D196 Principles of Financial and Managerial
Accounting UPDATED ACTUAL Exam
Questions and CORRECT Answers
accounting system - CORRECT ANSWER - The procedures and processes used by a
business to analyze transactions, handle routine bookkeeping tasks, and structure information so
it can be used to evaluate the performance and health of the business.
accounting - CORRECT ANSWER - A system for providing quantitative, financial
information about economic entities that is useful for making sound economic decisions. It
provides the means of recording and communicating business activities and the results of those
activities.
business - CORRECT ANSWER - An organization operated with the objective of making
a profit from the sale of goods or services.
nonprofit organization - CORRECT ANSWER - An entity without a profit objective,
oriented toward providing services efficiently and effectively.
revenues - CORRECT ANSWER - The amount of assets created through the sale of goods
and services.
accounting cycle - CORRECT ANSWER - The procedure for analyzing, recording,
classifying, summarizing, and reporting the transactions of a business.
management accounting - CORRECT ANSWER - The area of accounting concerned with
providing internal financial reports to assist management in making decisions.
annual report - CORRECT ANSWER - A document that summarizes the results of
operations and financial status of a company for the past year and outlines future plans.
,internal revenue service (IRS) - CORRECT ANSWER - A government agency that
prescribes the rules and regulations that govern the collection of tax revenues in the United
States
financial statements - CORRECT ANSWER - Reports such as the balance sheet, income
statement, and statement of cash flows, which summarize the financial status and results of
operations of a business entity
financial accounting - CORRECT ANSWER - The area of accounting concerned with
reporting financial information to interested external parties
assets - CORRECT ANSWER - Economic resources that are owned or controlled by a
company
liabilities - CORRECT ANSWER - Obligations to pay cash, transfer other assets, or
provide services to someone else
owner's equity - CORRECT ANSWER - The remaining claim against the assets of a
business after the liabilities have been deducted
financial accounting standards board (FASB) - CORRECT ANSWER - The organization
responsible for studying accounting issues and establishing accounting standards to govern
financial reporting in the United States
generally accepted accounting principles (GAAP) - CORRECT ANSWER - Authoritative
guidelines that define accounting practice at a particular time in the United States
governmental accounting standards board (GASB) - CORRECT ANSWER - An
independent private organization that sets the accounting and financial reporting standards for
state and local governments following GAAP
, securities and exchange commission (SEC) - CORRECT ANSWER - The government
body responsible for regulating the financial reporting practices of most publicly owned
corporations in connection with the buying and selling of stocks and bonds.
certified public accountant (CPA) - CORRECT ANSWER - An accountant who has met
specified professional requirements established by the AICPA and local and state societies. a key
service provided by CPAs is the performance of independent audits of financial statements.
American institute of certified public accountants (AICPA) - CORRECT ANSWER -A
Professional organization of CPAs in which membership is voluntary
international accounting standards board (IASB) - CORRECT ANSWER - A committee
formed to develop worldwide accounting standards.
ethics - CORRECT ANSWER - The basic moral principles that govern an individual's
behavior
business documents - CORRECT ANSWER - Records of transactions used as the basis for
recording accounting entries; include invoices, check stubs, receipts, and similar business papers.
transaction - CORRECT ANSWER - Two parties exchanging something of value
internal transaction - CORRECT ANSWER - A transaction that occurs within a company,
does not involve an external party, and is not recorded in the company's financial records.
external transaction - CORRECT ANSWER - An exchange that occurs between a
company and an external party and that is recorded in the financial records of the company
arm's length transaction - CORRECT ANSWER - A transaction in which a buyer and seller
act independently to get the best possible deal
Accounting UPDATED ACTUAL Exam
Questions and CORRECT Answers
accounting system - CORRECT ANSWER - The procedures and processes used by a
business to analyze transactions, handle routine bookkeeping tasks, and structure information so
it can be used to evaluate the performance and health of the business.
accounting - CORRECT ANSWER - A system for providing quantitative, financial
information about economic entities that is useful for making sound economic decisions. It
provides the means of recording and communicating business activities and the results of those
activities.
business - CORRECT ANSWER - An organization operated with the objective of making
a profit from the sale of goods or services.
nonprofit organization - CORRECT ANSWER - An entity without a profit objective,
oriented toward providing services efficiently and effectively.
revenues - CORRECT ANSWER - The amount of assets created through the sale of goods
and services.
accounting cycle - CORRECT ANSWER - The procedure for analyzing, recording,
classifying, summarizing, and reporting the transactions of a business.
management accounting - CORRECT ANSWER - The area of accounting concerned with
providing internal financial reports to assist management in making decisions.
annual report - CORRECT ANSWER - A document that summarizes the results of
operations and financial status of a company for the past year and outlines future plans.
,internal revenue service (IRS) - CORRECT ANSWER - A government agency that
prescribes the rules and regulations that govern the collection of tax revenues in the United
States
financial statements - CORRECT ANSWER - Reports such as the balance sheet, income
statement, and statement of cash flows, which summarize the financial status and results of
operations of a business entity
financial accounting - CORRECT ANSWER - The area of accounting concerned with
reporting financial information to interested external parties
assets - CORRECT ANSWER - Economic resources that are owned or controlled by a
company
liabilities - CORRECT ANSWER - Obligations to pay cash, transfer other assets, or
provide services to someone else
owner's equity - CORRECT ANSWER - The remaining claim against the assets of a
business after the liabilities have been deducted
financial accounting standards board (FASB) - CORRECT ANSWER - The organization
responsible for studying accounting issues and establishing accounting standards to govern
financial reporting in the United States
generally accepted accounting principles (GAAP) - CORRECT ANSWER - Authoritative
guidelines that define accounting practice at a particular time in the United States
governmental accounting standards board (GASB) - CORRECT ANSWER - An
independent private organization that sets the accounting and financial reporting standards for
state and local governments following GAAP
, securities and exchange commission (SEC) - CORRECT ANSWER - The government
body responsible for regulating the financial reporting practices of most publicly owned
corporations in connection with the buying and selling of stocks and bonds.
certified public accountant (CPA) - CORRECT ANSWER - An accountant who has met
specified professional requirements established by the AICPA and local and state societies. a key
service provided by CPAs is the performance of independent audits of financial statements.
American institute of certified public accountants (AICPA) - CORRECT ANSWER -A
Professional organization of CPAs in which membership is voluntary
international accounting standards board (IASB) - CORRECT ANSWER - A committee
formed to develop worldwide accounting standards.
ethics - CORRECT ANSWER - The basic moral principles that govern an individual's
behavior
business documents - CORRECT ANSWER - Records of transactions used as the basis for
recording accounting entries; include invoices, check stubs, receipts, and similar business papers.
transaction - CORRECT ANSWER - Two parties exchanging something of value
internal transaction - CORRECT ANSWER - A transaction that occurs within a company,
does not involve an external party, and is not recorded in the company's financial records.
external transaction - CORRECT ANSWER - An exchange that occurs between a
company and an external party and that is recorded in the financial records of the company
arm's length transaction - CORRECT ANSWER - A transaction in which a buyer and seller
act independently to get the best possible deal
