Rutgers Introduction to Financial |\ |\ |\ |\
Accounting Exam 1 questions with |\ |\ |\ |\ |\
answers
Three Basic Activities of Accounting - CORRECT ANSWERS
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✔✔identify, record, communicate
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Internal Users - CORRECT ANSWERS ✔✔marketing,
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management, finance, human resources |\ |\ |\
External Users - CORRECT ANSWERS ✔✔investors and
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creditors
Ethics - CORRECT ANSWERS ✔✔standards of conduct by
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which one's actions are judged as right or wrong; fair or
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unfair; honest or dishonest
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Generally Accepted Accounting Principles (GAAP) -
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CORRECT ANSWERS ✔✔standards that are generally
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accepted and universally practiced
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Historical Cost Principle - CORRECT ANSWERS ✔✔dictates
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that companies record assets at their cost
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, Fair Value Principle - CORRECT ANSWERS ✔✔states that
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assets and liabilities should be reported at fair value
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Monetary Unit Assumption - CORRECT ANSWERS
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✔✔requires that companies include accounting records|\ |\ |\ |\ |\ |\
only transaction data that can be expressed in fair terms
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of money
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Economic Entity Assumption - CORRECT ANSWERS
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✔✔requires that activities of the entity kept separate and
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distinct from the other activities of its owner and all other
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economic entities |\
Forms of Business Ownership - CORRECT ANSWERS
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✔✔proprietorship, partnership, corporation |\ |\
Proprietorship - CORRECT ANSWERS ✔✔owned by one |\ |\ |\ |\ |\ |\ |\
person; owner receives all profits and is responsible for all
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debts
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Partnership - CORRECT ANSWERS ✔✔owned by two or |\ |\ |\ |\ |\ |\ |\ |\
more persons; unlimited personal liability; partnership
|\ |\ |\ |\ |\ |\
agreement
Accounting Exam 1 questions with |\ |\ |\ |\ |\
answers
Three Basic Activities of Accounting - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\
✔✔identify, record, communicate
|\ |\ |\
Internal Users - CORRECT ANSWERS ✔✔marketing,
|\ |\ |\ |\ |\ |\
management, finance, human resources |\ |\ |\
External Users - CORRECT ANSWERS ✔✔investors and
|\ |\ |\ |\ |\ |\ |\
creditors
Ethics - CORRECT ANSWERS ✔✔standards of conduct by
|\ |\ |\ |\ |\ |\ |\ |\
which one's actions are judged as right or wrong; fair or
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
unfair; honest or dishonest
|\ |\ |\
Generally Accepted Accounting Principles (GAAP) -
|\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔standards that are generally
|\ |\ |\ |\ |\ |\
accepted and universally practiced
|\ |\ |\
Historical Cost Principle - CORRECT ANSWERS ✔✔dictates
|\ |\ |\ |\ |\ |\ |\
that companies record assets at their cost
|\ |\ |\ |\ |\ |\
, Fair Value Principle - CORRECT ANSWERS ✔✔states that
|\ |\ |\ |\ |\ |\ |\ |\
assets and liabilities should be reported at fair value
|\ |\ |\ |\ |\ |\ |\ |\
Monetary Unit Assumption - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\
✔✔requires that companies include accounting records|\ |\ |\ |\ |\ |\
only transaction data that can be expressed in fair terms
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
of money
|\
Economic Entity Assumption - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\
✔✔requires that activities of the entity kept separate and
|\ |\ |\ |\ |\ |\ |\ |\ |\
distinct from the other activities of its owner and all other
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
economic entities |\
Forms of Business Ownership - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\
✔✔proprietorship, partnership, corporation |\ |\
Proprietorship - CORRECT ANSWERS ✔✔owned by one |\ |\ |\ |\ |\ |\ |\
person; owner receives all profits and is responsible for all
|\ |\ |\ |\ |\ |\ |\ |\ |\
debts
|\
Partnership - CORRECT ANSWERS ✔✔owned by two or |\ |\ |\ |\ |\ |\ |\ |\
more persons; unlimited personal liability; partnership
|\ |\ |\ |\ |\ |\
agreement
