CBAD 201 Financial Accounting Final Exam
Prep – High-Yield Topics & Practice
Questions
accounting is... - ANSWER ✨✔---The information system that identifies, records, and
communicates the economic events of an organization to interested users.
Who uses accounting information? - ANSWER ✨✔---Individuals, investors and creditors, regulatory
bodies, nonprofit organizations
Financial Accounting - ANSWER ✨✔---accounting information and analyses prepared for people
outside the organization
Managerial Accounting - ANSWER ✨✔---accounting used to provide information and analyses to
managers inside the organization to assist them in decision making
Proprietorship - ANSWER ✨✔---A business owned by one person
Partnership - ANSWER ✨✔---A business in which two or more persons combine their assets and
skills
Limited Liability Company - ANSWER ✨✔---A business organization in which the business (not the
owner) is liable for the company's debts
Corporation - ANSWER ✨✔---A business owned by stockholders who share in its profits but are
not personally responsible for its debts
, the entity assumption - ANSWER ✨✔---Organization stands apart from other organizations and
individuals as a separate economic unit
the continuity assumption - ANSWER ✨✔---States that businesses are assumed to continue to
operate into the foreseeable future.
Historical Cost Principle - ANSWER ✨✔---An accounting principle that states that companies
should record assets at their cost.
stable monetary unit assumption - ANSWER ✨✔---The reason for ignoring the effect of inflation in
the accounting records, based on the assumption that the dollar's purchasing power is relatively stable.
Accounting Equation - ANSWER ✨✔---An equation showing the relationship among assets,
liabilities, and owner's equity
assets - ANSWER ✨✔---money and other valuables belonging to an individual or business
liabilities - ANSWER ✨✔---Amounts owed to creditors
Stockholders' Equity - ANSWER ✨✔---The owners' claim to assets.
paid-in capital - ANSWER ✨✔---the amount stockholders have invested in the company
retained earnings - ANSWER ✨✔---An amount earned by a corporation and not yet distributed to
stockholders.
revenues - ANSWER ✨✔---The financial resources of the government. The individual income tax
and Social Security tax are two major sources of the federal government's revenue.
Prep – High-Yield Topics & Practice
Questions
accounting is... - ANSWER ✨✔---The information system that identifies, records, and
communicates the economic events of an organization to interested users.
Who uses accounting information? - ANSWER ✨✔---Individuals, investors and creditors, regulatory
bodies, nonprofit organizations
Financial Accounting - ANSWER ✨✔---accounting information and analyses prepared for people
outside the organization
Managerial Accounting - ANSWER ✨✔---accounting used to provide information and analyses to
managers inside the organization to assist them in decision making
Proprietorship - ANSWER ✨✔---A business owned by one person
Partnership - ANSWER ✨✔---A business in which two or more persons combine their assets and
skills
Limited Liability Company - ANSWER ✨✔---A business organization in which the business (not the
owner) is liable for the company's debts
Corporation - ANSWER ✨✔---A business owned by stockholders who share in its profits but are
not personally responsible for its debts
, the entity assumption - ANSWER ✨✔---Organization stands apart from other organizations and
individuals as a separate economic unit
the continuity assumption - ANSWER ✨✔---States that businesses are assumed to continue to
operate into the foreseeable future.
Historical Cost Principle - ANSWER ✨✔---An accounting principle that states that companies
should record assets at their cost.
stable monetary unit assumption - ANSWER ✨✔---The reason for ignoring the effect of inflation in
the accounting records, based on the assumption that the dollar's purchasing power is relatively stable.
Accounting Equation - ANSWER ✨✔---An equation showing the relationship among assets,
liabilities, and owner's equity
assets - ANSWER ✨✔---money and other valuables belonging to an individual or business
liabilities - ANSWER ✨✔---Amounts owed to creditors
Stockholders' Equity - ANSWER ✨✔---The owners' claim to assets.
paid-in capital - ANSWER ✨✔---the amount stockholders have invested in the company
retained earnings - ANSWER ✨✔---An amount earned by a corporation and not yet distributed to
stockholders.
revenues - ANSWER ✨✔---The financial resources of the government. The individual income tax
and Social Security tax are two major sources of the federal government's revenue.
