ACCOUNTING 2036 EXAM 1 MIZZOU
(Prestigiacomo) QUESTIONS AND
ANSWERS SCORED A+ 2025-2026
UPDATED.
Accounting System - Answer
What is the main goal of an accounting system? - Answer To capture information about the
operating, investing, and financing activities of a company so that it can be reported to decision
makers, both inside and outside the business
Managerial accounting reports - Answer include detailed financial plans and continually
updated reports about the operating performance of the company
-only available to employees of company (internal users)
Basic Accounting Equation - Answer what a company owns must equal what a company
owes to its creditors and stockholders
asset - Answer an economic resource presently controlled by the company; it has
measurable value and is expected to benefit the company by producing cash inflows or reducing
cash out flows in the future.
(cash, supplies, equipment, software, inventory)
Liabilities - Answer measurable accounts that the company owes to its creditors.
(Notes payable, accounts payable, salaries and wages payable, taxes payable)
Creditors - Answer From a legal perspective, _________ have a legal priority over
stockholders. Thus if a company goes out of business, liabilities must be paid before any
amounts are paid to stockholders.
, 2. the owners have a claim on amounts the company has earned through profitable business
operations (retained earnings)
revenues - Answer earned by selling goods or services to customers
Expenses - Answer all costs of doing business that are necessary to earn revenues.
By generating _______ ________ , a company increases it's stockholders equity - Answer net
income
A company's profits are accumulated in retained earnings until a decision is made to distribute
them to stockholders is what is called a ___________. - Answer dividends
________ are NOT an expense incurred to generate earnings, rather __________ are an
optional distribution of earnings to stockholders, approved by the companys board of directors.
-Reported in retained earnings - Answer dividends
4 main accounting reports - Answer 1. Income Statement
2. Statement of retained earnings
3. Balance Sheet
4. Statement of cash flows
Calendar year - Answer a 12 month period ending on december 31st
fiscal year - Answer a 12 month period ending on a day other than decmber 31
Income statement - Answer the body of an __________ __________ has three major parts...
1. revenues
2. expenses
(Prestigiacomo) QUESTIONS AND
ANSWERS SCORED A+ 2025-2026
UPDATED.
Accounting System - Answer
What is the main goal of an accounting system? - Answer To capture information about the
operating, investing, and financing activities of a company so that it can be reported to decision
makers, both inside and outside the business
Managerial accounting reports - Answer include detailed financial plans and continually
updated reports about the operating performance of the company
-only available to employees of company (internal users)
Basic Accounting Equation - Answer what a company owns must equal what a company
owes to its creditors and stockholders
asset - Answer an economic resource presently controlled by the company; it has
measurable value and is expected to benefit the company by producing cash inflows or reducing
cash out flows in the future.
(cash, supplies, equipment, software, inventory)
Liabilities - Answer measurable accounts that the company owes to its creditors.
(Notes payable, accounts payable, salaries and wages payable, taxes payable)
Creditors - Answer From a legal perspective, _________ have a legal priority over
stockholders. Thus if a company goes out of business, liabilities must be paid before any
amounts are paid to stockholders.
, 2. the owners have a claim on amounts the company has earned through profitable business
operations (retained earnings)
revenues - Answer earned by selling goods or services to customers
Expenses - Answer all costs of doing business that are necessary to earn revenues.
By generating _______ ________ , a company increases it's stockholders equity - Answer net
income
A company's profits are accumulated in retained earnings until a decision is made to distribute
them to stockholders is what is called a ___________. - Answer dividends
________ are NOT an expense incurred to generate earnings, rather __________ are an
optional distribution of earnings to stockholders, approved by the companys board of directors.
-Reported in retained earnings - Answer dividends
4 main accounting reports - Answer 1. Income Statement
2. Statement of retained earnings
3. Balance Sheet
4. Statement of cash flows
Calendar year - Answer a 12 month period ending on december 31st
fiscal year - Answer a 12 month period ending on a day other than decmber 31
Income statement - Answer the body of an __________ __________ has three major parts...
1. revenues
2. expenses
