Fundamental Financial Accounting final exam Question with correct Answers

Fundamental Financial Accounting 2024- 2025 final exam Question with correct Answers Labor Resources Include both intellectual and physical efforts of individuals used in the process of providing goods and services to customers. Users Individuals or organizations that use financial information for decision making Financial Accounting Branch of accounting focused on the business information needs of external users (creditors, investors, governmental agencies, financial analysis, etc.); its objective is to classify and record business events and transactions to produce external financial reports (income statement, balance sheet, statement of cash flows, and statement of changes in equity) Managerial Accounting Branch of accounting focused on the information needs of managers and others working within the business; its objective is to gather and report information that adds value to the business. Managerial accounting information is not regulated or reported to the public. Not-for-profit entities (Nonprofit) Organizations established primarily for motives other than making a profit, such as providing goods and services for the social good. Examples include statesupported universities and colleges, hospitals, public libraries, and public charities. FASB (Financial Accounting Standards Board) Private, independent standard setting body established by the accounting profession that has been delegated the authority by the SEC to establish most of the accounting rules and regulations for public financial reporting. Generally Accepted Accounting Principles (GAAP) Rules and practices that accountants agree to follow in financial reports prepared for public distribution. Reporting Entities Businesses or other organizations for which financial statements are prepared. Liabilities Obligations of a business to relinquish assets, provide services, or accept other obligations Stockholders Owners of a corporation Common stock Basic class of corporate stock that has no preferential claim on assets or dividends Stockholders' equity The interest in a corporation's assets that is owned by the stockholders Retained earnings Portion of stockholders equity that includes all earnings retained in the business since inception Claims Owners and creditors interest in a business's assets Accounting Equation An equation showing the relationship among assets, liabilities, and owner's equity Going Concern The accounting assumption that a business is expected to operate indefinitely. Accounting Event Economic occurrence that changes a company's assets, liabilities, or equity. Transaction Business event that involve transferring something of value between two entities Asset Source Transaction A transaction that increases both an asset and a claim on assets; the three types of asset source transactions are acquisitions from owners (equity), borrowing from creditors (liabilities), or earnings from operations (reven