ACCT 2000 COMPREHENSIVE EXAM 2026
QUESTIONS AND ANSWERS GRADED A+
◉ What is the primary accounting standard-setting body in the
United States? Answer: Financial Accounting Standards Board
(FASB)
◉ An item is ________ if it is likely to influence the decision of an
investor or creditor. Answer: material (materiality)
◉ The effect on the basic accounting equation of performing
services for cash are to Answer: increase assets and increase
stockholders' equity
◉ If an expense is paid with cash Answer: assets will decrease
◉ what are generally accepted accounting principles Answer: A set
of accounting standards that have authoritative support
◉ What organization issues international financial reporting
standards? Answer: International Accounting Standards Board
,◉ what are the accounting rules that have substantial authoritative
support and are recognized as a general guide for financial reporting
purposes in the U.S.? Answer: Generally accepted accounting
principles
◉ Which of the following is NOT a characteristic of relevance?
Answer: verifiability
◉ Which of the following is NOT a fundamental quality of useful
accounting information Answer: verifiability
◉ which of the following are constraints that allow a company to
modify GAAP without jeopardizing the usefulness of the financial
statements? Answer: Cost constraint
◉ what is the primary criterion by which accounting information
can be judged? Answer: usefulness for decision making
◉ Neutrality is an ingredient of: Answer: Faithful Representation-Yes
Relevance-No
◉ Genesis Company buys equipment for $900 on account. This
transaction will immediately affect the Answer: balance sheet only
, ◉ Which of the following events is NOT recorded in the accounting
records? Answer: An employee is terminated
◉ During 2022, Gibson Company assets decreased $50,000 and its
liabilities decreased $90,000. Its stockholders' equity therefore:
Answer: increased $40,000
◉ If cash is received in an advance from a customer Answer:
liabilities will increase (unearned revenue)
◉ Receipt of an unearned revenue Answer: increases an asset;
increases a liability.
◉ payment of a dividend Answer: decreases cash; decreases
retained earnings.
◉ If a company receives cash from a customer before performing
services for the customer, then Answer: assets increase and
liabilities increase
◉ If total liabilities increase by $5,000 then Answer: assets increase
by $5,000, or stockholders' equity decrease by $5,000.
◉ What type of account is unearned revenue? Answer: liability
QUESTIONS AND ANSWERS GRADED A+
◉ What is the primary accounting standard-setting body in the
United States? Answer: Financial Accounting Standards Board
(FASB)
◉ An item is ________ if it is likely to influence the decision of an
investor or creditor. Answer: material (materiality)
◉ The effect on the basic accounting equation of performing
services for cash are to Answer: increase assets and increase
stockholders' equity
◉ If an expense is paid with cash Answer: assets will decrease
◉ what are generally accepted accounting principles Answer: A set
of accounting standards that have authoritative support
◉ What organization issues international financial reporting
standards? Answer: International Accounting Standards Board
,◉ what are the accounting rules that have substantial authoritative
support and are recognized as a general guide for financial reporting
purposes in the U.S.? Answer: Generally accepted accounting
principles
◉ Which of the following is NOT a characteristic of relevance?
Answer: verifiability
◉ Which of the following is NOT a fundamental quality of useful
accounting information Answer: verifiability
◉ which of the following are constraints that allow a company to
modify GAAP without jeopardizing the usefulness of the financial
statements? Answer: Cost constraint
◉ what is the primary criterion by which accounting information
can be judged? Answer: usefulness for decision making
◉ Neutrality is an ingredient of: Answer: Faithful Representation-Yes
Relevance-No
◉ Genesis Company buys equipment for $900 on account. This
transaction will immediately affect the Answer: balance sheet only
, ◉ Which of the following events is NOT recorded in the accounting
records? Answer: An employee is terminated
◉ During 2022, Gibson Company assets decreased $50,000 and its
liabilities decreased $90,000. Its stockholders' equity therefore:
Answer: increased $40,000
◉ If cash is received in an advance from a customer Answer:
liabilities will increase (unearned revenue)
◉ Receipt of an unearned revenue Answer: increases an asset;
increases a liability.
◉ payment of a dividend Answer: decreases cash; decreases
retained earnings.
◉ If a company receives cash from a customer before performing
services for the customer, then Answer: assets increase and
liabilities increase
◉ If total liabilities increase by $5,000 then Answer: assets increase
by $5,000, or stockholders' equity decrease by $5,000.
◉ What type of account is unearned revenue? Answer: liability
