ACC 200 EXAM 1 REVIEW QUESTIONS WITH
VERIFIED SOLUTIONS
What is the primary system for maintaining records of a company's operations and
communicating that information to decision makers?
Accounting
What is the fundamental accounting equation?
$Assets = Liabilities + Stockholders' Equity$
Concept: Assets
Resources owned by a company.
Who are the trained individuals hired by a company as an independent party to express a
professional opinion on the conformity of financial statements with GAAP?
Auditors
Which financial statement presents the financial position of a company on a particular
date?
Balance sheet
Term: Capital markets
A composite of all investors and creditors who provide funds to businesses who need them.
What represents the amounts invested by stockholders when they purchase shares of stock
and is considered an external source of equity?
Common stock
In accounting, what is the ability of users to see similarities and differences between two
different business activities?
Comparability
What qualitative characteristic describes the use of similar accounting procedures either
over time for the same company or across companies at the same point in time?
Consistency
Which type of business entity is legally separate from its owners?
Corporation
What constraint suggests that financial accounting information is provided only when the
benefits of doing so exceed the costs?
, Cost constraint
Concept: Decision usefulness
The ability of information to be useful in decision making.
What are the distributions to stockholders, typically in the form of cash, called?
Dividends
Which accounting assumption states that all economic events with a particular economic
entity can be identified?
Economic entity assumption
Term: Expenses
Costs of providing products and services and other business activities during the current period.
Which qualitative characteristic requires accounting information to be complete, neutral,
and free from error?
Faithful representation
What phase of accounting is concerned with measuring business activities and
communicating those measurements to external parties?
Financial accounting
Which independent, private body has primary responsibility for the establishment of
GAAP in the United States?
Financial Accounting Standards Board (FASB)
What are the periodic reports published by a company for the purpose of providing
information to external users?
Financial statements
Cash transactions with lenders (borrowing/repaying debt) and stockholders (issuing
stock/paying dividends) are classified as _____.
Financing cash flows
What does the acronym GAAP stand for?
Generally Accepted Accounting Principles
Which assumption states that in the absence of information to the contrary, a business
entity will continue to operate indefinitely?
Going concern assumption
VERIFIED SOLUTIONS
What is the primary system for maintaining records of a company's operations and
communicating that information to decision makers?
Accounting
What is the fundamental accounting equation?
$Assets = Liabilities + Stockholders' Equity$
Concept: Assets
Resources owned by a company.
Who are the trained individuals hired by a company as an independent party to express a
professional opinion on the conformity of financial statements with GAAP?
Auditors
Which financial statement presents the financial position of a company on a particular
date?
Balance sheet
Term: Capital markets
A composite of all investors and creditors who provide funds to businesses who need them.
What represents the amounts invested by stockholders when they purchase shares of stock
and is considered an external source of equity?
Common stock
In accounting, what is the ability of users to see similarities and differences between two
different business activities?
Comparability
What qualitative characteristic describes the use of similar accounting procedures either
over time for the same company or across companies at the same point in time?
Consistency
Which type of business entity is legally separate from its owners?
Corporation
What constraint suggests that financial accounting information is provided only when the
benefits of doing so exceed the costs?
, Cost constraint
Concept: Decision usefulness
The ability of information to be useful in decision making.
What are the distributions to stockholders, typically in the form of cash, called?
Dividends
Which accounting assumption states that all economic events with a particular economic
entity can be identified?
Economic entity assumption
Term: Expenses
Costs of providing products and services and other business activities during the current period.
Which qualitative characteristic requires accounting information to be complete, neutral,
and free from error?
Faithful representation
What phase of accounting is concerned with measuring business activities and
communicating those measurements to external parties?
Financial accounting
Which independent, private body has primary responsibility for the establishment of
GAAP in the United States?
Financial Accounting Standards Board (FASB)
What are the periodic reports published by a company for the purpose of providing
information to external users?
Financial statements
Cash transactions with lenders (borrowing/repaying debt) and stockholders (issuing
stock/paying dividends) are classified as _____.
Financing cash flows
What does the acronym GAAP stand for?
Generally Accepted Accounting Principles
Which assumption states that in the absence of information to the contrary, a business
entity will continue to operate indefinitely?
Going concern assumption
