ACC 101 Exam questions and
answers graded A+
What are assets recorded at? - ANS✅✅The historical/original cost because it is objective and
verifiable.
Left side - ANS✅✅Debit
Right side - ANS✅✅Credit
The 3 forms of business entities - ANS✅✅Proprietorship, Partnership, Corperation
What is the definition of a revenue? - ANS✅✅inflows of resources that increase retained earnings
by delivering goods or service to customers
What is the definition of an expense? - ANS✅✅resource outflows that decrease retained earnings
due to operations
What is the difference between internal and external users? - ANS✅✅Financial accounting is for
those externally - that way investors, creditors, government agencies, and the public can make
decisions.
Management accounting is for those internally - information for managers to base their decisions
upon.
What does FASB stand for? - ANS✅✅Financial
Accounting
Standards
Board
What is FASB responsible for? - ANS✅✅GAAP (Generally Accepted Accounting Principles)
What is the accounting equation? - ANS✅✅Assets = Liabilities + Owners Equity
, What are the 3 activities a business engages in? - ANS✅✅Operating -
Investing -
Financing -
What does IFSB stand for? - ANS✅✅International Accounting Standards Board
Who set the worldwide accounting standards? - ANS✅✅IASB ( International Accounting Standards
Board)
What is the primary objective of financial accounting? - ANS✅✅To provide useful information for
decision making.
What makes information relevant? - ANS✅✅It has to be a material that would make the decision
maker decide for or against an idea.
Financial information should be understandable to whom? - ANS✅✅Everyone looking to make
financial decisions
What is on the balance sheet? - ANS✅✅assets, liabilities, and owners equity
What is on the income statement? - ANS✅✅revenues - expenses = net income
What is net income? - ANS✅✅Revenues - Expenses
What are source documents? - ANS✅✅Invoices, checks, time cards, shipping/receiving
documents.
Where does the initial recording of a transaction go? - ANS✅✅journal
After a journal entry is made, where is the next place an entry is posted? - ANS✅✅ledger/general
ledger
What is the purpose of a trial balance? - ANS✅✅To check if total debits equal total credits
answers graded A+
What are assets recorded at? - ANS✅✅The historical/original cost because it is objective and
verifiable.
Left side - ANS✅✅Debit
Right side - ANS✅✅Credit
The 3 forms of business entities - ANS✅✅Proprietorship, Partnership, Corperation
What is the definition of a revenue? - ANS✅✅inflows of resources that increase retained earnings
by delivering goods or service to customers
What is the definition of an expense? - ANS✅✅resource outflows that decrease retained earnings
due to operations
What is the difference between internal and external users? - ANS✅✅Financial accounting is for
those externally - that way investors, creditors, government agencies, and the public can make
decisions.
Management accounting is for those internally - information for managers to base their decisions
upon.
What does FASB stand for? - ANS✅✅Financial
Accounting
Standards
Board
What is FASB responsible for? - ANS✅✅GAAP (Generally Accepted Accounting Principles)
What is the accounting equation? - ANS✅✅Assets = Liabilities + Owners Equity
, What are the 3 activities a business engages in? - ANS✅✅Operating -
Investing -
Financing -
What does IFSB stand for? - ANS✅✅International Accounting Standards Board
Who set the worldwide accounting standards? - ANS✅✅IASB ( International Accounting Standards
Board)
What is the primary objective of financial accounting? - ANS✅✅To provide useful information for
decision making.
What makes information relevant? - ANS✅✅It has to be a material that would make the decision
maker decide for or against an idea.
Financial information should be understandable to whom? - ANS✅✅Everyone looking to make
financial decisions
What is on the balance sheet? - ANS✅✅assets, liabilities, and owners equity
What is on the income statement? - ANS✅✅revenues - expenses = net income
What is net income? - ANS✅✅Revenues - Expenses
What are source documents? - ANS✅✅Invoices, checks, time cards, shipping/receiving
documents.
Where does the initial recording of a transaction go? - ANS✅✅journal
After a journal entry is made, where is the next place an entry is posted? - ANS✅✅ledger/general
ledger
What is the purpose of a trial balance? - ANS✅✅To check if total debits equal total credits
