Financial Accounting Exam 1 (SBU-Wagner) Questions And Answers

Financial Accounting Exam 1 (SBU-Wagner)
Questions And Answers

Financial accounting provides relevant and timely information for the decision-making

needs of users outside of the business, such as, investors, creditors, customers, and the

government.




General-purpose accounting financial statements are one type of financial accounting

report that is distributed to external users.




Ethics moral principles that guide the conduct of individuals.




Types of Businesses Service businesses: provide services rather than products to

customers.




Retail businesses sell products they purchase from other businesses to customers.




Manufacturing businesses change basic inputs into products that are sold to customers.

,Financial Accounting Exam 1 (SBU-Wagner)
Questions And Answers
Characteristics of Corporations Is organized under state or federal statutes as a separate

legal taxable entity.




+Generates 90% of business revenues.

+20% of the business organizations in the United States.

+Ownership is divided into shares called stock.

+Can obtain large amounts of resources by issuing stock.

+Used by large businesses.




*SELLS STOCK*




Authoritative Body for Accounting


(Who makes the rules?) GAAP


*FASB*

SEC

IASB




GAAP "generally accepted accounting principles"

, Financial Accounting Exam 1 (SBU-Wagner)
Questions And Answers
Principles US based on




accounting standards, principles, and assumptions that define how financial information will be

reported.




FASB "Financial Accounting Standards Board"


In US




has the primary responsibility for developing accounting standards.




SEC Securities and Exchange Commission


Agency of US gov.




has authority over the accounting and financial disclosures for companies whose shares of

ownership (stock) are traded and sold to the public.




IASB International Accounting Standards Board


outside US