PRACTICE ASSESSMENT FULL QUESTIONS
AND ANSWERS COMPLETE REVISION GUIDE
GRADED A PLUS 40 ITEMS
◉ External Users.
Answer: Those outside of a company who want financial information
about it
◉ Financial Accounting.
Answer: Pertains to external users
◉ Generally Accepted Accounting Principles.
Answer: (Standards) Common set of standards on how to report
economic events
◉ Financial Accounting Standards Board.
Answer: (Sets) Body that sets standard in the US
◉ Securities and Exchange Commission.
Answer: (Enforces) Makes sure companies are following GAAP, set
by FASB
, ◉ Relevance.
Answer: Capable of changing a decision
◉ Faithful Representation.
Answer: Descriptions are factual
◉ Principles.
Answer: Historical Cost, Fair Value
◉ Historical Cost Principle.
Answer: Companies record assets at their original cost
◉ Fair Value Principle.
Answer: Companies record assets and liabilities at the price they'd
receive to settle it
◉ Assumptions.
Answer: Monetary Unit Assumption, Economic Entity Assumption
◉ Monetary Unit Assumption.