ACCT 211-LIBERTY UNIVERSITY EXAM 1
WITH ALL CORRECT & VERIFIED ANSWERS
Importance of Accounting Correct answer-Identifying, Recording, Communicating
Users of Financial Information Correct answer-1. Internal
2. External
Internal Users Correct answer-Internal users of accounting information ARE directly involved in
managing and operating an organization.
External Users Correct answer-External users of accounting information are NOT directly involved
in running the organization
3 Parts of the Fraud Triangle Correct answer-Opportunity-Envision a way to commit fraud with a
low perceived risk of getting caught
Rationalization-Fails to see the criminal nature of the fraud or justifies the action
Financial Pressure-Must have some pressure to commit fraud, like unpaid bills
Dodd-Frank Wall Street Reform and Consumer Protection Act Correct answer-This act was
designed to:
1. promote accountability and transparency in the financial system,
2. put an end to the notion of "too big to fail,"
3. protect the taxpayer by ending bailouts, and
4. protect consumers from abusive financial services.
GAAP Correct answer-Generally Accepted Accounting Principles
aims to make information relevant, reliable, and comparable
IFRS Correct answer-International Financial Reporting Standards
Identify preferred accounting practices
IASB Correct answer-International Accounting Standards Board
An independent group (consisting of individuals from many countries), issues International Financial
Reporting Standards (IFRS)
Conceptual Framework Correct answer-
Principles of Accounting Correct answer-1. Measurement Principle
(or Cost Principle)
Accounting information is based on actual cost. Actual cost is considered objective.
2. Revenue Recognition Principle
a. Recognize revenue when it is earned.
b. Proceeds need not be in cash.
c. Measure revenue by cash received plus cash value of items received
3. Expense Recognition Principle
(or Matching Principle): A company must record its expenses incurred to generate the revenue
reported.
WITH ALL CORRECT & VERIFIED ANSWERS
Importance of Accounting Correct answer-Identifying, Recording, Communicating
Users of Financial Information Correct answer-1. Internal
2. External
Internal Users Correct answer-Internal users of accounting information ARE directly involved in
managing and operating an organization.
External Users Correct answer-External users of accounting information are NOT directly involved
in running the organization
3 Parts of the Fraud Triangle Correct answer-Opportunity-Envision a way to commit fraud with a
low perceived risk of getting caught
Rationalization-Fails to see the criminal nature of the fraud or justifies the action
Financial Pressure-Must have some pressure to commit fraud, like unpaid bills
Dodd-Frank Wall Street Reform and Consumer Protection Act Correct answer-This act was
designed to:
1. promote accountability and transparency in the financial system,
2. put an end to the notion of "too big to fail,"
3. protect the taxpayer by ending bailouts, and
4. protect consumers from abusive financial services.
GAAP Correct answer-Generally Accepted Accounting Principles
aims to make information relevant, reliable, and comparable
IFRS Correct answer-International Financial Reporting Standards
Identify preferred accounting practices
IASB Correct answer-International Accounting Standards Board
An independent group (consisting of individuals from many countries), issues International Financial
Reporting Standards (IFRS)
Conceptual Framework Correct answer-
Principles of Accounting Correct answer-1. Measurement Principle
(or Cost Principle)
Accounting information is based on actual cost. Actual cost is considered objective.
2. Revenue Recognition Principle
a. Recognize revenue when it is earned.
b. Proceeds need not be in cash.
c. Measure revenue by cash received plus cash value of items received
3. Expense Recognition Principle
(or Matching Principle): A company must record its expenses incurred to generate the revenue
reported.
