HBS Core Accounting Study Set- Questions &
Answers 100% Correct| Newest Update 2025
If a business is labeled as a going concern, is that business healthy or unhealthy? Why? -
✔✔Healthy. Going concern means its expected to remain in operation and satisfy all
commitments/obligations
Is deferred revenue an asset or liability? - ✔✔Liability
Deferred Revenue - Definition - ✔✔Liability that represents the obligation to provide
future goods/services
Conservatism - ✔✔For revenues and gains it means recording them when they are
reasonably certain but for expenses and losses it means recording them when they are
reasonably possible. For assets it means recording the lower valuation while for
liabilities it means recording the higher possible valuation.
Historical Cost Principle - ✔✔Transactions are recorded at the cost that existed when
the transaction occurred.
Valuating Assets under Historical Cost Principle - ✔✔Financial value of assets is
shown at historical cost, rather than current market value. Example - Land appreciation
Entity Concept - ✔✔A business is a separately identifiable entity. Therefore, accounts
of a business should be completely separate from those of owners of the business
Money Measurement Principle - ✔✔Only values that can be measured in monetary
terms should be recorded in financial accounting records. Intangible assets will not be
recorded
,Is brand recognition/brand equity recorded as an asset on financial statements? -
✔✔No - brand equity is an intangible asset
Categorize: Cash - ✔✔Asset
Categorize: Accounts Receivable - ✔✔Asset
Categorize: Notes Receivable - ✔✔Asset
Categorize: Interest Receivable - ✔✔Asset
Categorize: Inventory - ✔✔Asset
Categorize: Investments - ✔✔Asset
Categorize: Fixed Assets - ✔✔Asset
Categorize: Property, Plant & Equipment - ✔✔Asset
Categorize: Prepaid Insurance - ✔✔Asset
Categorize: Prepaid Rent - ✔✔Asset
Categorize: Other Prepaid Expenses - ✔✔Asset
, Categorize: Goodwill - ✔✔Asset
Categorize: Other Intangible Assets - ✔✔Asset
Categorize: Deferred Tax Asset - ✔✔Asset
Categorize: Accounts Payable - ✔✔Liability
Categorize: Interest Payable - ✔✔Liability
Categorize: Notes Payable - ✔✔Liability
Categorize: Wages Payable - ✔✔Liability
Categorize: Taxes Payable - ✔✔Liability
Categorize: Accrued Interest - ✔✔Liability
Categorize: Accrued Wages - ✔✔Liability
Categorize: Accrued Taxes - ✔✔Liability
Categorize: Deferred Revenue - ✔✔Liability
Answers 100% Correct| Newest Update 2025
If a business is labeled as a going concern, is that business healthy or unhealthy? Why? -
✔✔Healthy. Going concern means its expected to remain in operation and satisfy all
commitments/obligations
Is deferred revenue an asset or liability? - ✔✔Liability
Deferred Revenue - Definition - ✔✔Liability that represents the obligation to provide
future goods/services
Conservatism - ✔✔For revenues and gains it means recording them when they are
reasonably certain but for expenses and losses it means recording them when they are
reasonably possible. For assets it means recording the lower valuation while for
liabilities it means recording the higher possible valuation.
Historical Cost Principle - ✔✔Transactions are recorded at the cost that existed when
the transaction occurred.
Valuating Assets under Historical Cost Principle - ✔✔Financial value of assets is
shown at historical cost, rather than current market value. Example - Land appreciation
Entity Concept - ✔✔A business is a separately identifiable entity. Therefore, accounts
of a business should be completely separate from those of owners of the business
Money Measurement Principle - ✔✔Only values that can be measured in monetary
terms should be recorded in financial accounting records. Intangible assets will not be
recorded
,Is brand recognition/brand equity recorded as an asset on financial statements? -
✔✔No - brand equity is an intangible asset
Categorize: Cash - ✔✔Asset
Categorize: Accounts Receivable - ✔✔Asset
Categorize: Notes Receivable - ✔✔Asset
Categorize: Interest Receivable - ✔✔Asset
Categorize: Inventory - ✔✔Asset
Categorize: Investments - ✔✔Asset
Categorize: Fixed Assets - ✔✔Asset
Categorize: Property, Plant & Equipment - ✔✔Asset
Categorize: Prepaid Insurance - ✔✔Asset
Categorize: Prepaid Rent - ✔✔Asset
Categorize: Other Prepaid Expenses - ✔✔Asset
, Categorize: Goodwill - ✔✔Asset
Categorize: Other Intangible Assets - ✔✔Asset
Categorize: Deferred Tax Asset - ✔✔Asset
Categorize: Accounts Payable - ✔✔Liability
Categorize: Interest Payable - ✔✔Liability
Categorize: Notes Payable - ✔✔Liability
Categorize: Wages Payable - ✔✔Liability
Categorize: Taxes Payable - ✔✔Liability
Categorize: Accrued Interest - ✔✔Liability
Categorize: Accrued Wages - ✔✔Liability
Categorize: Accrued Taxes - ✔✔Liability
Categorize: Deferred Revenue - ✔✔Liability
