Assets = liabilities + equity
Question:
5. Truism in business
Answer:
Company never receives greater than it gives & never gives greater than it
receives
Question:
6. 4 Rules of debits & credits
Answer:
1. Debit amount received; credit amount given up
2. Debuts on left; credits on the right
3. In each transactions; list debits first (good) & credits last (bad)
4. Total debits = total credits
, Question:
7. Making an ethical decision
Answer:
1. Identify ethical concerns- use personal ethics to recognize concern
2. Analyze options- consider all good & bad consequences
3. Make ethical decision- choose best option given circumstances
Question:
8. Fraud
Answer:
Intentional manipulation- focus on prevention. Once fraud is committed, loses are
rarely retrieved.
Question:
9. Fraud Triangle
Answer:
Opportunity (low risk of being caught), Financial Pressure (incentive),
Rationalization (making situation justifiable)
Question:
10. GAAP (generally accepted accounting principles)
Answer:
Financial accounting is governed by concepts & rules.
1. Relevant info affects decision of user
2. Reliable info trusted by users
3. Comparable info aids in contrasting organizations
Question:
11. SEC- Securities and Exchange Commission
Answer:
Federal agency congress has charged to set reporting rules for org that sell
ownership shares to public
Question:
12. FASB (Financial Accounting Standards Board)
Answer:
Independent group of full-time members responsible for setting accounting rules
CORRECT ANSWERS
Question:
1. Assets
Answer:
Things company owns & uses to generate revenue
Question:
2. Liabilities
Answer:
Amount that company owes
Question:
3. Equity
Answer:
Amount invested in company by owners; owners claim no assets
Question:
4. Accounting equation
Answer:
Assets = liabilities + equity
Question:
5. Truism in business
Answer:
Company never receives greater than it gives & never gives greater than it
receives
Question:
6. 4 Rules of debits & credits
Answer:
1. Debit amount received; credit amount given up
2. Debuts on left; credits on the right
3. In each transactions; list debits first (good) & credits last (bad)
4. Total debits = total credits
, Question:
7. Making an ethical decision
Answer:
1. Identify ethical concerns- use personal ethics to recognize concern
2. Analyze options- consider all good & bad consequences
3. Make ethical decision- choose best option given circumstances
Question:
8. Fraud
Answer:
Intentional manipulation- focus on prevention. Once fraud is committed, loses are
rarely retrieved.
Question:
9. Fraud Triangle
Answer:
Opportunity (low risk of being caught), Financial Pressure (incentive),
Rationalization (making situation justifiable)
Question:
10. GAAP (generally accepted accounting principles)
Answer:
Financial accounting is governed by concepts & rules.
1. Relevant info affects decision of user
2. Reliable info trusted by users
3. Comparable info aids in contrasting organizations
Question:
11. SEC- Securities and Exchange Commission
Answer:
Federal agency congress has charged to set reporting rules for org that sell
ownership shares to public
Question:
12. FASB (Financial Accounting Standards Board)
Answer:
Independent group of full-time members responsible for setting accounting rules
