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ACCOUNTING 200 EXAM 1 QUESTIONS
AND ANSWERS
account payable - correct answer- a liability backed by the
general reputation and credit standing at the debtor.
accounting - correct answer- the information system that
measures business activities, processes that information into
reports and financial statements, and communicates the results
to decision makers.
accounting equation - correct answer- assets=liabilities+owners
equity
asset - correct answer- an economic resource that is expected
to be of benefit in the future.
balance sheet - correct answer- list of an entity's assets,
liabilities, and owner's equity as of a specific date. also called
the statement of financial position.
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board of directors - correct answer- group elected by the
stockholders to set policy for a corporation and to appoint its
officers.
capital - correct answer- another name for the owner's equity of
a business
cash - correct answer- money and any medium of exchange
that a bank accepts at face value.
common stock - correct answer- the most basic form of capital
stock.
continuity (going concern) assumption - correct answer- holds
that the entity will remain in operation for the foreseeable
future.
corporation - correct answer- a business owned by
stockholders. It is a legal entity, an "artificial person" in the eyes
of the law.
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current asset - correct answer- an asset that is expected to be
converted to cash, sold, or consumed during the next 12
months or within the business's normal operating cycle if longer
than a year.
current liability - correct answer- a debt due to be paid within
one year or within the entity's operating cycle if the cycle is
longer than a year.
deficit - correct answer- negative balance in retained earnings
caused by net losses over a period of years.
dividends - correct answer- distributions (usually cash) by a
corporation to its stockholders.
entity - correct answer- an organization or a section of an
organization that, for accounting purposes, stands apart from
other organizations and individuals as a separate economic
unit.
expenses - correct answer- decrease in retained earnings that
results from operations; the cost of doing business;opposite of
revenues.
ACCOUNTING 200 EXAM 1 QUESTIONS
AND ANSWERS
account payable - correct answer- a liability backed by the
general reputation and credit standing at the debtor.
accounting - correct answer- the information system that
measures business activities, processes that information into
reports and financial statements, and communicates the results
to decision makers.
accounting equation - correct answer- assets=liabilities+owners
equity
asset - correct answer- an economic resource that is expected
to be of benefit in the future.
balance sheet - correct answer- list of an entity's assets,
liabilities, and owner's equity as of a specific date. also called
the statement of financial position.
,2 | Page
board of directors - correct answer- group elected by the
stockholders to set policy for a corporation and to appoint its
officers.
capital - correct answer- another name for the owner's equity of
a business
cash - correct answer- money and any medium of exchange
that a bank accepts at face value.
common stock - correct answer- the most basic form of capital
stock.
continuity (going concern) assumption - correct answer- holds
that the entity will remain in operation for the foreseeable
future.
corporation - correct answer- a business owned by
stockholders. It is a legal entity, an "artificial person" in the eyes
of the law.
, 3 | Page
current asset - correct answer- an asset that is expected to be
converted to cash, sold, or consumed during the next 12
months or within the business's normal operating cycle if longer
than a year.
current liability - correct answer- a debt due to be paid within
one year or within the entity's operating cycle if the cycle is
longer than a year.
deficit - correct answer- negative balance in retained earnings
caused by net losses over a period of years.
dividends - correct answer- distributions (usually cash) by a
corporation to its stockholders.
entity - correct answer- an organization or a section of an
organization that, for accounting purposes, stands apart from
other organizations and individuals as a separate economic
unit.
expenses - correct answer- decrease in retained earnings that
results from operations; the cost of doing business;opposite of
revenues.
