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Accounting 201-Exam 2 (uwec) questions with complete solutions
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Accounting 201-Exam 2 (uwec) questions with complete solutions
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Accounting 201-Exam 2 (uwec)Monetary Unit Assumption - correct answer ✔✔only transactions that can be expressed in terms of
money can be included in the accounting records
Economic Entity Assumption - correct answer ✔✔An assumption that every economic entity can be
separately identified and accounted for
Periodicity Assumption - correct answer ✔✔An assumption that the economic life of a business can be
divided into artificial time periods
Going Concern Assumption - correct answer ✔✔The assumption that the company will continue in
operation for the foreseeable future
Cost Principle - correct answer ✔✔A principle that states that acquired assets and services should be
recorded at their actual cost
Full Disclosure Principle - correct answer ✔✔Accounting principle that dictates that companies disclose
circumstances and events that make a difference to financial statement users
How does the Sarbanes-Oxley Act apply to the accounting profession? - correct answer ✔✔Requires
public companies to strengthen audit committees, perform internal controls tests, make directors and
officers personally liable for accuracy of financial statements, and strengthen disclosure
What is the role of the Securities & Exchange Commission? - correct answer ✔✔Is to maintain efficient,
transparent, and effective markets. SEC oversees the involvement and operations of organizations and
individual investors. The Commission monitors securities companies, self-regulatory organizations, and
the stock markets
What is the role of the Financial Accounting Standards Board (FASB)? - correct answer ✔✔Is a private,
non-profit organization standard-setting body whose primary purpose is to establish and improve
Generally Accepted Accounting Principles (GAAP) within the United States in the public's interest
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