Page 1 of 158
IU A100 Final Exam ACTUAL EXAM ALL 400
QUESTIONS AND CORRECT ANSWERS LATEST
UPDATE THIS YEAR
A100 Final Exam IU
For Accounting information to be useful, it must be the following?
A. It must be consistent and comparable
B. It must be a faithful representation and relevant
C. It must be comparable and reliable
D. It must be relevant and consistent
B. It must be a faithful representation and relevant
Which of the following describes the primary objective of financial accounting?
A. To provide useful financial information only to stock holders
B. To provide information about a business' future business strategies
C. To provide useful financial information about a business to help external parties make
informed decisions
D. To provide use financial information about a business to help internal parties make
informed decisions
1
, Page 2 of 158
C. To provide useful financial information about a business to help external parties make
informed decisions
Financial accounting standards are known collectively as GAAP. What does this acronym
stand for?
A. Generally Accepted Accounting Principles
B. Generally Applied Accounting Procedures
C. Governmentally Approved Accounting practices
D. Generally Authorized Auditing Principles
A. Generally Accepted Accounting Principles
Which of the following best describes the purpose of an audit?
A. To prove the accuracy of an entitys financial statements
B. To lend credibility to an entity's financial statements
C. To audit every transaction that an entity entered into
D. To establish that a corporation's stock is a sound investment
B. To lend credibility to an entity's financial statements
Which of the following is primarily responsible for the information provided in the financial
statements?
A. Company Top Management
B. External Auditors
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C. Board of Directors
D. Internal Accounting Staff
A. Company top management
When a company pays a dividend, it is classified as
As a financing cash outflow
10 k is ____ and 10 q is ___
annual; quarterly
Balance sheet is the backbone of accounting.
The balance sheet is based on the accounting equation:
Assets= Liabilities + Owners Equity
Current assets include
cash and other assets that are expected to be converted into cash or used up in about one year
or less
Such as: cash, accounts receivable, inventory, and prepaid items such as prepaid insurance or
rent
Long term investments
assets purchased by the company to be held as an investment
Such as: stock or bonds
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Fixed assets
assets purchased by the business to be used in its operations but are expected to last longer
than one year and not resold
Such as: equipment used in the operations of the business
Intangible assets
do exist and are on the balance sheet
Current Liabilities
are debts expected to become due within one year from the date of the balance sheet
Such as: notes payable, accounts payable, wages payable, and utilities payable
Retained earnings
total profits of company and minus any that have been paid to stock holders
Two unique things about a balance sheet
1. it is a picture in time it is a snapshot of the company
2. it rolls over each quarter
Income statement
Revenues
-Operating Expenses
4
IU A100 Final Exam ACTUAL EXAM ALL 400
QUESTIONS AND CORRECT ANSWERS LATEST
UPDATE THIS YEAR
A100 Final Exam IU
For Accounting information to be useful, it must be the following?
A. It must be consistent and comparable
B. It must be a faithful representation and relevant
C. It must be comparable and reliable
D. It must be relevant and consistent
B. It must be a faithful representation and relevant
Which of the following describes the primary objective of financial accounting?
A. To provide useful financial information only to stock holders
B. To provide information about a business' future business strategies
C. To provide useful financial information about a business to help external parties make
informed decisions
D. To provide use financial information about a business to help internal parties make
informed decisions
1
, Page 2 of 158
C. To provide useful financial information about a business to help external parties make
informed decisions
Financial accounting standards are known collectively as GAAP. What does this acronym
stand for?
A. Generally Accepted Accounting Principles
B. Generally Applied Accounting Procedures
C. Governmentally Approved Accounting practices
D. Generally Authorized Auditing Principles
A. Generally Accepted Accounting Principles
Which of the following best describes the purpose of an audit?
A. To prove the accuracy of an entitys financial statements
B. To lend credibility to an entity's financial statements
C. To audit every transaction that an entity entered into
D. To establish that a corporation's stock is a sound investment
B. To lend credibility to an entity's financial statements
Which of the following is primarily responsible for the information provided in the financial
statements?
A. Company Top Management
B. External Auditors
2
, Page 3 of 158
C. Board of Directors
D. Internal Accounting Staff
A. Company top management
When a company pays a dividend, it is classified as
As a financing cash outflow
10 k is ____ and 10 q is ___
annual; quarterly
Balance sheet is the backbone of accounting.
The balance sheet is based on the accounting equation:
Assets= Liabilities + Owners Equity
Current assets include
cash and other assets that are expected to be converted into cash or used up in about one year
or less
Such as: cash, accounts receivable, inventory, and prepaid items such as prepaid insurance or
rent
Long term investments
assets purchased by the company to be held as an investment
Such as: stock or bonds
3
, Page 4 of 158
Fixed assets
assets purchased by the business to be used in its operations but are expected to last longer
than one year and not resold
Such as: equipment used in the operations of the business
Intangible assets
do exist and are on the balance sheet
Current Liabilities
are debts expected to become due within one year from the date of the balance sheet
Such as: notes payable, accounts payable, wages payable, and utilities payable
Retained earnings
total profits of company and minus any that have been paid to stock holders
Two unique things about a balance sheet
1. it is a picture in time it is a snapshot of the company
2. it rolls over each quarter
Income statement
Revenues
-Operating Expenses
4
