Accounting 2301 UTA Exam 1 Questions and Answers 100% Pass

Accounting 2301 UTA Exam 1 Questions and Answers 100% Pass Why is accounting important? - Information system that measures business activities, processes the information into reports, and communicates the results to decision makers. Language of Business. Accounting Model - Start with economic activities (are reviewed), create useful information (good decisions) Managerial Accounting - Focuses on information for internal decision makers. Ex. Company Managers and Employees Financial Acounting - Provides information for external decision makers Ex. Outside investors, Lenders, Customers, Federal Government Businesses - Set goals, measure progress, make adjustment Investors - Outside investors, provide money to get business going Creditor - Any person or business to whom a business owes money 2100% Pass Guarantee Sophia Bennett, All Rights Reserved © 2025 Certified Public Accountant (CPA) - Licensed professional accountants who serve the general public. Certified Management Accountant (CMA) - Certified professionals who specialize in accounting and financial management knowledge. They typically work for a single company. Financial Accounting Standards Board (FASB) - Privately funded organization, oversees the creation and governance of accounting standards Security and Exchange Commission (SEC) - U.S. governmental agency that oversees the U.S. financial markets. FASB and SEC - Work Together Generally Accepted Accounting Principles (GAAP) - Accounting guidelines, formulated by the FASB, the main U.S accounting rulebook Economic Entity Assumption - Organization that stands apart as a separate economic unit Sole Proprietorship - A business owned by one person Partnership - A business with two or more owners and not organized as a corporation Corporation - A business organized under state law that is a separate legal entity. 3100% Pass Guarantee Sophia Bennett, All Rights Reserved © 2025 Limited Liability Company (LLC) - A company in which each member is only liable for his or her own actions. Stockholders - A person who owns stock in a corporation Cost Principle - States that acquired assets and services should be recorded at their actual cost Going Concern Assumption - Assumes that the entity will remain in operation for the foreseeable future. Monetary Unit Assumption - Accountants assume that the dollar is the most effective means to communicate economic activity, its most stable. International Financial Reporting Standards (IFRS) - Accounting standards, issued by the IASB, that have been adopted by many countries outside of the United States. Accounting Equation - Assets = Liabilities + Equity Assets - Economic resources, expected to benefit business in future Ex. Cash, Furniture, Land, Office Supplies Liabilities - Debts owed to creditors, have the word payable in title Ex. Accounts payable Accounts Payable - A short-term liability that will be paid in the future. 4100% Pass Guarantee Sophia Bennett, All Rights Reserved © 2025 Equity (Stockholders' Equity) - Owner's claims to the assets of the business Increase in Equity Contributed Capital & Revenues Decrease in Equity Dividend & Expenses Contributed Capital - Owner contributions to a corporation Revenues - Sales of goods and services, must exceed expenses Dividens - Earnings distributed to stockholders Expenses - The costs of operating a business Common Stock - The basic form of ownership in a corpo