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Rutgers Introduction to Financial Accounting Exam 1
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states that assets and liabilities should be reported at fair
value (the price received to sell an asset or settle a
liability). - Answer-fair value principle
requires that companies include in the accounting records
only transaction data that can be expressed in terms of
money. - Answer-MONETARY UNIT ASSUMPTION
requires that activities of the entity be kept separate and
distinct from the activities of its owner . - Answer-economic
entity assumption
owned by one person - Answer-Proprietorship
Owned by two or more people - Answer-partnership
Ownership divided into shares - Answer-corporation
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Basic Accounting Equation - Answer-Assets = Liabilities +
Stockholders' Equity
Examples of Assets - Answer-cash, accounts receivable,
supplies, inventory
Examples of Liabilities - Answer-Accounts payable, notes
payable, salaries and wages payable, sales and real
estate taxes payable, etc.
Stockholders' Equity - Answer-common stock and retained
earnings
Accounting consists of three basic activities - Answer-
identifies, records, and communicates
Standards that are generally accepted and universally
practiced. These standards indicate how to report
economic events. - Answer-Generally Accepted
Accounting Principles (GAAP)
(or cost principle) dictates that companies record assets at
their cost. - Answer-historical cost principle
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are the distribution of cash or other assets to stockholders.
(not an expense) - Answer-dividend
Revenues - Answer-result from business activities entered
into for the purpose of earning income.
Expenses - Answer-salaries expense, rent expense,
utilities expense, tax expense, etc.
What are the 4 financial statements? - Answer-income
statement, retained earnings statement, balance sheet,
statement of cash flows
A financial statement showing the revenue and expenses
for a fiscal period. - Answer-Income Statement
A financial statement that summarizes the amounts and
causes of changes in retained earnings for a specific time
period. - Answer-Retained Earnings Statement
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A financial statement that reports assets, liabilities, and
owner's equity on a specific date. - Answer-Balance Sheet
Entering transaction data in the journal. We refer to this as
making journal entries. - Answer-Journalizing
Posting is the process of transferring journal entries to the
ledger accounts. - Answer-posting
Accounting time period that is one year in length. -
Answer-fiscal year
jan 1 to dec 231 - Answer-calendar year
Reporting income when the cash is received and
expenses when the cash is paid. - Answer-Cash Basis
Accounting
Accounting basis in which companies record transactions
that change a company's financial statements in the
periods in which the events occur. - Answer-Accrural basis
accounting
Rutgers Introduction to Financial Accounting Exam 1
||Verified Exam!!|| Most Recent Exam Actual Complete
Real Exam Questions And Correct Answers (Verified
Answers) Already Graded A+ || Newest Exam!!!
states that assets and liabilities should be reported at fair
value (the price received to sell an asset or settle a
liability). - Answer-fair value principle
requires that companies include in the accounting records
only transaction data that can be expressed in terms of
money. - Answer-MONETARY UNIT ASSUMPTION
requires that activities of the entity be kept separate and
distinct from the activities of its owner . - Answer-economic
entity assumption
owned by one person - Answer-Proprietorship
Owned by two or more people - Answer-partnership
Ownership divided into shares - Answer-corporation
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Basic Accounting Equation - Answer-Assets = Liabilities +
Stockholders' Equity
Examples of Assets - Answer-cash, accounts receivable,
supplies, inventory
Examples of Liabilities - Answer-Accounts payable, notes
payable, salaries and wages payable, sales and real
estate taxes payable, etc.
Stockholders' Equity - Answer-common stock and retained
earnings
Accounting consists of three basic activities - Answer-
identifies, records, and communicates
Standards that are generally accepted and universally
practiced. These standards indicate how to report
economic events. - Answer-Generally Accepted
Accounting Principles (GAAP)
(or cost principle) dictates that companies record assets at
their cost. - Answer-historical cost principle
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are the distribution of cash or other assets to stockholders.
(not an expense) - Answer-dividend
Revenues - Answer-result from business activities entered
into for the purpose of earning income.
Expenses - Answer-salaries expense, rent expense,
utilities expense, tax expense, etc.
What are the 4 financial statements? - Answer-income
statement, retained earnings statement, balance sheet,
statement of cash flows
A financial statement showing the revenue and expenses
for a fiscal period. - Answer-Income Statement
A financial statement that summarizes the amounts and
causes of changes in retained earnings for a specific time
period. - Answer-Retained Earnings Statement
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A financial statement that reports assets, liabilities, and
owner's equity on a specific date. - Answer-Balance Sheet
Entering transaction data in the journal. We refer to this as
making journal entries. - Answer-Journalizing
Posting is the process of transferring journal entries to the
ledger accounts. - Answer-posting
Accounting time period that is one year in length. -
Answer-fiscal year
jan 1 to dec 231 - Answer-calendar year
Reporting income when the cash is received and
expenses when the cash is paid. - Answer-Cash Basis
Accounting
Accounting basis in which companies record transactions
that change a company's financial statements in the
periods in which the events occur. - Answer-Accrural basis
accounting
