ACG 5026 Exam 1 Questions and
Answers 100% Pass
What does the field of accounting encompass?
The task of documenting, summarizing, and interpreting financial activities.
What are the traits of financial accounting?
Reports designed for external stakeholders.
Must comply with GAAP.
...
✔✔The task of documenting, summarizing, and interpreting financial activities.
What are the traits of financial accounting?
✔✔Reports designed for external stakeholders.
✔✔Must comply with GAAP.
✔✔Focuses on past financial data.
✔✔Provides aggregate information.
What are the attributes of managerial accounting?
✔✔Information tailored for internal management.
✔✔Not restricted by GAAP, allowing creative approaches.
✔✔Oriented towards future planning.
✔✔Delivers detailed data.
✔✔Produced only if the benefits justify the costs.
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,Who utilizes financial accounting data?
✔✔Investors and market analysts.
✔✔Lenders and creditors.
✔✔Suppliers and buyers.
Who depends on managerial accounting data?
✔✔Executive management.
✔✔Marketing divisions.
✔✔Production and operations teams.
What decisions are influenced by financial accounting?
✔✔Deciding on stock transactions.
✔✔Evaluating creditworthiness.
✔✔Making procurement or sales decisions.
What decisions are influenced by managerial accounting?
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,✔✔Creating new business strategies.
✔✔Determining the launch of new products.
✔✔Overseeing daily operations.
What key information is required for financial accounting?
✔✔Revenue and expenses.
✔✔Cash inflows and outflows.
✔✔Data on assets and liabilities.
What essential information is needed for managerial accounting?
✔✔Sales and cost metrics for products.
✔✔Performance evaluations of departments.
✔✔Budgetary and quality assurance reports.
Three forms of Business Ownership ✔✔Corporation
Sole Proprietorship
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, Partnership
What is a corporation? ✔✔A legal entity with A large number of owners or shareholders not
involved in managing day-to-day operations of the company
Corporate Advantages ✔✔Limited liability
Ability to raise capital
Ability to separate ownership from management
Ease of transferability of ownership
Corporate Disadvantages ✔✔Double taxation (corporate profits and dividends/capital gains
Paperwork and formalities
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