LOMA 361 INTRO TO ACCOUNTING AND FINANCIAL REPORTING (MODULE 1) QUESTIONS WITH CORRECT ANSWERS 2025

LOMA 361: INTRO TO ACCOUNTING AND FINANCIAL
REPORTING (MODULE 1) QUESTIONS WITH
CORRECT ANSWERS 2025
_________________GisGaGsystemGorGsetGofGrulesGandGmethodsGforGcollecting,Gprocessing,Greporting,GandG
monitoringGfinancialGinfoGaboutGaGcompany.G-GCORRECTGANSWERG-Accounting



CloselyGrelatedGtoGaccountingGisG____________Greporting,GwhichGisGtheGprocessGofGpresentingGfinancialGin
foGaboutGaGcompany'sGfinancialGposition,GoperatingGperformance,GandGflowGofGfundsGintoGandGoutGofGaGco
mpany.G-GCORRECTGANSWERG-financial



TheGaccountingGfunctionGconsistsGofGprocessesGandGactivitiesGthatGhelpGanswerG5GkeyGbusinessGquestions:
G-GCORRECTGANSWERG-1)GWhatGdoesGtheGcompanyGown?



2)GWhatGdoesGtheGcompanyGowe?

3)GWhatGhasGtheGcompanyGretained?

4)GWhatGhasGtheGcompanyGearned?

5)GWhatGhasGtheGcompanyGspent?



AG__________GtransactionGisGaGtransactionGtoGwhichGaGcompanyGmustGassignGanGobjectiveGmonetaryGvalu
e,GwhetherGtheGimpactGonGtheGcompanyGisGlargeGorGsmall,GactualGorGexpected.G-GCORRECTGANSWERG-
business



_____________GisGaGcompany'sGabilityGtoGmeetGitsGfinancialGobligationsGwhenGtheyGbecomeGdue.G-
GCORRECTGANSWERG-Solvency




_______________GisGtheGoverallGdegreeGofGsuccessGaGcompanyGhasGinGgeneratingGpositiveGreturnsGforGitsG
owners,GincludingGtheGcompany'sGabilityGtoGgenerateGprofitsGandGincreaseGtheGvalueGofGtheGcompany.G-
GCORRECTGANSWERG-Profitability




InternalGusersGofGaGcompany'sGaccountingGinfoGincludeGtheGcompany'sG(listG3):G-GCORRECTGANSWERG-
1)Gemployees

2)Gdirectors

3)Gofficers

,AGcompany'sGinternalGusersGtypicallyGhaveGaG__________GfinancialGinterestGinGtheGcompany,GwhichGmean
sGtheyGcanGgainGorGloseGmoneyGasGaGresultGofGtheGcompany'sGfinancialGperformance.G-
GCORRECTGANSWERG-direct




_____________GusersGofGaGcompany'sGaccountingGinfoGareGpeopleGandGorganizationsGoutsideGtheGcompa
nyGwhoGuseGtheGcompany'sGfinancialGinfoGtoGmakeGvariousGdecisionsGaboutGtheGcompany.G-
GCORRECTGANSWERG-External




TrueGorGFalse:



ExternalGusersGcanGhaveGeitherGaGdirectGorGindirectGfinancialGinterestGinGtheGcompany'sGperformance.G-
GCORRECTGANSWERG-True




ExternalGusersGwhoGhaveGaGDIRECTGfinancialGinterestGinGanGinsurer'sGperformanceGincludeG(listG8):G-
GCORRECTGANSWERG-1)GIndividualGpolicyowners



2)GGroupGpolicyholders

3)GBenes

4)GInsureds

5)GStockholders

6)GAgents

7)GReinsurers

8)GCreditors



ExternalGusersGwhoGhaveGanG___________GfinancialGinterestGinGaGcompany'sGfinancialGinfoGareGgenerallyGs
eekingGaGcompany'sGfinancialGinfoGonGbehalfGofGothers.G-GCORRECTGANSWERG-indirect



Ex:GcompetingGcompanies,GexternalGauditors,GfederalGagencies,GstateGinsuranceGdepts,GindependentGratin
gGagencies,GtaxGauthorities

, __________GinsuranceGdeptsGplayGaGparticularlyGimportantGroleGasGexternalGusersGofGaGcompany'sGfinanci
alGinfo:GtheyGevaluateGtheGcompany'sGfinancialGinfoGtoGensureGthatGitGwillGbeGableGtoGpayGitsGbenefitGobliga
tions,GwhichGmayGariseGdecadesGintoGtheGfuture.G-GCORRECTGANSWERG-State



TrueGorGFalse:



SometimesGanGindividualGorGentityGisGbothGanGinternalGandGexternalGuserGofGanGinsurer'sGfinancialGinfo.G-
GCORRECTGANSWERG-True




Ex:GInsuranceGcompanyGemployeesGmayGalsoGbeGpolicyowners,Ginsureds,GorGstockholders.



AnGexternalGuserGofGanGinsurer'sGfinancialGinfoGmayGhaveGaGdirectGandGanGindirectGfinancialGinterestGtoGthe
Ginsurer.




AnGindependentGratingGagencyGhasGassignedGaGratingGtoGSundogGLifeGInsuranceGCompany.GThisGratingGage
ncyGisGanGexampleGofGanG(internal/external)GuserGofGSundog'sGfinancialGinfo,GandGtheGagencyGhasG(aGdirect
/anGindirect)GfinancialGinterestGinGSundog'sGperformance.G-GCORRECTGANSWERG-external

anGindirect



_____________GaccountingGisGtheGfieldGofGaccountingGthatGfocusesGprimarilyGonGreportingGaGcompany'sGfi
nancialGinfoGtoGmeetGtheGneedsGofGtheGcompany'sGexternalGusers.G-GCORRECTGANSWERG-Financial



FinancialG______________GareGsummaryGreportsGofGaGcompany'sGfinancialGconditionGonGaGspecifiedGdateG
orGofGitsGperformanceGduringGaGspecifiedGperiod.G-GCORRECTGANSWERG-statements



ListG4GcommonGfinancialGstatements:G-GCORRECTGANSWERG-1)GbalanceGsheet

2)GincomeGstatement

3)GcashGflowGstatement

4)GstatementGofGowners'Gequity



TrueGorGFalse: