Financial & Managerial
Accounting Chapter 1
Exam 2026 | Study Guide &
Review
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success|
Updated 2026 Questions and Answers
100% Verified Exam Prep and Comprehensive
Rationales
Included
, Accounting The information system that measures business activities, processes the
information into reports, and communicates the results to decision makers.
Financial Accounting The field of accounting that focuses on providing information for external
decision makers.
Managerial Accounting The field of accounting that focuses on providing information for internal
decision makers.
Creditor Any person or business to whom a business owes money.
Certified Public Accountant (CPAs) Licensed professional accountants who serve the general public.
Controllers Compile financial statements, interact with auditors, and oversee regulatory
reporting.
Financial analysts Review financial data and help to explain the story behind the numbers.
Business systems analysts Accounting knowledge to create computer systems.
Tax accountants Help companies navigate tax laws.
Auditors Perform reviews of companies to ensure compliance to rules and regulations.
Cost accountants Typically work in a manufacturing business. Help analyze accounting data.
Financial Accounting Standards Board (FASB) The private organization that oversees the creation and governance of
accounting standards in the United States.
Securities and Exchange Commission (SEC) U.S. governmental agency that oversees the U.S. financial markets.
Generally Accepted Accounting Principles (GAAP) Accounting guidelines, currently formulated by the Financial Accounting
Standards Board (FASB); the main U.S. accounting rule book.
Economic Entity Assumption An organization that stands apart as a separate economic unit.
Stockholder A person who owns stock in a corporation.
Sole Proprietorship A business with a single owner.
Partnership A business with two or more owners and not organized as a corporation.
Corporation A business organized under state law that is a separate legal entity.
Limited-Liability Company (LLC) A company in which each member is only liable for his or her own actions.
Cost Principle A principle that states that acquired assets and services should be recorded at
their actual cost.
Going Concern Assumption Assumes that the entity will remain in operation for the foreseeable future.
Accounting Chapter 1
Exam 2026 | Study Guide &
Review
|Graded A+ | Guaranteed
success|
Updated 2026 Questions and Answers
100% Verified Exam Prep and Comprehensive
Rationales
Included
, Accounting The information system that measures business activities, processes the
information into reports, and communicates the results to decision makers.
Financial Accounting The field of accounting that focuses on providing information for external
decision makers.
Managerial Accounting The field of accounting that focuses on providing information for internal
decision makers.
Creditor Any person or business to whom a business owes money.
Certified Public Accountant (CPAs) Licensed professional accountants who serve the general public.
Controllers Compile financial statements, interact with auditors, and oversee regulatory
reporting.
Financial analysts Review financial data and help to explain the story behind the numbers.
Business systems analysts Accounting knowledge to create computer systems.
Tax accountants Help companies navigate tax laws.
Auditors Perform reviews of companies to ensure compliance to rules and regulations.
Cost accountants Typically work in a manufacturing business. Help analyze accounting data.
Financial Accounting Standards Board (FASB) The private organization that oversees the creation and governance of
accounting standards in the United States.
Securities and Exchange Commission (SEC) U.S. governmental agency that oversees the U.S. financial markets.
Generally Accepted Accounting Principles (GAAP) Accounting guidelines, currently formulated by the Financial Accounting
Standards Board (FASB); the main U.S. accounting rule book.
Economic Entity Assumption An organization that stands apart as a separate economic unit.
Stockholder A person who owns stock in a corporation.
Sole Proprietorship A business with a single owner.
Partnership A business with two or more owners and not organized as a corporation.
Corporation A business organized under state law that is a separate legal entity.
Limited-Liability Company (LLC) A company in which each member is only liable for his or her own actions.
Cost Principle A principle that states that acquired assets and services should be recorded at
their actual cost.
Going Concern Assumption Assumes that the entity will remain in operation for the foreseeable future.
