D196 Study Guide exam with correct answers
What |is |the |role |and |purpose |of |accounting? |- |VERIFIED |ANSWER✔✔-Accounting |is |used |to |
accumulate, |measure, |and |communicate |financial |information |about |organizations. |This |information |is
|used |to |make |informed |decisions |regarding |resource |usage |and |allocation.
Who |uses |accounting |information |and |why? |- |VERIFIED |ANSWER✔✔-Managerial |Accounting: |Internal |
decision |making |(managers, |CEO's, |supervisors, |etc.)
Financial |Accounting: |External |user |benefit |(stakeholders, |investors, |tax |authorities, |etc.)
What |are |important |influences |on |Accounting? |- |VERIFIED |ANSWER✔✔-Development |of |GAAP |by |
FASB |in |the |U.S. |and |by |the |IASB |worldwide. |International |business |considerations, |ethical |
considerations.
What |is |the |role |of |ethics |in |Accounting? |- |VERIFIED |ANSWER✔✔-Accountants |are |seen |by |the |public |
as |ensuring |that |misrepresentation |of |financial |information |does |not |occur.
What |is |the |PCAOB |and |what |does |it |do? |- |VERIFIED |ANSWER✔✔-PCAOB |is |the |Public |Company |
Accounting |Oversight |Board, |and |they |oversee |audits |of |public |companies. |Created |by |the |SEC |after |
passage |of |the |Sarbanes |Oxley |Act |of |2002 |to |restore |public |confidence.
Explain |the |accounting |cycle. |- |VERIFIED |ANSWER✔✔-1. |Analyze |transactions
2. |Record |effects |of |transactions
3. |Summarize |effects |of |transactions
3a. |Post |journal |entries
3b. |Prepare |trial |balance
4. |Prepare |financial |reports
4a. |Adjust |journal |entries
4b. |Prepare |financial |statements
4c. |Close |books
What |is |the |basic |accounting |equation? |- |VERIFIED |ANSWER✔✔-Assets |(resources, |cash, |equipment)
=
Liabilities |(method |of |financing |req. |repayment)
| +|
Owner's |Equity |(method |of |financing |NOT |req. |repayment)
What |is |the |role |and |purpose |of |accounting? |- |VERIFIED |ANSWER✔✔-Accounting |is |used |to |
accumulate, |measure, |and |communicate |financial |information |about |organizations. |This |information |is
|used |to |make |informed |decisions |regarding |resource |usage |and |allocation.
Who |uses |accounting |information |and |why? |- |VERIFIED |ANSWER✔✔-Managerial |Accounting: |Internal |
decision |making |(managers, |CEO's, |supervisors, |etc.)
Financial |Accounting: |External |user |benefit |(stakeholders, |investors, |tax |authorities, |etc.)
What |are |important |influences |on |Accounting? |- |VERIFIED |ANSWER✔✔-Development |of |GAAP |by |
FASB |in |the |U.S. |and |by |the |IASB |worldwide. |International |business |considerations, |ethical |
considerations.
What |is |the |role |of |ethics |in |Accounting? |- |VERIFIED |ANSWER✔✔-Accountants |are |seen |by |the |public |
as |ensuring |that |misrepresentation |of |financial |information |does |not |occur.
What |is |the |PCAOB |and |what |does |it |do? |- |VERIFIED |ANSWER✔✔-PCAOB |is |the |Public |Company |
Accounting |Oversight |Board, |and |they |oversee |audits |of |public |companies. |Created |by |the |SEC |after |
passage |of |the |Sarbanes |Oxley |Act |of |2002 |to |restore |public |confidence.
Explain |the |accounting |cycle. |- |VERIFIED |ANSWER✔✔-1. |Analyze |transactions
2. |Record |effects |of |transactions
3. |Summarize |effects |of |transactions
3a. |Post |journal |entries
3b. |Prepare |trial |balance
4. |Prepare |financial |reports
4a. |Adjust |journal |entries
4b. |Prepare |financial |statements
4c. |Close |books
What |is |the |basic |accounting |equation? |- |VERIFIED |ANSWER✔✔-Assets |(resources, |cash, |equipment)
=
Liabilities |(method |of |financing |req. |repayment)
| +|
Owner's |Equity |(method |of |financing |NOT |req. |repayment)
