Accounting Mod 1–5 2026 |
Study Guide, Practice
Questions, Answers,
Rationales & Exam Review
| Complete Ethics Study
Guide
Updated 2026 Questions and Answers
100% Verified Exam Prep and Comprehensive
Rationales
Included
, What is the main purpose of accounting? To provide useful information to decision makers.
Who are internal users of accounting information? Managers and other people inside the company; they primarily use managerial
accounting.
Who are external users of accounting information? Investors, creditors, lenders, regulators, and other people outside the company;
they primarily use financial accounting.
What are the three types of business activities on the Operating, investing, and financing activities.
statement of cash flows?
What are operating activities? Cash flows related to the company's normal day-to-day operations.
What are investing activities? Buying and selling long-term assets and investments.
What are financing activities? Activities involving raising or repaying capital, such as issuing stock or
borrowing/repaying debt.
What are the four basic financial statements? Income statement, statement of stockholders' equity, balance sheet, and statement
of cash flows.
What does the income statement report? Revenues, expenses, and the resulting net income or net loss for a period.
What does the balance sheet report? Assets, liabilities, and stockholders' equity at a specific point in time.
What does the statement of stockholders' equity report? Changes that explain how beginning stockholders' equity becomes ending
stockholders' equity during a period.
What does the statement of cash flows report? Cash inflows and outflows from operating, investing, and financing activities during
a period.
Study Guide, Practice
Questions, Answers,
Rationales & Exam Review
| Complete Ethics Study
Guide
Updated 2026 Questions and Answers
100% Verified Exam Prep and Comprehensive
Rationales
Included
, What is the main purpose of accounting? To provide useful information to decision makers.
Who are internal users of accounting information? Managers and other people inside the company; they primarily use managerial
accounting.
Who are external users of accounting information? Investors, creditors, lenders, regulators, and other people outside the company;
they primarily use financial accounting.
What are the three types of business activities on the Operating, investing, and financing activities.
statement of cash flows?
What are operating activities? Cash flows related to the company's normal day-to-day operations.
What are investing activities? Buying and selling long-term assets and investments.
What are financing activities? Activities involving raising or repaying capital, such as issuing stock or
borrowing/repaying debt.
What are the four basic financial statements? Income statement, statement of stockholders' equity, balance sheet, and statement
of cash flows.
What does the income statement report? Revenues, expenses, and the resulting net income or net loss for a period.
What does the balance sheet report? Assets, liabilities, and stockholders' equity at a specific point in time.
What does the statement of stockholders' equity report? Changes that explain how beginning stockholders' equity becomes ending
stockholders' equity during a period.
What does the statement of cash flows report? Cash inflows and outflows from operating, investing, and financing activities during
a period.
