BMGT 220 Exam 1 UPDATED Exam
Questions and CORRECT Answers
Net Income Retained - CORRECT ANSWER - Net Income- Dividends
Net Income - CORRECT ANSWER - Revenue- Expenses
Accounting Assumptions - CORRECT ANSWER - 1. Monetary unit
2. Time Period
3. Business Entity
4. Going Concern
Monetary Unit Assumption - CORRECT ANSWER - requires that financial reports be
expressed in a single money unity
Time Period Assumption - CORRECT ANSWER - Limits the economic data in financial
reports to that directly related to the activities of the business
Business Entity Assumption - CORRECT ANSWER - Limits the economic data in
financial reports to that directly related to the activities of the businesses
Going Concern Assumption - CORRECT ANSWER - requires that financial reports be
prepared assuming that the entity will continue operating into the future
Principles of Accounting - CORRECT ANSWER - 1. Measurement
2. Historical Cost
3. Revenue Recognition
4. Expense Recognition
, Measurement Principle - CORRECT ANSWER - requires that amounts be objective and
verifiable
Historical Cost Principle - CORRECT ANSWER - recording an item at its initial
transaction price, amounts do not normally change until another transaction occurs
Revenue Recognition Principle - CORRECT ANSWER - determines when revenue is
recorded in the accounting records, normally when the services have been performed of the
goods are delivered
Expense Recognition Principle - CORRECT ANSWER - matching principle, requires
expenses to be recorded in the same period as the related revenue
Order of Financial Statements - CORRECT ANSWER - 1. Income statement
2. Retained Earnings
3.Balance Sheet
4. Statement of cash flows
Income statement - CORRECT ANSWER - Summary of revenue and expenses
Retained Earnings - CORRECT ANSWER - Summary of change in retained earnings
Balance Sheet - CORRECT ANSWER - a list of assets, liabilities, and Equity at a moment
in time
Statement of Cash Flows - CORRECT ANSWER - Summary of cash receipts and cash
payments
Income Statement Structure - CORRECT ANSWER - Fees Earned
Expenses-
Questions and CORRECT Answers
Net Income Retained - CORRECT ANSWER - Net Income- Dividends
Net Income - CORRECT ANSWER - Revenue- Expenses
Accounting Assumptions - CORRECT ANSWER - 1. Monetary unit
2. Time Period
3. Business Entity
4. Going Concern
Monetary Unit Assumption - CORRECT ANSWER - requires that financial reports be
expressed in a single money unity
Time Period Assumption - CORRECT ANSWER - Limits the economic data in financial
reports to that directly related to the activities of the business
Business Entity Assumption - CORRECT ANSWER - Limits the economic data in
financial reports to that directly related to the activities of the businesses
Going Concern Assumption - CORRECT ANSWER - requires that financial reports be
prepared assuming that the entity will continue operating into the future
Principles of Accounting - CORRECT ANSWER - 1. Measurement
2. Historical Cost
3. Revenue Recognition
4. Expense Recognition
, Measurement Principle - CORRECT ANSWER - requires that amounts be objective and
verifiable
Historical Cost Principle - CORRECT ANSWER - recording an item at its initial
transaction price, amounts do not normally change until another transaction occurs
Revenue Recognition Principle - CORRECT ANSWER - determines when revenue is
recorded in the accounting records, normally when the services have been performed of the
goods are delivered
Expense Recognition Principle - CORRECT ANSWER - matching principle, requires
expenses to be recorded in the same period as the related revenue
Order of Financial Statements - CORRECT ANSWER - 1. Income statement
2. Retained Earnings
3.Balance Sheet
4. Statement of cash flows
Income statement - CORRECT ANSWER - Summary of revenue and expenses
Retained Earnings - CORRECT ANSWER - Summary of change in retained earnings
Balance Sheet - CORRECT ANSWER - a list of assets, liabilities, and Equity at a moment
in time
Statement of Cash Flows - CORRECT ANSWER - Summary of cash receipts and cash
payments
Income Statement Structure - CORRECT ANSWER - Fees Earned
Expenses-
