PACE EXAM 2025 QUESTIONS AND
ANSWERS
What are assests - ANS resources controlled by company
basic elements of balance sheet - ANS assests
liabilities
stockholder equity
sole proprietorship - ANS 1 person owning company
partnership - ANS 2 or more owners
corporation - ANS separate entityfrom legeal and accounting perspective
accounting equation - ANS A=L+SE
how are debits and credits displayed - ANS DR on left and CR on right
expenses - ANS all cost of doing business that are necessary to earn revenue
purpose of retained earnings - ANS reports the way net income and distribution of dividends
affect financial position
1
Page
retained earning formula - ANS beg RE + NI - DIVIDENDS=end RE
@COPYRIGHT FYNDLAY 2025/2026
, headings of financial statements contain - ANS COMPANY NAME
TYPE OF STATEMENT
DATE
cash flows - ANS Financing
Investing
Opertating
operating - ANS running the business; short term asset
change asset and liabilities
investing - ANS buying and selling resources; long term asset
financing - ANS borrowing from banks ; long term liability; stocks and bonds
dividends - ANS distribution of earnings
revenue - ANS selling goods or services to customers
internal controls purposes - ANS methods company use to protect against THEFT, enhance
RELIABILITY, promote EFFICIENCY, ensure COMPLIANCE WITH LAWS
separation of duties - ANS each person assigned to specific job
internal controls - ANS ensure accuracy in accounting reports
2
Page
@COPYRIGHT FYNDLAY 2025/2026
, interest formula - ANS (P*R*T) principal, rate, time
current assests - ANS assests the busniess will use up or turn into cash within 12 months
current liability - ANS debts and other obligations that will be paid or fulfilled within 12
months
matching principle - ANS cost of employee wages is recorded in the same period that the
employees work to generate revenue for the company
adjusting entries are made to... - ANS retained revenue and expenses that have not been
recorded but belong in current period
accured expense - ANS expense have been incurred but not paid
accured revenue - ANS revenue that been earned but not collected
permanent accounts - ANS balance sheet accounts (A, L, SE)
not closed at end of each period
temporary accounts - ANS income statement accounts (Revenues, Expenses, Dividends
Declared)
are closed at end of each period
general ledger - ANS summarizes effects of journal entries on each account
general journal - ANS to record the effects of each days transactions
3
Page
@COPYRIGHT FYNDLAY 2025/2026
ANSWERS
What are assests - ANS resources controlled by company
basic elements of balance sheet - ANS assests
liabilities
stockholder equity
sole proprietorship - ANS 1 person owning company
partnership - ANS 2 or more owners
corporation - ANS separate entityfrom legeal and accounting perspective
accounting equation - ANS A=L+SE
how are debits and credits displayed - ANS DR on left and CR on right
expenses - ANS all cost of doing business that are necessary to earn revenue
purpose of retained earnings - ANS reports the way net income and distribution of dividends
affect financial position
1
Page
retained earning formula - ANS beg RE + NI - DIVIDENDS=end RE
@COPYRIGHT FYNDLAY 2025/2026
, headings of financial statements contain - ANS COMPANY NAME
TYPE OF STATEMENT
DATE
cash flows - ANS Financing
Investing
Opertating
operating - ANS running the business; short term asset
change asset and liabilities
investing - ANS buying and selling resources; long term asset
financing - ANS borrowing from banks ; long term liability; stocks and bonds
dividends - ANS distribution of earnings
revenue - ANS selling goods or services to customers
internal controls purposes - ANS methods company use to protect against THEFT, enhance
RELIABILITY, promote EFFICIENCY, ensure COMPLIANCE WITH LAWS
separation of duties - ANS each person assigned to specific job
internal controls - ANS ensure accuracy in accounting reports
2
Page
@COPYRIGHT FYNDLAY 2025/2026
, interest formula - ANS (P*R*T) principal, rate, time
current assests - ANS assests the busniess will use up or turn into cash within 12 months
current liability - ANS debts and other obligations that will be paid or fulfilled within 12
months
matching principle - ANS cost of employee wages is recorded in the same period that the
employees work to generate revenue for the company
adjusting entries are made to... - ANS retained revenue and expenses that have not been
recorded but belong in current period
accured expense - ANS expense have been incurred but not paid
accured revenue - ANS revenue that been earned but not collected
permanent accounts - ANS balance sheet accounts (A, L, SE)
not closed at end of each period
temporary accounts - ANS income statement accounts (Revenues, Expenses, Dividends
Declared)
are closed at end of each period
general ledger - ANS summarizes effects of journal entries on each account
general journal - ANS to record the effects of each days transactions
3
Page
@COPYRIGHT FYNDLAY 2025/2026
