Financial Accounting Exam 1 (Chapters 1-4) Study Guide.
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Course
Financial Accounting
Institution
Financial Accounting
Financial Accounting Exam 1 (Chapters 1-4)
Study Guide.
Revenue should not be recognized until: - answerthe earnings process is complete and
collection is reasonably assured
The matching principle is: - answerAn accrual accounting principle
A cause and effect relationship between revenue and e...
Financial Accounting Exam 1 (Chapters 1-4)
Study Guide.
Revenue should not be recognized until: - answer✔the earnings process is complete and
collection is reasonably assured
The matching principle is: - answer✔An accrual accounting principle
A cause and effect relationship between revenue and expense is best exemplified by: -
answer✔Units of production depreciation expense
The expense that least fits a cause and effect relationship for matching revenues and expenses
would be: - answer✔Advertising expense (not COGS, units of production depreciation, or sales
commission)
TRUE OR FALSE: Purchased $8200 of inventory on account
TRUE OR FALSE: Paid for inventory purchased previously
Accounts Payable 8200
Cash 8200 - answer✔True
Users of financial reports include all the following: - answer✔Creditors, Government Agencies,
Unions
The process by identifying, measuring, analyzing, and communicating financial information
needed by management to plan, evaluate, and control an organization's operations is called: -
answer✔Managerial Accounting
Which of the following is not an objective of financial reporting: - answer✔Provide information
on the liquidation value of an enterprise.
The actual objectives include providing info that is
- useful in investment and credit decisions
- about enterprise resources, claims to those resources, and changes to them
- useful in assessing cash flow prospects
Accrual accounting is used because: - answer✔It provides a better indication of ability to
generate cash flows than the cash basis
The role of SEC in the formulation of accounting principles can be described as: -
answer✔Sometimes primary and sometimes secondary
The body that has the power to prescribe the accounting principles and standards to be employed
by companies that fall under its jurisdiction is the: - answer✔FASB
Companies that are listed on the stock exchange are required to submit their financial statements
to the: - answer✔SEC
The FASB employs a "due process" system which: - answer✔Enables interested parties to
express their views on issues under consideration
The purpose of Statements of Financial Accounting Concepts is to: - answer✔Form a conceptual
framework for solving existing and emerging problems
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