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ACCT 211-Liberty University EXAM 1
Study Guide 100% Verified.
Importance of Accounting - Answer✔Identifying, Recording, Communicating
Users of Financial Information - Answer✔1. Internal
2. External
Internal Users - Answer✔Internal users of accounting information ARE directly involved in
managing and operating an organization.
External Users - Answer✔External users of accounting information are NOT directly involved in
running the organization
3 Parts of the Fraud Triangle - Answer✔Opportunity-Envision a way to commit fraud with a low
perceived risk of getting caught
Rationalization-Fails to see the criminal nature of the fraud or justifies the action
Financial Pressure-Must have some pressure to commit fraud, like unpaid bills
Dodd-Frank Wall Street Reform and Consumer Protection Act - Answer✔This act was designed
to:
1. promote accountability and transparency in the financial system,
2. put an end to the notion of "too big to fail,"
3. protect the taxpayer by ending bailouts, and
4. protect consumers from abusive financial services.
1
, ©EVERLY 2025 ALL RIGHTS RESERVED
GAAP - Answer✔Generally Accepted Accounting Principles
aims to make information relevant, reliable, and comparable
IFRS - Answer✔International Financial Reporting Standards
Identify preferred accounting practices
IASB - Answer✔International Accounting Standards Board
An independent group (consisting of individuals from many countries), issues International
Financial Reporting Standards (IFRS)
Conceptual Framework - Answer✔
Principles of Accounting - Answer✔1. Measurement Principle
(or Cost Principle)
Accounting information is based on actual cost. Actual cost is considered objective.
2. Revenue Recognition Principle
a. Recognize revenue when it is earned.
b. Proceeds need not be in cash.
c. Measure revenue by cash received plus cash value of items received
3. Expense Recognition Principle
(or Matching Principle): A company must record its expenses incurred to generate the revenue
reported.
4. Full Disclosure Principle: A company is required to report the details behind financial
statements that would impact users' decisions
Accounting Assumptions - Answer✔1.Going-Concern Assumption
2
ACCT 211-Liberty University EXAM 1
Study Guide 100% Verified.
Importance of Accounting - Answer✔Identifying, Recording, Communicating
Users of Financial Information - Answer✔1. Internal
2. External
Internal Users - Answer✔Internal users of accounting information ARE directly involved in
managing and operating an organization.
External Users - Answer✔External users of accounting information are NOT directly involved in
running the organization
3 Parts of the Fraud Triangle - Answer✔Opportunity-Envision a way to commit fraud with a low
perceived risk of getting caught
Rationalization-Fails to see the criminal nature of the fraud or justifies the action
Financial Pressure-Must have some pressure to commit fraud, like unpaid bills
Dodd-Frank Wall Street Reform and Consumer Protection Act - Answer✔This act was designed
to:
1. promote accountability and transparency in the financial system,
2. put an end to the notion of "too big to fail,"
3. protect the taxpayer by ending bailouts, and
4. protect consumers from abusive financial services.
1
, ©EVERLY 2025 ALL RIGHTS RESERVED
GAAP - Answer✔Generally Accepted Accounting Principles
aims to make information relevant, reliable, and comparable
IFRS - Answer✔International Financial Reporting Standards
Identify preferred accounting practices
IASB - Answer✔International Accounting Standards Board
An independent group (consisting of individuals from many countries), issues International
Financial Reporting Standards (IFRS)
Conceptual Framework - Answer✔
Principles of Accounting - Answer✔1. Measurement Principle
(or Cost Principle)
Accounting information is based on actual cost. Actual cost is considered objective.
2. Revenue Recognition Principle
a. Recognize revenue when it is earned.
b. Proceeds need not be in cash.
c. Measure revenue by cash received plus cash value of items received
3. Expense Recognition Principle
(or Matching Principle): A company must record its expenses incurred to generate the revenue
reported.
4. Full Disclosure Principle: A company is required to report the details behind financial
statements that would impact users' decisions
Accounting Assumptions - Answer✔1.Going-Concern Assumption
2
