Major Field Test Business Study Set Ques ons and
answers RATED A+ 2025/2026 NEW!!
Balance Sheet - Correct Answers A empts to describe the financial condi on of the firm at a
point in me.
Includes: Assets, Liabili es, & Equity - "net assets" what remains a&er deduc ng liabili es from
assets..
Income Statement - Correct Answers Presents the results of the opera ons of an en ty over a
peroid of me.
Includes: Revenues, Expenses, Income, Gains & Losses
Statement of Equity or Statement of Retained Earnings (Capital) - Correct Answers Bridges the
gap between the income statement and the balance sheet.
Arrangement depends on type of organiza on:
Proprietorship: Statement of Owners Equity
Partnership: Statement of Partners Equity
Corpora on: Statement of Stockholders Equity
In addi on, it contains: Investments by Owners and Distribu on to owners
Statement of Cash Flows - Correct Answers Provides informa on about a company's cash
receipts and cash payments during a specific period of me.
Includes all 10 elements of financial statements: assets, liabili es, equity, net income, income,
gains, losses, Statement of 'X' Equity, Investments by Owners, Distribu ons to Owners.
, Cash Basis Accoun ng - Correct Answers Revenue is recognized in the accoun ng period in
which the associated cash is received and Expenses are recognized in the accoun ng period that
the cash is paid.
Accrual Basis Accoun ng - Correct Answers Revenue is recognized in the accoun ng period in
which the revenue is earned, regardless of when the associated revenue is received. (Recorded
when the sale is made, not when it is paid for.)
Deprecia on - Correct Answers A method of alloca ng the cost of a tangible asset over its
useful life. Businesses depreciate long-term assets for both tax and accoun ng purposes.
Straight-Line Depreca on - Correct Answers Straight Line Deprecia on - (es mated
value/useful life)
Equal amounts of deprecia on expense are recorded in each period of the useful life of the
asset, if not disposed of prior to the end of es mated useful life.
The value is divided among es mated life of item.
Double Declining Balance Deprecia on - Correct Answers Double Declining Balance
An "accelerated" deprecia on method (more expense is recorded in the early periods of useful
life and less in the later periods.)
Basic Inventory Equa on for Goods - Correct Answers Beginning Inventory + Purchases =
Goods
Basic Inventory Equa on for Cost of Goods Sold (COGS) - Correct Answers Goods Available for
Sale - Ending Inventory = Cost of Goods Sold (COGS)
Basic Inventory Equa on for Ending Inventory - Correct Answers Beginning Inventory +
Purchases = Goods Available for Sale - Cost of Goods Sold (COGS) = ending inventory
, Periodic Inventory Accoun ng - Correct Answers No transac ons are recorded in the
inventory account un l the end of the accoun ng period. Merchandise purchases are recorded
in a purchases account.
Inventory is counted and costed at the end of each accoun ng period. The inventory account
beginning balance is adjusted to physical inventory amount and the difference is added to or
subtracted from periodic Cost of Goods Sold.
Perpetual Inventory Accoun ng - Correct Answers Merchandise purchases are added to the
inventory account when the merchandise is received.
Cost of Goods Sold is computed and subtracted from the inventory account as sales are
recorded.
FIFO (Inventory) - Correct Answers Inventory Oldest items inventory are sold first .(Example:
Fruit)
LIFO (Inventory) - Correct Answers Most recent items added to inventory are sold first.
(Example: Ore from Mining)
Average Cost (Inventory) - Correct Answers Ending inventory units are costed using an
average cost of goods available divided by the units available for sale. (Example: Rope)
Specific Iden fica on (Inventory) - Correct Answers Inventory items are tagged with their
cost. (Example: automobiles)
Generally Accepted Accoun ng Principles (GAAP) - Correct Answers A framework of
accoun ng standards, rules and procedures defined by the professional accoun ng industry,
which has been adopted by nearly all publicly traded U.S. companies.
answers RATED A+ 2025/2026 NEW!!
Balance Sheet - Correct Answers A empts to describe the financial condi on of the firm at a
point in me.
Includes: Assets, Liabili es, & Equity - "net assets" what remains a&er deduc ng liabili es from
assets..
Income Statement - Correct Answers Presents the results of the opera ons of an en ty over a
peroid of me.
Includes: Revenues, Expenses, Income, Gains & Losses
Statement of Equity or Statement of Retained Earnings (Capital) - Correct Answers Bridges the
gap between the income statement and the balance sheet.
Arrangement depends on type of organiza on:
Proprietorship: Statement of Owners Equity
Partnership: Statement of Partners Equity
Corpora on: Statement of Stockholders Equity
In addi on, it contains: Investments by Owners and Distribu on to owners
Statement of Cash Flows - Correct Answers Provides informa on about a company's cash
receipts and cash payments during a specific period of me.
Includes all 10 elements of financial statements: assets, liabili es, equity, net income, income,
gains, losses, Statement of 'X' Equity, Investments by Owners, Distribu ons to Owners.
, Cash Basis Accoun ng - Correct Answers Revenue is recognized in the accoun ng period in
which the associated cash is received and Expenses are recognized in the accoun ng period that
the cash is paid.
Accrual Basis Accoun ng - Correct Answers Revenue is recognized in the accoun ng period in
which the revenue is earned, regardless of when the associated revenue is received. (Recorded
when the sale is made, not when it is paid for.)
Deprecia on - Correct Answers A method of alloca ng the cost of a tangible asset over its
useful life. Businesses depreciate long-term assets for both tax and accoun ng purposes.
Straight-Line Depreca on - Correct Answers Straight Line Deprecia on - (es mated
value/useful life)
Equal amounts of deprecia on expense are recorded in each period of the useful life of the
asset, if not disposed of prior to the end of es mated useful life.
The value is divided among es mated life of item.
Double Declining Balance Deprecia on - Correct Answers Double Declining Balance
An "accelerated" deprecia on method (more expense is recorded in the early periods of useful
life and less in the later periods.)
Basic Inventory Equa on for Goods - Correct Answers Beginning Inventory + Purchases =
Goods
Basic Inventory Equa on for Cost of Goods Sold (COGS) - Correct Answers Goods Available for
Sale - Ending Inventory = Cost of Goods Sold (COGS)
Basic Inventory Equa on for Ending Inventory - Correct Answers Beginning Inventory +
Purchases = Goods Available for Sale - Cost of Goods Sold (COGS) = ending inventory
, Periodic Inventory Accoun ng - Correct Answers No transac ons are recorded in the
inventory account un l the end of the accoun ng period. Merchandise purchases are recorded
in a purchases account.
Inventory is counted and costed at the end of each accoun ng period. The inventory account
beginning balance is adjusted to physical inventory amount and the difference is added to or
subtracted from periodic Cost of Goods Sold.
Perpetual Inventory Accoun ng - Correct Answers Merchandise purchases are added to the
inventory account when the merchandise is received.
Cost of Goods Sold is computed and subtracted from the inventory account as sales are
recorded.
FIFO (Inventory) - Correct Answers Inventory Oldest items inventory are sold first .(Example:
Fruit)
LIFO (Inventory) - Correct Answers Most recent items added to inventory are sold first.
(Example: Ore from Mining)
Average Cost (Inventory) - Correct Answers Ending inventory units are costed using an
average cost of goods available divided by the units available for sale. (Example: Rope)
Specific Iden fica on (Inventory) - Correct Answers Inventory items are tagged with their
cost. (Example: automobiles)
Generally Accepted Accoun ng Principles (GAAP) - Correct Answers A framework of
accoun ng standards, rules and procedures defined by the professional accoun ng industry,
which has been adopted by nearly all publicly traded U.S. companies.
