ACCOUNTING 330 EXAM 1 QUESTIONS
WITH DETAILED VERIFIED ANSWERS
accounting cycle - correct answer-
Journalization, posting to general ledger, trial balance,
adjustments, adjusted trial balance, statement prep,
closing entries, post closing trial balance
accrual - correct answer- are accrued revenues
and accrued expenses. For example if interest is due on a
loan yearly on july 31 then there has to be an adjusting
entry at the end of the year for interest expense accrued
even though it hasn't been paid yet and wont be until
next july 31.
adjusting entries - correct answer- made at the
end of the period to bring all accounts up to date on an
accrual basis. Have to satisfy the revenue recognition and
matching principle and these are internal transactions.
, AICPA - correct answer- Private organization
that set GAAP from 1939-1973 (non gov), now develops
and grades CPA exams and CPEs
Challenges facing financial reporting - correct
answer- Forward looking/timeliness: all info in
financial statements relates to the past.
Nonfinancial measurements: customer satisfaction, brand
loyalty, environmental/sustainability efforts
Soft assets: easier to measure hard assets such as
buildings, equipment or cash but what about intangible
assets like patents.
Understandability.
comparability - correct answer- info is
measured and reported similarly for different companies
and different years
completeness - correct answer- all info
necessary for faithful representation is provided.
WITH DETAILED VERIFIED ANSWERS
accounting cycle - correct answer-
Journalization, posting to general ledger, trial balance,
adjustments, adjusted trial balance, statement prep,
closing entries, post closing trial balance
accrual - correct answer- are accrued revenues
and accrued expenses. For example if interest is due on a
loan yearly on july 31 then there has to be an adjusting
entry at the end of the year for interest expense accrued
even though it hasn't been paid yet and wont be until
next july 31.
adjusting entries - correct answer- made at the
end of the period to bring all accounts up to date on an
accrual basis. Have to satisfy the revenue recognition and
matching principle and these are internal transactions.
, AICPA - correct answer- Private organization
that set GAAP from 1939-1973 (non gov), now develops
and grades CPA exams and CPEs
Challenges facing financial reporting - correct
answer- Forward looking/timeliness: all info in
financial statements relates to the past.
Nonfinancial measurements: customer satisfaction, brand
loyalty, environmental/sustainability efforts
Soft assets: easier to measure hard assets such as
buildings, equipment or cash but what about intangible
assets like patents.
Understandability.
comparability - correct answer- info is
measured and reported similarly for different companies
and different years
completeness - correct answer- all info
necessary for faithful representation is provided.
