Final

Question 1

The preservation of a systematic, quantitative record of an activity.

Answer 1

Bookkeeping

Question 2

A system that provides quantitative information, primarily financial in nature, about economic entities that is intended to be useful in making economic decisions.

Answer 2

Accounting

Question 3

Accounting systems designed for internal use.

Answer 3

Managerial Accounting

Question 4

Accounting information provided to, and used by, external users.

Answer 4

Financial Accounting

Question 5

The general purpose information used by financial accounting that includes the balance sheet, income statement, and statement of cash flows.

Answer 5

Financial Statements

Question 6

A listing of an organization’s assets, liabilities, and owner’s equity at a certain point in time.

Answer 6

Balance Sheet

Question 7

Reports the amount of net income earned by a company during a specific period.

Answer 7

Income statement

Question 8

The excess of a company’s revenues over its expenses.

Answer 8

Net Income

Question 9

Reports the amount of cash collected and paid out by a company in the following types of activities: operating, investing, and financing.

Answer 9

Statement of Cash Flows

Question 10

A private body established in 1973 and supported by the joint efforts of the US business community, financial analysts, and practicing accountants.

Answer 10

Financial Accounting Standards Board (FASB)

Question 11

An independent federal government agency responsible for protecting investors, maintaining the fair and orderly functioning of the US securities market, and facilitating capital formation.

Answer 11

Securities and Exchange Commission (SEC)

Question 12

The set of principles and practices that a corporation uses to regulate the relationship between the shareholders and the managers hired by the board of directors.

Answer 12

Corporate Governance

Question 13

A person that has taken a minimum number of college-level accounting classes, has passed the CPA exam, and has met other requirements set by their state.

Answer 13

Certified Public Accountant (CPA)

Question 14

Created by the Sarbanes-Oxley Act, it is a private, non-profit organization that serves as an arm of the SEC in registering, inspecting, and disciplining the auditors of all publicly-traded companies.

Answer 14

Public Company Accounting Oversight Board (PCAOB)

Question 15

An independent group of experts that set accounting standards for preparing, auditing, or using financial reports, and in accounting education.

Answer 15

International Accounting Standards Board (IASB)

Question 16

Issued by the IASB, they bring consistency to accounting standards and practices, regardless of the country of origin.

Answer 16

International Financial Reporting Standards

Question 17

Probable future economic benefits obtained or controlled by a particular entity as a result of past transactions or events.

Answer 17

Asset

Question 18

Probable future sacrifices of economic benefits arising from present obligations as a result of past actions or events.

Answer 18

Liabilities

Question 19

The residual interest in the assets of an entity that remain after deducting liabilities.

Answer 19

Owner’s Equity

Question 20

The value of assets given in exchange for stock in the entity.

Answer 20

Paid-In Capital

Question 21

Represent the portion of stockholder’s equity that has not been paid to the owners as dividends.

Answer 21

Retained Earnings

Question 22

The stock that a company repurchases; it is shown as a subtraction in the stockholder’s equity section of the balance sheet.

Answer 22

Treasury Stock

Question 23

Income that stems from increased assets due to market prices or exchange rates.

Answer 23

Accumulated Other Comprehensive Income

Question 24

A balance sheet that distinguishes between current and long-term assets and/or liabilities.

Answer 24

Classified Balance Sheet

Question 25

The idea that personal finances are kept separate from business finances.

Answer 25

The Entity Concept

Question 26

An accounting technique that values an asset for balance sheet purposes at the price paid for the asset at the time of its acquisition.

Answer 26

Historical Cost Convention

Question 27

The amount of assets created through the performance of business operations.

Answer 27

Revenue

Question 28

The amount of assets consumed from the performance of business operations.

Answer 28

Expense

Question 29

Refers to the money that is made on activities outside of the normal business operations of a company.

Answer 29

Gains

Question 30

Refers to the money that is lost on activities outside of the normal business operations of a company.

Answer 30

Losses

Question 31

Tells the owner of a stock how much one share of their stock is worth.

Answer 31

Earnings-per-Share

Question 32

The concept that a business should report the financial results of its activities over a standard time period, such as monthly, quarterly, or annually.

Answer 32

Time Period Concept

Question 33

A GAAP that determines the specific conditions in which revenue is recognized or accounted for.

Answer 33

Revenue Recognition

Question 34

Activities involved in producing and selling goods and services and thus compromise the day-to-day business of a company.

Answer 34

Operating Activities

Question 35

Activities that include the purchase and sale of land, buildings, and equipment.

Answer 35

Investing Activities

Question 36

Activities whereby cash is obtained from, or repaid to, owners and creditors.

Answer 36

Financing Activities

Question 37

An independent examination of the financial statements prepared by an organization.

Answer 37

External Audit

Question 38

Cash and other assets that are expected to be converted to cash within one year.

Answer 38

Current Assets

Question 39

Current assets composed of publicly traded stocks and bonds that are to be sold within one year.

Answer 39

Investment Securities

Question 40

Assets that have no physical or tangible characteristics that include agreements, contracts, patents, or trademarks.

Answer 40

Intangible Asset

Question 41

The difference between assets and liabilities in a corporation.

Answer 41

Stockholder’s Equity

Question 42

A financial instrument, such as an option or future, that derives its value from the movement of a price, exchange rate, or an interest rate associated with some other item.

Answer 42

Derivative

Question 43

Arises when a corporation has subsidiaries that are not 100-percent owned by an organization.

Answer 43

Non-Controlling Interest

Question 44

The process of assigning a dollar amount to an item once it has been determined that the item should be recognized on financial statements.

Answer 44

Valuation

Question 45

The process of determining how an economic event impacts financial statements.

Answer 45

Transaction Analysis

Question 46

A contract made on the promise of an exchange in the future, such as salary.

Answer 46

Executory Contract

Question 47

What two items are revealed on the balance sheet?

Answer 47

Ownership and Debt

Question 48

What are the five steps, in order, of the decision cycle?

Answer 48

``` Prepare Financial Statements Analyze Financial Statements Gather Information Make Decision Implement Decision ```

Question 49

Which two values affect the measurement of net income?

Answer 49

Operating Expenses and Ordinary Gains and Losses

Question 50

Which two items are included in a multi-step income statement?

Answer 50

Gross Profit and Income from Operations