Fundamentals of Accounting Final Exam Questions And All Correct Answers.
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Course
Fundamentals of Accounting
Institution
Fundamentals Of Accounting
What is a balance sheet? - Answer Represents the economic resources of the company and the finances of those resources
Assets=Liabilities + Stockholder's Equity
What is an income statement? - Answer A report of a company's ability to sell goods for more than the cost to produce and sell
...
Fundamentals of Accounting Final Exam
Questions And All Correct Answers.
What is a balance sheet? - Answer Represents the economic resources of the company and the finances
of those resources
Assets=Liabilities + Stockholder's Equity
What is an income statement? - Answer A report of a company's ability to sell goods for more than the
cost to produce and sell
Revenue-Expenses=Net Income
What is a statement of stockholder's equity and what does it include? - Answer Company reports
additional contribution or payments to investors and the amount of income the company reinvest in
future growth.
Includes:
-Beginning of the year retained earnings
-Net Income
-Dividends
-End of the year retained earnings
What is a statement of cash flows and what does it include? - Answer Where the company reports its
ability to generate cash and how it was used
, What is the GAAP? - Answer The standard way for a company to prepare their financial statement
What is the Securities and Exchange Commission (SEC)? - Answer The governing body in charge of
companies financial statements and paperwork companies issuing stock to the public must provide to
stockholders. Goal is to protect investors and maintain integrity of securities market
What is the Financial Accounting Standard Board (FASB)? - Answer Private, non-profit organization
whose primary purpose is to establish and improve GAAP within the US's public interest.
What is an audit? - Answer An examination of the financial reports to ensure that they represent what
they claim and conform with GAAP
What is the objective of financial reporting? - Answer The primary objective is to provide accurate
financial information to external users such as potential investors, stockholders, lenders, etc.
What are the qualitative characteristics of useful information? - Answer -Relevant Info: info that can
influence a decision; it is timely and has predictive and/or feedback value
-Faithful representation: requires that the info be complete, neutral, and free from error
What is the separate entity assumption? - Answer States that business transactions are separate from
the transactions of the owner
What is the going concern assumption? - Answer States that the businesses are assumed to continue to
operate into the forseeeable future
What is the monetary unit assumption? - Answer States that the accounting info should be measured
and reported in the national monetary unit without any adjustment for changes in purchasing power
What is the mixed-attribute measurement model? - Answer Applied to measuring different assets and
liabilities of the balance sheet
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