KSU ACCTG 231 Final Study Questions
with complete solution|| LATEST UPDATE
2026
Sole Proprietorship -CORRECTANSWER One owner
Few legal requirements
Unlimited liability
Limited life
Partnership -CORRECTANSWER Two or more owners
Partnership agreement
Unlimited liability
Limited life
Mutual agency
Corporation -CORRECTANSWER Multiple owners
Limited liability
Unlimited life
Permission from the state
Double taxation
Risk Assessment -CORRECTANSWER Based on probability of something happening
for outcome
,Risk Averse -CORRECTANSWER Prefer the known over the unknown
Risk Taker -CORRECTANSWER Comfortable with the risk perceived
Planning -CORRECTANSWER Risk management - proactive
Failing to plan -CORRECTANSWER Planning to fail - reactive
Sophisticated user of information -CORRECTANSWER Understands business
environment
Correct operating, investing, and financing decisions
Internal Users -CORRECTANSWER Inside the company AND its decision process
Makes operating, investing, financing decisions for the company
External Users -CORRECTANSWER Outside the company OR its decision process
Makes operating, investing, financing decisions for themselves
Accounting -CORRECTANSWER Planning, recording, analyzing, and interpreting
financial information
Evolves to fit users needs
Financial communication (language of business)
, Going concern -CORRECTANSWER The accounting assumption that a business is
expected to operate in to the future
Periodicity -CORRECTANSWER Divides life of the business into regular intervals
Historical Cost -CORRECTANSWER Measure and record the event based on the cost
at the cash or cash-equivalent amount at the time of the accounting event
Business Entity -CORRECTANSWER Difference between separate legal entity and
economic entity
Materiality -CORRECTANSWER When the size of the event influences user's decision
Matching Concept -CORRECTANSWER A concept of accounting in which expenses
are matched with the revenue generated during a period by those expenses.
FASB -CORRECTANSWER Financial Accounting Standards Board
Conceptual framework
Describes how accounting theory will function
GAAP -CORRECTANSWER Generally Accepted Accounting Principles
Set of minimum requirements that must be followed in financial statements
with complete solution|| LATEST UPDATE
2026
Sole Proprietorship -CORRECTANSWER One owner
Few legal requirements
Unlimited liability
Limited life
Partnership -CORRECTANSWER Two or more owners
Partnership agreement
Unlimited liability
Limited life
Mutual agency
Corporation -CORRECTANSWER Multiple owners
Limited liability
Unlimited life
Permission from the state
Double taxation
Risk Assessment -CORRECTANSWER Based on probability of something happening
for outcome
,Risk Averse -CORRECTANSWER Prefer the known over the unknown
Risk Taker -CORRECTANSWER Comfortable with the risk perceived
Planning -CORRECTANSWER Risk management - proactive
Failing to plan -CORRECTANSWER Planning to fail - reactive
Sophisticated user of information -CORRECTANSWER Understands business
environment
Correct operating, investing, and financing decisions
Internal Users -CORRECTANSWER Inside the company AND its decision process
Makes operating, investing, financing decisions for the company
External Users -CORRECTANSWER Outside the company OR its decision process
Makes operating, investing, financing decisions for themselves
Accounting -CORRECTANSWER Planning, recording, analyzing, and interpreting
financial information
Evolves to fit users needs
Financial communication (language of business)
, Going concern -CORRECTANSWER The accounting assumption that a business is
expected to operate in to the future
Periodicity -CORRECTANSWER Divides life of the business into regular intervals
Historical Cost -CORRECTANSWER Measure and record the event based on the cost
at the cash or cash-equivalent amount at the time of the accounting event
Business Entity -CORRECTANSWER Difference between separate legal entity and
economic entity
Materiality -CORRECTANSWER When the size of the event influences user's decision
Matching Concept -CORRECTANSWER A concept of accounting in which expenses
are matched with the revenue generated during a period by those expenses.
FASB -CORRECTANSWER Financial Accounting Standards Board
Conceptual framework
Describes how accounting theory will function
GAAP -CORRECTANSWER Generally Accepted Accounting Principles
Set of minimum requirements that must be followed in financial statements
