ACG 3131 Exam1 Questions and
Answers Graded A+
Which major financial statement shows a company’s financial position at a specific point in
time?
Balance Sheet
Which financial statement details a company’s revenues and expenses over a period of time?
Income Statement
What docume...
management forecasts, descriptions of social or environmental impact
How does accounting facilitate the efficient allocation of scarce resources?
✔✔By providing accurate, relevant, and timely information to managers, investors, and
creditors, allowing for optimal resource allocation and measurement of efficiency and financial
health.
What are the key objectives of financial accounting?
✔✔To offer information that is useful for investment and lending decisions, helpful in evaluating
cash flow potential, and informative about the company's resources, claims to those resources,
and changes therein.
Why are accounting standards necessary?
✔✔To create a consistent set of guidelines that are widely accepted and practiced, enabling
easier comparison and understanding of financial statements across different companies.
Which federal agency oversees the enforcement of accounting standards for publicly traded
companies?
2
, ✔✔Securities and Exchange Commission (SEC)
What requirement does the SEC impose on companies under its jurisdiction?
✔✔To adhere to GAAP
What organization originally set accounting standards through the Committee on Accounting
Procedure and Accounting Principles Board?
✔✔American Institute of Certified Public Accountants (AICPA)
Who established the Accounting Principles Board?
✔✔American Institute of Certified Public Accountants (AICPA)
What were the formal documents issued by the Accounting Principles Board called?
✔✔APB Opinions
What organization is responsible for developing and improving financial accounting and
reporting standards?
✔✔Financial Accounting Standards Board (FASB)
3
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