ETS Accounting Exam Study Guide Questions & Answers 2024/2025
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ETS Accounting
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ETS Accounting
ETS Accounting Exam Study Guide Questions & Answers 2024/2025
Helpful in determining past and future performance, contains revenues and expenses: A) Income statement, B) Retained earnings statement, C) Balance Sheet, D) Statement of cash flows - ANSWERSA) Income Statement
Defines Assets = l...
ETS Accounting Exam Study Guide
Questions & Answers 2024/2025
Helpful in determining past and future performance, contains revenues and expenses: A) Income
statement, B) Retained earnings statement, C) Balance Sheet, D) Statement of cash flows - ANSWERSA)
Income Statement
A) Income statement, B) Retained earnings statement, C) Balance Sheet, D) Statement of cash flows -
ANSWERSC) Balance Sheet
Shows the amounts and causes of changes in retained earnings during the stated period, Solved by
starting retained earnings + net income - dividends paid:
A) Income statement, B) Retained earnings statement, C) Balance Sheet, D) Statement of cash flows -
ANSWERSB) Retained Earnings Statement
Which has been adopted as the standard financial statement?
A) Income statement, B) Retained earnings statement, C) Balance Sheet, D) Statement of cash flows -
ANSWERSD) Statement of cash flows
True or False: Costs that attach to the units that are produced are not reported as expenses until the
goods are sold - ANSWERSTrue
What is Lifo? - ANSWERSrecording the last units purchased as the first goods sold
What is fifo? - ANSWERSRecording the oldest units will be first to be sold
A formal written statement of management's plans for a specific future time period expressed in
financial terms - ANSWERSA budget
, A system of cost accounting which is designed to find out how much should be the cost of a product
under the existing conditions - ANSWERSStandard costing
What Assumption states that the business will remain in operation for the
What is the full disclosure principle? - ANSWERSRequires that all circumstances and events that would
make a difference to financial statement users should be disclosed
Any factor whose change "causes" a change in the total cost of a related - ANSWERSCost Driver
Costs that can be traced to a given cost object (product, department, etc.)
in an economically feasible way. - ANSWERSDirect Cost
Costs that cannot be traced to a given cost object in an economically
feasible way. These costs are also known as "overhead". - ANSWERSIndirect Costs
Explain Lifo - ANSWERSLIFO-recording the last units purchased as the first goods sold
In times of inflation, LIFO results in higher reported cost of goods sold
and thus lower income and retained earnings
This leads to lower taxes, which results in higher net income
Results in lower reported assets and equity
In the case of LIFO, the business will appear less well off
Explain Fifo - ANSWERSIn times of inflation, FIFO results in lower reported cost of goods sold
and thus higher income and higher retained earnings
This leads to higher taxes, which results in lower net income
Results in higher reported assets and equity
Business will appear better off than in LIFO
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