Accounting Exam 1 ACTUAL UPDATED QUESTIONS AND CORRECT ANSWERS
Account Balance Difference between total debits and total credits (including the beginning
balance) for an account.
Accounting comprehensive system for collecting, analyzing, and communicating financial
information
, Accounting Cycle for a given time period, the cycle of recording accounting data, adjusting the
accounts, preparing the financial statements, and closing the temporary accounts;
when one accounting cycle ends a new one begins
Accounting Event Economic occurrence that changes a company's assets, liabilities, or equity
Accounting Period Time span covered by the financial statements; normally one year, but may be a
quarter, month or some other time interval
Accrual Accounting recognition of revenue or expense in a period before cash is
exchanged
Accrual Accounting Accounting system which recognizes revenues when earned and expenses when
incurred regardless of when the related cash is exchanged
Adverse Opinion Opinion issued by a certified public accountant that means one or more
departures from GAAP in a company's financial statements are so very material
the auditors believe the financial statements do not fairly represent the company's
status
Adjusting Entry Entry that updates account balances prior to preparing financial statements; a
bookkeeping tool. Adjusting entries never affect the Cash account
Allocations Recognizing expenses by systematically assigning the cost of an asset to periods
of use
American Institute of CPA's National association that serves the education and professional interests of
member of the public accounting profession; membership is voluntary
Annual Reports Document companies publish to provide information, including financial
statements, to stockholders
Asset Exchange Transaction A transaction that decreases one asset and increases another asset; total asset
remain unchanged.
Asset Source Transaction A transaction that increases both an asset and a claim on assets ; the three types
of asset source transactions are aquisitions from owners (equity), borrowing from
creditors (liabilities), or earnings from operations (revenues).
Asset Use Transaction A transaction that decreases both an asset and a claim on assets; 3 types are
distributions, liability payments, or expenses
Asset Economic resource used to produce revenue which is expected to provide future
benefit to the business
Audits the verifying of facts or procedures
Balance Sheet A financial statement that summarizes a company's assets, liabilities and
shareholders' equity at a specific point in time.
Account Balance Difference between total debits and total credits (including the beginning
balance) for an account.
Accounting comprehensive system for collecting, analyzing, and communicating financial
information
, Accounting Cycle for a given time period, the cycle of recording accounting data, adjusting the
accounts, preparing the financial statements, and closing the temporary accounts;
when one accounting cycle ends a new one begins
Accounting Event Economic occurrence that changes a company's assets, liabilities, or equity
Accounting Period Time span covered by the financial statements; normally one year, but may be a
quarter, month or some other time interval
Accrual Accounting recognition of revenue or expense in a period before cash is
exchanged
Accrual Accounting Accounting system which recognizes revenues when earned and expenses when
incurred regardless of when the related cash is exchanged
Adverse Opinion Opinion issued by a certified public accountant that means one or more
departures from GAAP in a company's financial statements are so very material
the auditors believe the financial statements do not fairly represent the company's
status
Adjusting Entry Entry that updates account balances prior to preparing financial statements; a
bookkeeping tool. Adjusting entries never affect the Cash account
Allocations Recognizing expenses by systematically assigning the cost of an asset to periods
of use
American Institute of CPA's National association that serves the education and professional interests of
member of the public accounting profession; membership is voluntary
Annual Reports Document companies publish to provide information, including financial
statements, to stockholders
Asset Exchange Transaction A transaction that decreases one asset and increases another asset; total asset
remain unchanged.
Asset Source Transaction A transaction that increases both an asset and a claim on assets ; the three types
of asset source transactions are aquisitions from owners (equity), borrowing from
creditors (liabilities), or earnings from operations (revenues).
Asset Use Transaction A transaction that decreases both an asset and a claim on assets; 3 types are
distributions, liability payments, or expenses
Asset Economic resource used to produce revenue which is expected to provide future
benefit to the business
Audits the verifying of facts or procedures
Balance Sheet A financial statement that summarizes a company's assets, liabilities and
shareholders' equity at a specific point in time.
