ACCOUNTING 101 FINAL EXAM E ACTUAL
QUESTIONS AND CORRECT ANSWERS
◉ revenues.
Answer: inflows of assets resulting from the sale of goods and
services
◉ expenses.
Answer: outflow of assets resulting from the sale of goods and
services
◉ internal user.
Answer: managerial accounting
◉ external user.
Answer: financial accounting
◉ who is responsible for GAAP.
Answer: FASB
◉ accounting equation.
Answer: assets = liabilities + owners equity
,◉ international accounting standards board (IFRS) is responsible
for.
Answer: developing a single set of worldwide accounting standards
◉ These standards will help companies to reduce accounting costs,
make it easier to acquire foreign companies, and facilitate
comparisons between foreign companies.
Answer: (IFRS) international accounting standards board
◉ primary objective of financial reporting.
Answer: provide economic information to permit users of the
information to make informed decisions
◉ what makes information relevant.
Answer: it must be able to make a difference in a decision
◉ assets are recorded at historical/original cost because.
Answer: it is objective and verifiable
◉ financial information should be understandable to whom.
Answer: those willing to spend the necessary time to understand it
, ◉ balance sheet.
Answer: lists assets, liabilities, and owner's equity
◉ income statement.
Answer: revenues minus expenses equal net income
◉ net income.
Answer: revenues - expenses
◉ order of statement preparation.
Answer: income statement, statement of retained earnings, balance
sheet and statement of cash flows
◉ account and types of accounts.
Answer: a record or statement of financial expenditure or receipts
relating to a particular period or purpose
real, personal, and nominal
◉ how transactions affect the accounting equation.
Answer: the balance is maintained because every business
transaction affects at least two of a company's accounts such as:
QUESTIONS AND CORRECT ANSWERS
◉ revenues.
Answer: inflows of assets resulting from the sale of goods and
services
◉ expenses.
Answer: outflow of assets resulting from the sale of goods and
services
◉ internal user.
Answer: managerial accounting
◉ external user.
Answer: financial accounting
◉ who is responsible for GAAP.
Answer: FASB
◉ accounting equation.
Answer: assets = liabilities + owners equity
,◉ international accounting standards board (IFRS) is responsible
for.
Answer: developing a single set of worldwide accounting standards
◉ These standards will help companies to reduce accounting costs,
make it easier to acquire foreign companies, and facilitate
comparisons between foreign companies.
Answer: (IFRS) international accounting standards board
◉ primary objective of financial reporting.
Answer: provide economic information to permit users of the
information to make informed decisions
◉ what makes information relevant.
Answer: it must be able to make a difference in a decision
◉ assets are recorded at historical/original cost because.
Answer: it is objective and verifiable
◉ financial information should be understandable to whom.
Answer: those willing to spend the necessary time to understand it
, ◉ balance sheet.
Answer: lists assets, liabilities, and owner's equity
◉ income statement.
Answer: revenues minus expenses equal net income
◉ net income.
Answer: revenues - expenses
◉ order of statement preparation.
Answer: income statement, statement of retained earnings, balance
sheet and statement of cash flows
◉ account and types of accounts.
Answer: a record or statement of financial expenditure or receipts
relating to a particular period or purpose
real, personal, and nominal
◉ how transactions affect the accounting equation.
Answer: the balance is maintained because every business
transaction affects at least two of a company's accounts such as:
