FINANCIAL AND MANAGERIAL ACCOUNTING
BY JOHN WILD REVIEW PAPER 2026
COMPLETE QUESTIONS WITH EXPERT
SOLUTIONS AND MARKING SCHEME
◉ What is profit?
Answer: The difference between amounts received from customers
for goods or services and the amounts paid for inputs used to
provide those goods or services.
◉ What are the three types of businesses operating for profit?
Answer: Service, merchandising, and manufacturing businesses.
◉ What is the role of accounting in business?
Answer: To provide information for managers to operate the
business and for other users to assess its economic performance and
condition.
◉ How is accounting defined?
Answer: As an information system that measures, records, and
reports financial information about a company to assist user
decision making.
,◉ What is the importance of ethics in accounting?
Answer: Accountants must behave ethically to ensure the
information they provide is trustworthy and useful for decision
making.
◉ What are generally accepted accounting principles (GAAP)?
Answer: A collection of accounting standards, principles, and
assumptions that define how financial information is reported.
◉ Who has the primary responsibility for developing accounting
standards in the U.S.?
Answer: The Financial Accounting Standards Board (FASB).
◉ What is the accounting equation?
Answer: Assets = Liabilities + Equity.
◉ What is a business transaction?
Answer: An economic event that directly changes an entity's
financial condition or its results of operations.
◉ What are the four basic types of data analytics?
Answer: Descriptive, diagnostic, predictive, and prescriptive
analytics.
, ◉ What characteristics must financial reports possess?
Answer: Relevance and faithful representation.
◉ What does the monetary unit assumption require?
Answer: Financial reports to be expressed in a single money unit or
currency.
◉ What is the time period assumption?
Answer: It allows a company to report its economic activities on a
regular basis for a specific period of time.
◉ What is the going concern assumption?
Answer: It requires that financial reports be prepared assuming the
entity will continue operating into the future.
◉ What is the measurement principle in financial accounting?
Answer: It determines the amount that will be recorded and
reported.
◉ What is the historical cost principle?
Answer: Recording an item at its initial transaction price.
BY JOHN WILD REVIEW PAPER 2026
COMPLETE QUESTIONS WITH EXPERT
SOLUTIONS AND MARKING SCHEME
◉ What is profit?
Answer: The difference between amounts received from customers
for goods or services and the amounts paid for inputs used to
provide those goods or services.
◉ What are the three types of businesses operating for profit?
Answer: Service, merchandising, and manufacturing businesses.
◉ What is the role of accounting in business?
Answer: To provide information for managers to operate the
business and for other users to assess its economic performance and
condition.
◉ How is accounting defined?
Answer: As an information system that measures, records, and
reports financial information about a company to assist user
decision making.
,◉ What is the importance of ethics in accounting?
Answer: Accountants must behave ethically to ensure the
information they provide is trustworthy and useful for decision
making.
◉ What are generally accepted accounting principles (GAAP)?
Answer: A collection of accounting standards, principles, and
assumptions that define how financial information is reported.
◉ Who has the primary responsibility for developing accounting
standards in the U.S.?
Answer: The Financial Accounting Standards Board (FASB).
◉ What is the accounting equation?
Answer: Assets = Liabilities + Equity.
◉ What is a business transaction?
Answer: An economic event that directly changes an entity's
financial condition or its results of operations.
◉ What are the four basic types of data analytics?
Answer: Descriptive, diagnostic, predictive, and prescriptive
analytics.
, ◉ What characteristics must financial reports possess?
Answer: Relevance and faithful representation.
◉ What does the monetary unit assumption require?
Answer: Financial reports to be expressed in a single money unit or
currency.
◉ What is the time period assumption?
Answer: It allows a company to report its economic activities on a
regular basis for a specific period of time.
◉ What is the going concern assumption?
Answer: It requires that financial reports be prepared assuming the
entity will continue operating into the future.
◉ What is the measurement principle in financial accounting?
Answer: It determines the amount that will be recorded and
reported.
◉ What is the historical cost principle?
Answer: Recording an item at its initial transaction price.
