ACC 200 EXAM 1 REVIEW QUESTIONS WITH
VERIFIED SOLUTIONS
Objective of financial reports
provide information to investors and lenders to help them make decisions about whether to invest
or lend.
Private Companies
a company owned by an individual or group that does not sell shares of stock to the general
public.
Public Companies
Companies that sell stock to the general public /are required by the U.S. Congress to maintain a
system of internal controls.
Private companies prepare financial reports for:
owners/investors
Banks
Tax preparers/agencies
public company financial reports
for SEC
public can see them
extensive
financial statement includes
1. Income Statement
2. statement of shareholders Equity
3. Balance Sheet
4. Statement of Cash Flows
10-Q
Quarterly report
10-K
annual report
GAAP
Generally Accepted Accounting Principles
accrural accounting
, Accrual accounting is an accounting method that measures the performance and position of a
company by recognizing economic events regardless of when cash transactions occur.
benefits of financial reporting
answers the question: Is the business working?
Accounting Equation
Assets = Liabilities + Equity
current assets
cash and assets expected to be converted into cash within one year.
List of current assets
cash
investments
accounts receivable (IOUs from customers)
inventory
prepaid expenses (insurance)
Non-current assets
land
tangible assets
operating leases
intangible assets
cash
at the current amount of cash in banks and on-site at the company
Investments
short-term investments, i.e, government securities, stocks. corporate bonds
measured at fair value
Accounts receivable (AR)
IOU from customers as a result of a sale on account
total amount owed from customers minus an allowance or estimate of how much will not be
collected.
Contra - asset accounts
the allowance for doubtful accounts
decreases the reported value of an asset
accounts receivable net
VERIFIED SOLUTIONS
Objective of financial reports
provide information to investors and lenders to help them make decisions about whether to invest
or lend.
Private Companies
a company owned by an individual or group that does not sell shares of stock to the general
public.
Public Companies
Companies that sell stock to the general public /are required by the U.S. Congress to maintain a
system of internal controls.
Private companies prepare financial reports for:
owners/investors
Banks
Tax preparers/agencies
public company financial reports
for SEC
public can see them
extensive
financial statement includes
1. Income Statement
2. statement of shareholders Equity
3. Balance Sheet
4. Statement of Cash Flows
10-Q
Quarterly report
10-K
annual report
GAAP
Generally Accepted Accounting Principles
accrural accounting
, Accrual accounting is an accounting method that measures the performance and position of a
company by recognizing economic events regardless of when cash transactions occur.
benefits of financial reporting
answers the question: Is the business working?
Accounting Equation
Assets = Liabilities + Equity
current assets
cash and assets expected to be converted into cash within one year.
List of current assets
cash
investments
accounts receivable (IOUs from customers)
inventory
prepaid expenses (insurance)
Non-current assets
land
tangible assets
operating leases
intangible assets
cash
at the current amount of cash in banks and on-site at the company
Investments
short-term investments, i.e, government securities, stocks. corporate bonds
measured at fair value
Accounts receivable (AR)
IOU from customers as a result of a sale on account
total amount owed from customers minus an allowance or estimate of how much will not be
collected.
Contra - asset accounts
the allowance for doubtful accounts
decreases the reported value of an asset
accounts receivable net
