WSP ACCOUNTING ACTUAL EXAM QUESTIONS
WITH ANSWERS VERIFIED 100% CORRECT|
What is accounting? - ✔✔Standard way of reporting a business' performance
Accounting Assumption #1 - ✔✔Accounting entity- The company is its own entity
seperate from its owners and therefore can report its health to the general public, pay
taxes, sue, etc
Accounting Assumption #2 - ✔✔The firm is a going concern- the firm should report
their financials like they will be going on indefinitely
Accounting Assumption #3 - ✔✔Measurement- Firm should report their financial
statements monetarily so things like customer loyalty and customer satisfaction aren't
reported
Accounting Assumption #4 - ✔✔Periodicity- Many companies are required to report
quarterly and annually
Accounting Principle #1 - ✔✔Companies should report company's resources at the
historical cost because it can be difficult to appraise value
Accounting Principle #2 - ✔✔Accrual accounting dictates when you recognize
revenue and expenses
Revenue recognition must be recorded when earned and measurable
Accounting Principle #3 - ✔✔Matching principle- costs associated with making a
product must be reported during the same time as the revenue generated from said
product
, Accounting Principle #4 - ✔✔Full disclosure- companies must reveal all relevant
economic information that they determine is relevant
Major accounting restraints #1 - ✔✔Estimates and judgements- certain measures
cant be performed accurately so companies should use conservative estimates
Major accounting restraints #2 - ✔✔Materiality- you have to present things that are
material- this is determined by the size of the firm.
I.e. a hundred thousand dollar loan wouldn't be reported by apple but would be by a
smaller company
Major accounting restraints #3 - ✔✔consistency- each company has to prepare
financial statements using a consistent set of assumptions and techniques
Major accounting restraints #4 - ✔✔Conservatism- financial statements should
always be reported with a downward bias meaning conservative estimates
10k - ✔✔Annual filing published at the end of the fiscal year that covers the
company's finances and business
when does a 10k have to be filed? - ✔✔Within 60-90 days of end of fiscal year
10Q - ✔✔quarterly filing that are less detailed
Why should you be skeptical of 10qs - ✔✔they are reviewed, but not audited by CPAs
WITH ANSWERS VERIFIED 100% CORRECT|
What is accounting? - ✔✔Standard way of reporting a business' performance
Accounting Assumption #1 - ✔✔Accounting entity- The company is its own entity
seperate from its owners and therefore can report its health to the general public, pay
taxes, sue, etc
Accounting Assumption #2 - ✔✔The firm is a going concern- the firm should report
their financials like they will be going on indefinitely
Accounting Assumption #3 - ✔✔Measurement- Firm should report their financial
statements monetarily so things like customer loyalty and customer satisfaction aren't
reported
Accounting Assumption #4 - ✔✔Periodicity- Many companies are required to report
quarterly and annually
Accounting Principle #1 - ✔✔Companies should report company's resources at the
historical cost because it can be difficult to appraise value
Accounting Principle #2 - ✔✔Accrual accounting dictates when you recognize
revenue and expenses
Revenue recognition must be recorded when earned and measurable
Accounting Principle #3 - ✔✔Matching principle- costs associated with making a
product must be reported during the same time as the revenue generated from said
product
, Accounting Principle #4 - ✔✔Full disclosure- companies must reveal all relevant
economic information that they determine is relevant
Major accounting restraints #1 - ✔✔Estimates and judgements- certain measures
cant be performed accurately so companies should use conservative estimates
Major accounting restraints #2 - ✔✔Materiality- you have to present things that are
material- this is determined by the size of the firm.
I.e. a hundred thousand dollar loan wouldn't be reported by apple but would be by a
smaller company
Major accounting restraints #3 - ✔✔consistency- each company has to prepare
financial statements using a consistent set of assumptions and techniques
Major accounting restraints #4 - ✔✔Conservatism- financial statements should
always be reported with a downward bias meaning conservative estimates
10k - ✔✔Annual filing published at the end of the fiscal year that covers the
company's finances and business
when does a 10k have to be filed? - ✔✔Within 60-90 days of end of fiscal year
10Q - ✔✔quarterly filing that are less detailed
Why should you be skeptical of 10qs - ✔✔they are reviewed, but not audited by CPAs
