D774 - SECTION 1 VERIFIED ACCURATE STUDY
GUIDE
Securities and Exchange Commission (SEC) - Answers - Gov organization created as
result of Stock Market Crash of 1929 and the resulting Great Depression
Sarbanes-Oxley Act of 2002 - Answers - requires corporate execs to implement risk
managment procedures, est and maintain internal controls, requires both mgmt and
external auditors to certify adequacy of company's internal controls
Securities Act of 1933 - Answers - Ensure investors have financial and other critical
information about securities that are being issued to the public for the first time.
Requires companies to disclose info such as assets, financial health, who board
members and sr. execs are
Securities Act of 1934 - Answers - Created Securities and Exchange Commission and
authorized SEC to govern secondary markets and the trading of corporate securities
sold in the US
Sarbanes-Oxley Act of 2002 - Answers - Mandate strict reforms to improve financial
disclosures, prevent fraudulent financial practices, ensures every company's board of
directors has a financial expert as a board member
Dodd-Frank Act - Answers - Passed in 2008. Improve financial market stability and curb
risky financial industry activitie (risky mortgages)
Financial Accounting Standards Board (FASB) - Answers - The primary accounting
standard-setting body in the United States.
Generally Accepted Accounting Principles (GAAP) - Answers - Authoritative guidelines
that define accounting practice at a particular time in the United States.
How did the Industrial Revolution lead to increased importance of reliable financial
statements? - Answers - through the creation of a greater need for investmentn capital
What contributed to the need for accounting in Egypt 5,000 years ago? - Answers -
Taxation
External User - Answers - Investors, Lenders, Taxing authorities, Regulators who
monitor compliance, the Financial Press, Stock Exchanges, Suppliers, Customers
Internal User - Answers - Management Team, Purchasers, Internal Decision makers
, Financial Accounting - Answers - The type of accounting that focuses on reporting
information to external users for compliance, performance or other stewardship reasons
Managerial Accounting - Answers - a type of accounting focused primarily on providing
internal users with the necessary financial and nonfinancial information to help them
make the best possible decisions for the company.
Income Statement - Answers - examines profitability of a business over a specific time
period
Explaines how much revenue company is generating
what and how high expenses
whether revenues exceed expenses
Balance Sheet - Answers - financial statement that shows:
what a company owns (assets)
what it owes (liabilities)
how much the owners' interests in the company are (owners' equity)
snapshot of specific date
Assets = Liabilities + Owner's Equity - Answers - accounting equation the balance sheet
is based on
Cash Flow Statement - Answers - A financial statement that shows the flow of money in
and out of the business.
Cash Flow Statement - Answers - Shows cash coming into company from all sources.
Shows ALL cash going out
Income Statement - Answers - Shows how profitable company is
Cash Flow Statement - Answers - Shows how a company is generating and using its
cash
shows company's ability to operate and grown in short and long term
Certified Public Accountant (CPA) - Answers - A professional designation earned by
fulfilling certain education and experience requirements, in addition to passing a
comprehensive, four-part examination. Examination topics include financial accounting
theory and practice, income tax accounting, managerial accounting, governmental and
not-for-profit accounting, auditing, business law, and other aspects of the business
environment.
Internal Auditor - Answers - works for company preparing the financial statements
review and analyze corporate date and acctg information checking for accuracy
Return on Investment (ROI) - Answers - measure of operating performance and
efficiency in utlizing assets
GUIDE
Securities and Exchange Commission (SEC) - Answers - Gov organization created as
result of Stock Market Crash of 1929 and the resulting Great Depression
Sarbanes-Oxley Act of 2002 - Answers - requires corporate execs to implement risk
managment procedures, est and maintain internal controls, requires both mgmt and
external auditors to certify adequacy of company's internal controls
Securities Act of 1933 - Answers - Ensure investors have financial and other critical
information about securities that are being issued to the public for the first time.
Requires companies to disclose info such as assets, financial health, who board
members and sr. execs are
Securities Act of 1934 - Answers - Created Securities and Exchange Commission and
authorized SEC to govern secondary markets and the trading of corporate securities
sold in the US
Sarbanes-Oxley Act of 2002 - Answers - Mandate strict reforms to improve financial
disclosures, prevent fraudulent financial practices, ensures every company's board of
directors has a financial expert as a board member
Dodd-Frank Act - Answers - Passed in 2008. Improve financial market stability and curb
risky financial industry activitie (risky mortgages)
Financial Accounting Standards Board (FASB) - Answers - The primary accounting
standard-setting body in the United States.
Generally Accepted Accounting Principles (GAAP) - Answers - Authoritative guidelines
that define accounting practice at a particular time in the United States.
How did the Industrial Revolution lead to increased importance of reliable financial
statements? - Answers - through the creation of a greater need for investmentn capital
What contributed to the need for accounting in Egypt 5,000 years ago? - Answers -
Taxation
External User - Answers - Investors, Lenders, Taxing authorities, Regulators who
monitor compliance, the Financial Press, Stock Exchanges, Suppliers, Customers
Internal User - Answers - Management Team, Purchasers, Internal Decision makers
, Financial Accounting - Answers - The type of accounting that focuses on reporting
information to external users for compliance, performance or other stewardship reasons
Managerial Accounting - Answers - a type of accounting focused primarily on providing
internal users with the necessary financial and nonfinancial information to help them
make the best possible decisions for the company.
Income Statement - Answers - examines profitability of a business over a specific time
period
Explaines how much revenue company is generating
what and how high expenses
whether revenues exceed expenses
Balance Sheet - Answers - financial statement that shows:
what a company owns (assets)
what it owes (liabilities)
how much the owners' interests in the company are (owners' equity)
snapshot of specific date
Assets = Liabilities + Owner's Equity - Answers - accounting equation the balance sheet
is based on
Cash Flow Statement - Answers - A financial statement that shows the flow of money in
and out of the business.
Cash Flow Statement - Answers - Shows cash coming into company from all sources.
Shows ALL cash going out
Income Statement - Answers - Shows how profitable company is
Cash Flow Statement - Answers - Shows how a company is generating and using its
cash
shows company's ability to operate and grown in short and long term
Certified Public Accountant (CPA) - Answers - A professional designation earned by
fulfilling certain education and experience requirements, in addition to passing a
comprehensive, four-part examination. Examination topics include financial accounting
theory and practice, income tax accounting, managerial accounting, governmental and
not-for-profit accounting, auditing, business law, and other aspects of the business
environment.
Internal Auditor - Answers - works for company preparing the financial statements
review and analyze corporate date and acctg information checking for accuracy
Return on Investment (ROI) - Answers - measure of operating performance and
efficiency in utlizing assets
