BUS-A200 Exam 1 Study Guide ACTUAL UPDATED Questions and CORRECT
Answers
Terms in this set (76)
dividends Resource owners provide resources to companies who convert the resources into
profits for the owners. When a company DISTRIBUTES profits to the owners this is
called:
to provide relevant and reliable information to decision The primary objective of accounting is
makers
, GAAP - Generally Accepted Accounting Principles The rules of accounting that govern how financial reports are prepare for
companies in the United States are called
corporation Which type of legal entity provides limited liability to the owners (meaning the
owners cannot be sued for the company's debts)?
Public corporation What do you call a company in which anyone can purchase shares of stock and
become an owner?
the business In A200 we will primarily focus on the financial reports of which entity?
Smith Carpet Cleaning Inc. John Smith owns Smith Carpet Cleaning Inc. Smith Inc. purchases materials and
supplies from Lowes and Home Depot. When the company began, Smith Inc.
borrowed $10,000 from Chase Bank. Smith has 10 regular customers and 3
employees. If an exam question asks about the effect of a transaction on the
"business", which business should you assume is the focus of the question?
corporation What type of legal organization provides "limited liability" for the owners?
Corporation What type of legal organization has "shareholders or stockholders" as owners?
Dividends DISTRIBUTIONS (usually paid in cash) of the company's profits given to the
shareholders of a corporation are called
Retained earnings The amount of the profits (net income) earned by a corporation that are NOT paid
out to shareholders are recorded in an account titled
Balance sheet Which financial statement is prepared as of a point in time (not for a period of
time)
Revenue - Expense Net income is calculated using which formula?
Service Revenue The amount a company earns from providing a service to a customer is called
what?
Asset Items of value owned by a company (such as land, cash, inventory) are called
what?
Cash The money in a company's bank account is accounted for in which financial
statement account?
liability or debt The amount a company owes to another person or company is called:
Income Statement Which statement tells us if the company was profitable, or not?
Balance Sheet and Statement of Stockholders' Equity Which financial statement(s) show the amount the investors contributed into the
company in exchange for ownership shares?
Income Statement Which financial statement MUST be prepared first (before others can be
prepared)?
Answers
Terms in this set (76)
dividends Resource owners provide resources to companies who convert the resources into
profits for the owners. When a company DISTRIBUTES profits to the owners this is
called:
to provide relevant and reliable information to decision The primary objective of accounting is
makers
, GAAP - Generally Accepted Accounting Principles The rules of accounting that govern how financial reports are prepare for
companies in the United States are called
corporation Which type of legal entity provides limited liability to the owners (meaning the
owners cannot be sued for the company's debts)?
Public corporation What do you call a company in which anyone can purchase shares of stock and
become an owner?
the business In A200 we will primarily focus on the financial reports of which entity?
Smith Carpet Cleaning Inc. John Smith owns Smith Carpet Cleaning Inc. Smith Inc. purchases materials and
supplies from Lowes and Home Depot. When the company began, Smith Inc.
borrowed $10,000 from Chase Bank. Smith has 10 regular customers and 3
employees. If an exam question asks about the effect of a transaction on the
"business", which business should you assume is the focus of the question?
corporation What type of legal organization provides "limited liability" for the owners?
Corporation What type of legal organization has "shareholders or stockholders" as owners?
Dividends DISTRIBUTIONS (usually paid in cash) of the company's profits given to the
shareholders of a corporation are called
Retained earnings The amount of the profits (net income) earned by a corporation that are NOT paid
out to shareholders are recorded in an account titled
Balance sheet Which financial statement is prepared as of a point in time (not for a period of
time)
Revenue - Expense Net income is calculated using which formula?
Service Revenue The amount a company earns from providing a service to a customer is called
what?
Asset Items of value owned by a company (such as land, cash, inventory) are called
what?
Cash The money in a company's bank account is accounted for in which financial
statement account?
liability or debt The amount a company owes to another person or company is called:
Income Statement Which statement tells us if the company was profitable, or not?
Balance Sheet and Statement of Stockholders' Equity Which financial statement(s) show the amount the investors contributed into the
company in exchange for ownership shares?
Income Statement Which financial statement MUST be prepared first (before others can be
prepared)?
