Accounting Competency
Exam – FAU 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
, Accounting equation Assets = Equities; or Assets = Liabilities + Stockholders' equity.
Accounts payable Amounts owed to suppliers for goods or services purchased on credit.
Accounts receivable Amounts due from customers for services already provided.
Assets Things of value owned by the business. Examples include cash, machines, and
buildings. To their owners, assets possess service potential or utility that can be
measured and expressed in money terms.
Separate Economic Entity Assumption that economic events associated with the business are separate from
the owners.
capital stock The title given to an equity account showing the investment in a business
corporation by its stockholders.
Corporation Business incorporated under the laws of one of the states and owned by a few
stockholders or by thousands of stockholders.
Cost Sacrifice made or the resources given up, measured in money terms, to acquire
some desired thing, such as a new truck (asset).
Dividend Payment (usually of cash) to the owners of a corporation; it is a distribution of
income to owners rather than an expense of doing business.
Entity A business unit that is deemed to have an existence separate and apart from its
owners, creditors, employees, customers, other interested parties, and other
businesses, and for which accounting records are maintained.
Equities Broadly speaking, all claims to, or interests in, assets; includes liabilities and
stockholders' equity.
Equity ratio A ratio found by dividing stockholders' equity by total equities (or total assets).
Exam – FAU 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
, Accounting equation Assets = Equities; or Assets = Liabilities + Stockholders' equity.
Accounts payable Amounts owed to suppliers for goods or services purchased on credit.
Accounts receivable Amounts due from customers for services already provided.
Assets Things of value owned by the business. Examples include cash, machines, and
buildings. To their owners, assets possess service potential or utility that can be
measured and expressed in money terms.
Separate Economic Entity Assumption that economic events associated with the business are separate from
the owners.
capital stock The title given to an equity account showing the investment in a business
corporation by its stockholders.
Corporation Business incorporated under the laws of one of the states and owned by a few
stockholders or by thousands of stockholders.
Cost Sacrifice made or the resources given up, measured in money terms, to acquire
some desired thing, such as a new truck (asset).
Dividend Payment (usually of cash) to the owners of a corporation; it is a distribution of
income to owners rather than an expense of doing business.
Entity A business unit that is deemed to have an existence separate and apart from its
owners, creditors, employees, customers, other interested parties, and other
businesses, and for which accounting records are maintained.
Equities Broadly speaking, all claims to, or interests in, assets; includes liabilities and
stockholders' equity.
Equity ratio A ratio found by dividing stockholders' equity by total equities (or total assets).
