ACC 200 EXAM 2 REVIEW QUESTIONS WITH
VERIFIED SOLUTIONS
functions of financial accounting
1) MEASURE business activities of a company
2) COMMUNICATE those measurements to external parties for decision-making purposes
financing activities
transactions company has with investors and creditors
investing activities
transactions involving the purchase and sale of resources that are expected to benefit the
company for several years
operating activities
transactions that relate to the primary operations of a company
accounting equation
assets=liabilities+stockholder's equity
asset
total resources of the company
liabilities
amounts owed to creditors
stockholder's equity
owners claims to resources
revenues
amounts recognized when the company sells products/provides services to customers
expenses
costs of providing products/services and other business activities during current period
net income/loss
difference between revenues and expenses
dividends
cash payments to stockholders
, financial statements
periodic reports published by the company for the purpose of providing info to external users
5 types of financial statements
income statement
statement of stockholder's equity
balance sheet
statement of cash flows
statement of comprehensive income
most useful financial statements
balance sheet
income statement
statement of cash flows
United States accounting
financial accounting standards board (FASB)
financial accounting standards board is governed by
securities and exchange commission (SEC)
global accounting
international accounting standards board (IASB)
auditors
help ensure management has appropriately applied GAAP in preparing comapny's financials
play major role in investors/creditors decisions by adding credibility to financials
types of auditors report
unqualified (perfect)
unqualified with explanatory or emphasis paragraph
qualified (issues)
adverse (bad)
sarbanes-oxley act (SOX)
provides regulation of auditors, and types of services they furnish to clients
increase accountability for corporate executives
provides stiff criminal penalties for violators
balance sheet
VERIFIED SOLUTIONS
functions of financial accounting
1) MEASURE business activities of a company
2) COMMUNICATE those measurements to external parties for decision-making purposes
financing activities
transactions company has with investors and creditors
investing activities
transactions involving the purchase and sale of resources that are expected to benefit the
company for several years
operating activities
transactions that relate to the primary operations of a company
accounting equation
assets=liabilities+stockholder's equity
asset
total resources of the company
liabilities
amounts owed to creditors
stockholder's equity
owners claims to resources
revenues
amounts recognized when the company sells products/provides services to customers
expenses
costs of providing products/services and other business activities during current period
net income/loss
difference between revenues and expenses
dividends
cash payments to stockholders
, financial statements
periodic reports published by the company for the purpose of providing info to external users
5 types of financial statements
income statement
statement of stockholder's equity
balance sheet
statement of cash flows
statement of comprehensive income
most useful financial statements
balance sheet
income statement
statement of cash flows
United States accounting
financial accounting standards board (FASB)
financial accounting standards board is governed by
securities and exchange commission (SEC)
global accounting
international accounting standards board (IASB)
auditors
help ensure management has appropriately applied GAAP in preparing comapny's financials
play major role in investors/creditors decisions by adding credibility to financials
types of auditors report
unqualified (perfect)
unqualified with explanatory or emphasis paragraph
qualified (issues)
adverse (bad)
sarbanes-oxley act (SOX)
provides regulation of auditors, and types of services they furnish to clients
increase accountability for corporate executives
provides stiff criminal penalties for violators
balance sheet
