ACC 210 Exam1 Questions with
Solutions
Accounting - Answer-a process of identifying, measuring, recording and reporting business activity in
monetary terms
Financial accounting - Answer-accounting information generated for individuals external to the business
organization
Managerial accounting - Answer-accounting information generated for individuals and groups within a
business organization
Tax accounting - Answer-accounting information generated for taxing authorities
Generally accepted accounting principles - Answer-rules and conventions that have been established
over time to enhance the relevance, reliability, comparability and consistency of the financial
information reported to external users
Financial Accounting Standards Board (FASB) - Answer-the current standard setting authority in the U.S.
, International Accounting Standards Board (IASB) - Answer-the major standard setting authority outside
of the U.S.
Securities and Exchange Commission (SEC) - Answer-the ultimate authority for financial reporting in the
U.S. for large business entities with publicly traded securities
Assets - Answer-economic resources that are expected to provide future economic benefits to the
business organization
Liabilities - Answer-probable future sacrifices of economic resources to non-owners of the organization
that are the result of past activities
Stockholder's equity - Answer-the owners' claim against the economic resources of the organization
after all liabilities have been covered
Balance sheet - Answer-reports economic resources (assets) of an organization along with those that
have claims (liabilities and stockholder's equity) against the economic resources at a specific point in
time
Income statement - Answer-shows the results of a business organization's operating activities for a
period of time
Net income (profit) - Answer-when a business organization receives more economic resources than it
expends
Net loss (loss) - Answer-when a business organization expends more economic resources than it
receives
Solutions
Accounting - Answer-a process of identifying, measuring, recording and reporting business activity in
monetary terms
Financial accounting - Answer-accounting information generated for individuals external to the business
organization
Managerial accounting - Answer-accounting information generated for individuals and groups within a
business organization
Tax accounting - Answer-accounting information generated for taxing authorities
Generally accepted accounting principles - Answer-rules and conventions that have been established
over time to enhance the relevance, reliability, comparability and consistency of the financial
information reported to external users
Financial Accounting Standards Board (FASB) - Answer-the current standard setting authority in the U.S.
, International Accounting Standards Board (IASB) - Answer-the major standard setting authority outside
of the U.S.
Securities and Exchange Commission (SEC) - Answer-the ultimate authority for financial reporting in the
U.S. for large business entities with publicly traded securities
Assets - Answer-economic resources that are expected to provide future economic benefits to the
business organization
Liabilities - Answer-probable future sacrifices of economic resources to non-owners of the organization
that are the result of past activities
Stockholder's equity - Answer-the owners' claim against the economic resources of the organization
after all liabilities have been covered
Balance sheet - Answer-reports economic resources (assets) of an organization along with those that
have claims (liabilities and stockholder's equity) against the economic resources at a specific point in
time
Income statement - Answer-shows the results of a business organization's operating activities for a
period of time
Net income (profit) - Answer-when a business organization receives more economic resources than it
expends
Net loss (loss) - Answer-when a business organization expends more economic resources than it
receives
