MGT 8803 - Accounting Exam Comprehensive Questions with Verified Answers Graded A+

MGT 8803 - Accounting Exam
Comprehensive Questions with
Verified Answers Graded A+
unlimited, taxation, limited, publicly, privately - Answer: Forms of Businesses:

Proprietorship & Partnership

• ____________liability

• No ____________ (on the business; the owner, however days pay taxes)



Corporation (Shareholders -> Board of Directors -> Top Managers)

• ____________ liability

• Taxation (corporations pay taxes, shareholders pay taxes on earnings)

• Can be ____________ traded or ____________ held.



separate entity - Answer: Assumption that we treat the business and the owners as separate
entities, focusing on the accounting for the businesses, not the owners.



unit of measurement - Answer: the currency in which the company is operating



going concern - Answer: We presume that the company will continue to operate -- that it'll be
ongoing



periodicity - Answer: We presume that we can arbitrarily pick any time period that we want to
and report the financial results for that time period

,materiality - Answer: Assumption that the only information that needs to be disclosed in
financial statements is information that will be useful for those who rely on the financial
statements to make decisions



investors, creditors, government agencies, company management, financial analysts - Answer:
Users of Financial Reports



• ________________ (stockholders)

• ________________ (banks)

• ________________ ________________ (SEC)

• ________________ ________________

• ________________ ________________



Generally Accepted Accounting Principles, Securities & Exchange Commission, Financial
Accounting Standards Board, International Financial Reporting Standards - Answer:
_____________ _____________ _____________ _____________(GAAP)



• _____________ & _____________ _____________ (SEC):The rule-making resides under the
authority of the SEC.

• _____________ _____________ _____________ _____________(FASB): consists of
representatives from public accounting firms, industry, government agencies, and academia.



_____________ _____________ _____________ _____________(IFRS)



understandability, timeliness, full disclosure, comparability, objectivity, decision relevance -
Answer: Qualities of Financial Statements



• _______________________

, • _______________________

• _______________________ _______________________

• _______________________

• _______________________

• _______________________ _______________________



Balance Sheet - Answer: Measures financial position at a point in time.



resources, assets, funding, creditors, liabilities, owner's equity, owners - Answer: Accounting
Equation.

• The left side of the equation represents ________________ of the company, that is the
________________ are the resources.

• The right side represents sources of the ________________ provided by the
________________ . The ________________ represent the creditor's claims.

• ________________ ________________ represents the sources provided by the
________________ and the owner's claims.



Assets, Liabilities, Owner's Equity - Answer: Accounting Equation:

_______________ = ________________ + __________________



assets - Answer: Resources owned or rights to receive resources



physical, intangible, legal rights - Answer: Assets

• ________________ (cash, buildings, inventory, equipment)

• ________________ (copyrights, patents, or trademarks)

• ________________ ________________ (e.g. legal right to receive payment)