Financial Accounting and Reporting Chapter 2 Exam Questions with 100% Correct Answers
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Course
Financial
Institution
Financial
Financial Accounting and Reporting
Chapter 2 Exam Questions with 100%
Correct Answers
Separate entity assumption - states that business transactions are
separate from the transactions of the owners
going concern assumption - states that businesses are assumed to
continue to operate into the f...
by one party for assets services or promises to pay liabilities from one or
more other parties
internal events - ✔✔These include certain events that are not exchanges
between the business and other parties but nevertheless have a direct and
measurable effect on the entity. Examples include using up insurance paid
in advance and using buildings and equipment over several years.
account - ✔✔a standardized format that organizations use to accumulate
the dollar effect of transactions on each financial statement item
transaction analysis - ✔✔the process of studying a transaction to determine
its economic effect on the business in terms of the accounting equation
par value - ✔✔the nominal value per share of stock as specified in the
corporate charter
common stock - ✔✔the basic voting stock issued by a corporation
additional paid-in capital ( paid in capital, contributed capital in excess of
par) - ✔✔the amount of contributed capital less the par value of the stock
accounting cycle - ✔✔the process used by entities to analyze and record
transactions, adjust the records at the end of the period, prepare financial
statements, and prepare the records of the next cycle
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