ACG 5026 Midterm Exam Questions and Complete Solutions
14 views 0 purchase
Course
ACG 5026
Institution
ACG 5026
Three general uses of accounting Financial reporting and external performance evaluations
Managerial decision making
Managerial planning, control & internal performance evaluations
Corporate Advantages Limited liability
Ability to raise capital
Ability to separate ownership from management
Tr...
ACG 5026 Midterm Exam Questions and
Complete Solutions
Three general uses of accounting ✅Financial reporting and external performance
evaluations
Managerial decision making
Managerial planning, control & internal performance evaluations
Corporate Advantages ✅Limited liability
Ability to raise capital
Ability to separate ownership from management
Transferability of ownership
Corporate Disadvantages ✅Double taxation (corporate profits and dividends/capital
gains
Paperwork and formalities
What are the three basic business activities ✅Operational
Investing
Financing
How did cash (on the balance sheet) change? Look at... ✅Statement of Cash Flows
How did equity (on the balance sheet) change? Look at... ✅Statement of Stockholders'
Equity
How did operations affect retained earnings (on the balance sheet)? Look at...
✅Statement of Income
Four Financial Statements ✅Balance Sheet
Statement of Cash Flows
Statement of Equity
, Income Statement
Generally Accepted Accounting Principles (GAAP) ✅Standards and accepted
practices designed to guide the preparation of financial statements
Based on underlying principles
Enables external users to rely on audited financial statements
The SEC's Authority ✅Regulates the issuance and trading of securities in the U.S.
Who must report to the SEC? ✅Companies with more than $10 million of assets and
whose securities are held by more than 500 owners must file annual and other periodic
reports.
Financial Accounting Standards Board (FASB) ✅Currently establishes accounting
standards in the U.S. (GAAP).
Developed a Conceptual Framework to serve as a guide for accounting issues not
covered by standards
Auditor's Report ✅A statement to the board of directors of the company and to the
shareholders of the company by an independent auditor.
What does an audit report express? ✅An opinion as to whether the financial
statements present fairly the financial activities of the company and whether the
financials were prepared in accordance with GAAP.
A "clean" audit opinion indicates... ✅that the auditors do believe that the financial
statements present fairlythe economic conditions of the firm. It does NOT state that the
statements are "accurate."
Balance Sheets is reported at a... ✅specific point in time
Statement of cash flows, equity and income statement are reported at a ✅period of
time
Reporting Periods ✅Can be annual, semiannual, quarterly, or monthly reporting
periods
Fiscal Year ✅A one-year reporting period
Often called an accounting year
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller twishfrancis. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $8.99. You're not tied to anything after your purchase.
