AOF NAFTRACK ACCOUNTING FINAL EXAM
QUESTIONS AND CORRECT ANSWERS
IRS - CORRECT ANSWERS Internal revenue service; collects taxes and has powers of
enforcements
FASB - CORRECT ANSWERS Financial Accounting Standards Board; Private, nonprofit that
develops standards for GAAP
GAAP - CORRECT ANSWERS General Accenpting Accounting Principles; Accounting
guidelines used to create laws to protect individuals
SEC - CORRECT ANSWERS Securities Exchange Commission; Protects investors and helps
markets run smoothly
AICPA - CORRECT ANSWERS American Institute of CPAs; Creates and administers CPA
exam and audit standards; develops behavioral guidelines
PCAOB - CORRECT ANSWERS Public Company Accounting Oversight Board; Protects
investors and oversees audits of public companies
IFRS - CORRECT ANSWERS International Financial Reporting Standards; Eases financial
reporting from EU countries
Principle of Regularity - CORRECT ANSWERS principle to ensure consistency (same
principles as always)
Principle of Sincerity - CORRECT ANSWERS statements are honest and accurate
, Principle of Permanence of Methods - CORRECT ANSWERS Analysis of composition
Principles of Noncompensation - CORRECT ANSWERS complete discolsure of truth, no
fake items
Principle of Prudence - CORRECT ANSWERS do not make statements look better than they
are; use caution with transactions
Principle of Continuity - CORRECT ANSWERS Record transactions as if company is always
going to be in business
Principle of Periodicity - CORRECT ANSWERS accounting is broken into periods of time of
same length each transaction accounted for in every period or broken up into multiple
Principle of Method - CORRECT ANSWERS same accounting method must be used
Accounting Cycle - CORRECT ANSWERS 1. Collect and analyze source documents
2. Journalize transactions
3. Post to general ledger
4. Prepare a trial balance
5. Prepare financial statements
6. Close temporary accounts
7. Prepare post-closing trial balance
Liabilities - CORRECT ANSWERS Accounts payable, notes payable, morgage
QUESTIONS AND CORRECT ANSWERS
IRS - CORRECT ANSWERS Internal revenue service; collects taxes and has powers of
enforcements
FASB - CORRECT ANSWERS Financial Accounting Standards Board; Private, nonprofit that
develops standards for GAAP
GAAP - CORRECT ANSWERS General Accenpting Accounting Principles; Accounting
guidelines used to create laws to protect individuals
SEC - CORRECT ANSWERS Securities Exchange Commission; Protects investors and helps
markets run smoothly
AICPA - CORRECT ANSWERS American Institute of CPAs; Creates and administers CPA
exam and audit standards; develops behavioral guidelines
PCAOB - CORRECT ANSWERS Public Company Accounting Oversight Board; Protects
investors and oversees audits of public companies
IFRS - CORRECT ANSWERS International Financial Reporting Standards; Eases financial
reporting from EU countries
Principle of Regularity - CORRECT ANSWERS principle to ensure consistency (same
principles as always)
Principle of Sincerity - CORRECT ANSWERS statements are honest and accurate
, Principle of Permanence of Methods - CORRECT ANSWERS Analysis of composition
Principles of Noncompensation - CORRECT ANSWERS complete discolsure of truth, no
fake items
Principle of Prudence - CORRECT ANSWERS do not make statements look better than they
are; use caution with transactions
Principle of Continuity - CORRECT ANSWERS Record transactions as if company is always
going to be in business
Principle of Periodicity - CORRECT ANSWERS accounting is broken into periods of time of
same length each transaction accounted for in every period or broken up into multiple
Principle of Method - CORRECT ANSWERS same accounting method must be used
Accounting Cycle - CORRECT ANSWERS 1. Collect and analyze source documents
2. Journalize transactions
3. Post to general ledger
4. Prepare a trial balance
5. Prepare financial statements
6. Close temporary accounts
7. Prepare post-closing trial balance
Liabilities - CORRECT ANSWERS Accounts payable, notes payable, morgage
