ACG 2021 Exam 1 Test Questions and Correct Answers
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Course
ACG 2021
Institution
ACG 2021
Assets=Liabillities+Stockholders' Equity The accounting equation
Financial Statements Income Statement, Statement of Stockholders' Equity, Balance Sheet, Statement of Cash Flow
Common Stock External source of stockholders' equity. Amount invested by stockholders.
Retained Earnings Internal, Cumu...
ACG 2021 Exam 1 Test Questions and
Correct Answers
Assets=Liabillities+Stockholders' Equity ✅The accounting equation
Financial Statements ✅Income Statement, Statement of Stockholders' Equity, Balance
Sheet, Statement of Cash Flow
Common Stock ✅External source of stockholders' equity. Amount invested by
stockholders.
Retained Earnings ✅Internal, Cumulated amount of net income earned over the life of
the company that has been retained by the company.
Balance Sheet ✅Financial statement that presents financial position of the company
on a particular date
What does a Balance Sheet show? ✅Assets, Liabilities,& stockholders' equity
Selling to a customer, purchasing supplies from a vendor, paying salaries to an
employee, & borrowing from a bank. ✅External Transactions
Using supplies already on hand & earning revenues after having received cash in
advance. ✅Internal Transactions
-Assets in the balance sheet
-Money owed to a company by it's debtors ✅Accounts receivable
What does a statement of stockholders' equity include? ✅Net income, dividends for
the period, & ending balance.
Revenue Recognition Principle ✅Revenues should be recognized when goods or
services are provided to customers, not necessarily when cash is received.
Matching Principle ✅when costs are recognized as expensed in the income statement
Accrual Adjustments ✅Needed when a company has earned revenue or incurred and
expense but cash had not been exchanged.
Liquidity ✅How quickly an asset can be converted to cash.
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