BUSI 102 FINAL EXAM PRACTICE TEST.
What is the difference between financial and managerial accounting? - CORRECT ANSWER Financial
accounting is the
communication of financial information
about an organization so that parties
(usually outside parties) can make wise
decisions about the organization.
Managerial has to do with inside parties.
What are the two most likely
decisions that outsider parties make
about an organization after studying
financial accounting information? - CORRECT ANSWER what type of ownership -- partial, complete, buy
shares? sell shares?
should a organization give a loan/sell on credit?
What are the three types of legal
recognition that are the most common for
business organizations in the United
States? - CORRECT ANSWER Corporation (S or C) -- has official recognition from state as separate entity
Partnership -- does not have legal recognition
Sole proprietorship -- does not have legal recognition
What type of company can issue shares/capital stock? - CORRECT ANSWER only corporations (issue
capital stock)
, What are the different types of capital stock? - CORRECT ANSWER common stock - holders are entitled
to rites stipulated by state government, gives shareholders voting rights, receive traditional dividends
preferred stock - holders are entitled to rites stipulated on the contract, shareholders do not have voting
rights, receive a different type of dividends
What kinds of companies most often pay dividends? - CORRECT ANSWER Younger businesses that want
to grow often
distribute few (if any) dividends. Older
businesses that are well established tend
to pay larger dividends as profits and
cash balances rise.
Who elects the board of directors? - CORRECT ANSWER stockholders
What are material misstatements? - CORRECT ANSWER financial accounting errors that do make a
difference in a decision that is made
what are the two types of misstatements? - CORRECT ANSWER errors and fraud
Who produces GAAP? IFRS? - CORRECT ANSWER Financial Accounting Standards Board, International
Accounting Standards Board
When was FASB created? - CORRECT ANSWER 1973
What is GAAP? - CORRECT ANSWER generally accepted accounting principles (rules)
What are assets? - CORRECT ANSWER anything you own with future economic benefit (land, patents,
inventory, furnitures/fixures, money receivable, pre-paid stuff, etc.)
What is the difference between financial and managerial accounting? - CORRECT ANSWER Financial
accounting is the
communication of financial information
about an organization so that parties
(usually outside parties) can make wise
decisions about the organization.
Managerial has to do with inside parties.
What are the two most likely
decisions that outsider parties make
about an organization after studying
financial accounting information? - CORRECT ANSWER what type of ownership -- partial, complete, buy
shares? sell shares?
should a organization give a loan/sell on credit?
What are the three types of legal
recognition that are the most common for
business organizations in the United
States? - CORRECT ANSWER Corporation (S or C) -- has official recognition from state as separate entity
Partnership -- does not have legal recognition
Sole proprietorship -- does not have legal recognition
What type of company can issue shares/capital stock? - CORRECT ANSWER only corporations (issue
capital stock)
, What are the different types of capital stock? - CORRECT ANSWER common stock - holders are entitled
to rites stipulated by state government, gives shareholders voting rights, receive traditional dividends
preferred stock - holders are entitled to rites stipulated on the contract, shareholders do not have voting
rights, receive a different type of dividends
What kinds of companies most often pay dividends? - CORRECT ANSWER Younger businesses that want
to grow often
distribute few (if any) dividends. Older
businesses that are well established tend
to pay larger dividends as profits and
cash balances rise.
Who elects the board of directors? - CORRECT ANSWER stockholders
What are material misstatements? - CORRECT ANSWER financial accounting errors that do make a
difference in a decision that is made
what are the two types of misstatements? - CORRECT ANSWER errors and fraud
Who produces GAAP? IFRS? - CORRECT ANSWER Financial Accounting Standards Board, International
Accounting Standards Board
When was FASB created? - CORRECT ANSWER 1973
What is GAAP? - CORRECT ANSWER generally accepted accounting principles (rules)
What are assets? - CORRECT ANSWER anything you own with future economic benefit (land, patents,
inventory, furnitures/fixures, money receivable, pre-paid stuff, etc.)
