AAAE ACE AIRPORT FINANCE MOD 2 2023 QUESTIONS AND ANSWERS GRADED A+
1. Cash Basis Accounting: records revenues when cash is received and expens- es when cash is paid
2. Accrual Basis Accounting: reporting income when it is earned and expenses when they are incurred, does not matter when cash is e...
AAAE ACE AIRPORT FINANCE MOD 2 2023 QUESTIONS
AND ANSWERS GRADED A+
1. Cash Basis Accounting: records revenues when cash is received and expens
es when cash is paid
2. Accrual Basis Accounting: reporting income when it is earned and expenses
when they are incurred, does not matter when cash is exchanged
3. Modified Accrual Accounting: recognized 1) revenues when the resulting
current financial resources are both measurable and available to be used and 2)
expenditures when they are incurred
4. GAAP Principles: Recognition, measurement, presentation, disclosure
5. Operating Budget: budget for day-to-day expenses covering the span of a yea
6. Capital Budget: budget for major capital, or investment, expenditures covering
up to 5-10 years, also subject to depreciation on accounting records
7. Budget Cycle: Planning, preparation, approval, execution (or expenditure),
analysis, audit
8. Incremental Budget: Increases the previous year's budget by a percentage
9. Zero-Based Budget: allocates resources as if each budget was brand new not
taking into account last year's budget
10. Management by Objectives (MBO): Setting goals and then creating a budget
to meet those goals
11. Activity-Based Budgeting (ABB): Budgeting approach that focuses on the
budgeted cost of the activities necessary to accomplish functions.
1. Identify activities and their cost drivers
2. Forecast number of units of cost driver for required activity level
3. Calculate the cost driver (cost per unit of activity)
12. Statement of Net Position/Assets: Balance Sheet
13. Statement of Revenues, Expenses, and Changes in Net Position/Assets-
: Income Statement
14. Statement of Cash Flows: Statement of Cash Flows
15. Audit - unqualified opinion: Financial statements are presented fairly in
accordance with GAAP
16. Audit - qualified opinion: Auditor is unable to state financial statements
in compliance with GAAP either due to a few misstatements, portions are not
presented in accordance with GAAP, or auditor was unable to audit one or more
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