WSP ACCOUNTING PRACTICE FOR EXAMS
|QUESTIONS WITH ANSWERS VERIFIED 100%
CORRECT|
prepaid expenses - ✔✔current asset; payments made in advance for goods and
services expected to be provided on a later date (utilities, insurance, rent)
PP&E - ✔✔non-current asset; fixed assets such as land, buildings, vehicles, and
machinery used to manufacture or provide the company's services and products
intangible assets - ✔✔non current asset; non-physical, acquired assets (patents,
trademarks, IP)
goodwill - ✔✔intangible asset created to capture the excess of the purchase price
over the fair market value of an acquired asset
accounts payable - ✔✔current liability; unpaid bills to suppliers and vendors for
services/product already received but were paid for on credit
accrued expenses - ✔✔current liability; incurred expenses such as employee
compensation or utilities that have not been paid, often due to the invoice not being
received
short term debt - ✔✔current liability; debt payments coming due within 12 months,
current portion of long term debt also included
deferred revenue - ✔✔current or non-current liability; unearned revenue received in
advance for goods and services not yet delivered to the customer
,deferred taxes - ✔✔non-current liability; tax expense recognized under GAAP not yet
paid because of temporary timing differences between book and tax accounting
long term debt - ✔✔non-current liability; any debt capital with a maturity exceeding
12 months
lease obligations - ✔✔non-current liability; long term contractual agreements
allowing company to lease PPE for a specific time period
common stock - ✔✔a share of ownership in a company; can be issued when raising
capital from outside investor in exchange for equity
APIC - ✔✔the amount received in excess over the par value from the sale of
preferred or common stock
preferred stock - ✔✔a form of equity considered a hybrid investment (features of
both common stock and debt)
treasury stock - ✔✔shares that had previously been issued but were repurchased by
company in share buyback and can no longer be traded
retained earnings - ✔✔cumulative amount of earnings since the company was
formed, less any dividends paid out
other comprehensive income - ✔✔foreign currency translation adjustments and
unrealized gains or losses on available for sale securities
, cash from operations - ✔✔starts with net income and adds back non-cash expenses
such as D+A, then makes adjustments for changes in working capital
cash from investing - ✔✔accounts for Capex and any business acquisitions or
divestitures
cash from financing - ✔✔shows net cash impact of raising capital from issuances of
equity or debt, share repurchases, repayments of debt, and dividend payments
revenue recognition principle - ✔✔revenue is recorded in the same period the good
or service was delivered whether or to cash was collected from the customer
matching principle - ✔✔expenses associated with the production/delivery of a good
or service must be recorded in the same period when the revenue was earned
cash basis accounting - ✔✔revenues and expenses are recognized once cash is
received or spent (regardless of when product or service was delivered to customer)
accrual accounting - ✔✔revenue recognition is based on when it's earned and
expenses associated with that revenue are incurred in the same period
operating expenses - ✔✔expenses not directly associated withe the production of
goods or services offered (indirect costs)
capitalization - ✔✔occurs when expenditures on fixed and intangible assets are
expected to benefit the firm for more than one year
expensing - ✔✔occurs when benefits of expenditure are short term
|QUESTIONS WITH ANSWERS VERIFIED 100%
CORRECT|
prepaid expenses - ✔✔current asset; payments made in advance for goods and
services expected to be provided on a later date (utilities, insurance, rent)
PP&E - ✔✔non-current asset; fixed assets such as land, buildings, vehicles, and
machinery used to manufacture or provide the company's services and products
intangible assets - ✔✔non current asset; non-physical, acquired assets (patents,
trademarks, IP)
goodwill - ✔✔intangible asset created to capture the excess of the purchase price
over the fair market value of an acquired asset
accounts payable - ✔✔current liability; unpaid bills to suppliers and vendors for
services/product already received but were paid for on credit
accrued expenses - ✔✔current liability; incurred expenses such as employee
compensation or utilities that have not been paid, often due to the invoice not being
received
short term debt - ✔✔current liability; debt payments coming due within 12 months,
current portion of long term debt also included
deferred revenue - ✔✔current or non-current liability; unearned revenue received in
advance for goods and services not yet delivered to the customer
,deferred taxes - ✔✔non-current liability; tax expense recognized under GAAP not yet
paid because of temporary timing differences between book and tax accounting
long term debt - ✔✔non-current liability; any debt capital with a maturity exceeding
12 months
lease obligations - ✔✔non-current liability; long term contractual agreements
allowing company to lease PPE for a specific time period
common stock - ✔✔a share of ownership in a company; can be issued when raising
capital from outside investor in exchange for equity
APIC - ✔✔the amount received in excess over the par value from the sale of
preferred or common stock
preferred stock - ✔✔a form of equity considered a hybrid investment (features of
both common stock and debt)
treasury stock - ✔✔shares that had previously been issued but were repurchased by
company in share buyback and can no longer be traded
retained earnings - ✔✔cumulative amount of earnings since the company was
formed, less any dividends paid out
other comprehensive income - ✔✔foreign currency translation adjustments and
unrealized gains or losses on available for sale securities
, cash from operations - ✔✔starts with net income and adds back non-cash expenses
such as D+A, then makes adjustments for changes in working capital
cash from investing - ✔✔accounts for Capex and any business acquisitions or
divestitures
cash from financing - ✔✔shows net cash impact of raising capital from issuances of
equity or debt, share repurchases, repayments of debt, and dividend payments
revenue recognition principle - ✔✔revenue is recorded in the same period the good
or service was delivered whether or to cash was collected from the customer
matching principle - ✔✔expenses associated with the production/delivery of a good
or service must be recorded in the same period when the revenue was earned
cash basis accounting - ✔✔revenues and expenses are recognized once cash is
received or spent (regardless of when product or service was delivered to customer)
accrual accounting - ✔✔revenue recognition is based on when it's earned and
expenses associated with that revenue are incurred in the same period
operating expenses - ✔✔expenses not directly associated withe the production of
goods or services offered (indirect costs)
capitalization - ✔✔occurs when expenditures on fixed and intangible assets are
expected to benefit the firm for more than one year
expensing - ✔✔occurs when benefits of expenditure are short term
