ACCT 200 EXAM 1 STUDY GUIDE UPDATED ACTUAL
QUESTIONS AND CORRECT ANSWERS
Question:
1. What is accounting?
Answer:
The information system that identifies, records, and communicates the economic
events of an organization to interested users.
Question:
2. Who uses accounting data?
Answer:
Internal and External users use accounting data.
Internal users such as managers company officers, production supervisors, and
finance directors.
External users such as investors, creditors, regulators, and others outside the
entity who want financial information about the company.
For this class we focus on external users
Question:
3. What are the objectives of financial accounting?
Answer:
To provide financial information about an entity that is useful to present and
potential investors, creditors, and other users in decisions about providing
resources to the entity.
(Look at pg. 18 in course packet for notes)
Question:
4. Who are accountants?
Answer:
Accountants are trusted business advisors who understand the "language of
business." They add value to every organization and are involved in key decisions
within a business.
Question:
5. What are the three basic activities accounting consists
of?
Answer:
Accounting consists of Identifying, Recording, and Communicating.
Communicating is the most important
, Question:
6. What are business entities?
Answer:
Sole Proprietorships: Joe's Pizza Shop, Dave's Used Cars
Partnerships: Smith, Kline and Barney
Corporations: Apple, Target, Ford
Question:
7. What are non-business entities?
Answer:
Government: Federal, state and local
Charities: The United Way
Education: The University of Kansas
Other not-for-profit organizations: Churches, Big Brothers Big Sisters
Question:
8. What are the rules?
Answer:
GAAP: Generally Accepted Accounting Principles- Generally accepted and
practiced standards about how to measure and report economic events in the
U.S.
IFRS: International Financial Reporting Standards- International accounting
standards.
The U.S. uses GAAP
Question:
9. Who makes and enforces the rules?
Answer:
FASB: Financial Accounting Standards Board- Primary standard setter in the U.S.
(FASB makes the rules)
SEC: Securities and Exchange Commission- U.S. governmental agency overseeing
the U.S. markets and standard setters.
(SEC enforces the rules)
IASB: International Accounting Standards Board- International standard setter.
Question:
10. What is historical cost?
Answer:
Financial elements are measured based on their cost.
It's what you actually paid for in transaction.
QUESTIONS AND CORRECT ANSWERS
Question:
1. What is accounting?
Answer:
The information system that identifies, records, and communicates the economic
events of an organization to interested users.
Question:
2. Who uses accounting data?
Answer:
Internal and External users use accounting data.
Internal users such as managers company officers, production supervisors, and
finance directors.
External users such as investors, creditors, regulators, and others outside the
entity who want financial information about the company.
For this class we focus on external users
Question:
3. What are the objectives of financial accounting?
Answer:
To provide financial information about an entity that is useful to present and
potential investors, creditors, and other users in decisions about providing
resources to the entity.
(Look at pg. 18 in course packet for notes)
Question:
4. Who are accountants?
Answer:
Accountants are trusted business advisors who understand the "language of
business." They add value to every organization and are involved in key decisions
within a business.
Question:
5. What are the three basic activities accounting consists
of?
Answer:
Accounting consists of Identifying, Recording, and Communicating.
Communicating is the most important
, Question:
6. What are business entities?
Answer:
Sole Proprietorships: Joe's Pizza Shop, Dave's Used Cars
Partnerships: Smith, Kline and Barney
Corporations: Apple, Target, Ford
Question:
7. What are non-business entities?
Answer:
Government: Federal, state and local
Charities: The United Way
Education: The University of Kansas
Other not-for-profit organizations: Churches, Big Brothers Big Sisters
Question:
8. What are the rules?
Answer:
GAAP: Generally Accepted Accounting Principles- Generally accepted and
practiced standards about how to measure and report economic events in the
U.S.
IFRS: International Financial Reporting Standards- International accounting
standards.
The U.S. uses GAAP
Question:
9. Who makes and enforces the rules?
Answer:
FASB: Financial Accounting Standards Board- Primary standard setter in the U.S.
(FASB makes the rules)
SEC: Securities and Exchange Commission- U.S. governmental agency overseeing
the U.S. markets and standard setters.
(SEC enforces the rules)
IASB: International Accounting Standards Board- International standard setter.
Question:
10. What is historical cost?
Answer:
Financial elements are measured based on their cost.
It's what you actually paid for in transaction.
