ACCOUNTING PRINCIPLES 15TH EDITION
COMPLETE TEST QUESTIONS AND ANSWERS
◉ Common stock.
Answer: Corporation's basic ownership share (capital stock)
◉ Conceptual framework.
Answer: The basic concepts that underlie the preparation and
presentation of financial statements for external users.
◉ Corporation.
Answer: Business that is a separate legal entity under state or
federal laws with owners called shareholders or stockholders.
◉ Cost-benefit constraint.
Answer: The notion that the benefit of a disclosure exceeds the cost
of that disclosure.
◉ Cost principle.
Answer: Prescribes financial statement information to be based on
actual costs incurred in business transactions.
, ◉ Consumer Protection Act.
Answer: Congressional act to promote accountability and
transparency in the financial system, to end the notion of too big to
fail to protect the taxpayer by ending bailouts, and to protect
consumers from abusive financial services.
◉ Equity.
Answer: Owner's claim on the assets of a business (net assets)
◉ Events.
Answer: Happenings that both affect an organization's financial
position and can be reliably measured.
◉ Expanded accounting equation.
Answer: Noncorperation: Equity = Owner's capital − Owner's
withdrawals + Revenues − Expenses.
Corporation: Equity = Contributed capital + Retained earnings +
Revenues − Expenses − Dividends.
◉ Expense recognition principle or matching principle.
Answer: Prescribes expenses to be reported in the same period as
the revenues that were earned as a result of the expenses.
◉ Expenses.
COMPLETE TEST QUESTIONS AND ANSWERS
◉ Common stock.
Answer: Corporation's basic ownership share (capital stock)
◉ Conceptual framework.
Answer: The basic concepts that underlie the preparation and
presentation of financial statements for external users.
◉ Corporation.
Answer: Business that is a separate legal entity under state or
federal laws with owners called shareholders or stockholders.
◉ Cost-benefit constraint.
Answer: The notion that the benefit of a disclosure exceeds the cost
of that disclosure.
◉ Cost principle.
Answer: Prescribes financial statement information to be based on
actual costs incurred in business transactions.
, ◉ Consumer Protection Act.
Answer: Congressional act to promote accountability and
transparency in the financial system, to end the notion of too big to
fail to protect the taxpayer by ending bailouts, and to protect
consumers from abusive financial services.
◉ Equity.
Answer: Owner's claim on the assets of a business (net assets)
◉ Events.
Answer: Happenings that both affect an organization's financial
position and can be reliably measured.
◉ Expanded accounting equation.
Answer: Noncorperation: Equity = Owner's capital − Owner's
withdrawals + Revenues − Expenses.
Corporation: Equity = Contributed capital + Retained earnings +
Revenues − Expenses − Dividends.
◉ Expense recognition principle or matching principle.
Answer: Prescribes expenses to be reported in the same period as
the revenues that were earned as a result of the expenses.
◉ Expenses.
