ACC 311 Midterm 1 Exam Questions With Correct Answers

ACC 311 Midterm 1 Exam Questions With
Correct Answers

Basic Accounting Equation - CORRECT ANSWER✔✔-
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Assets=Liabilities+Stockholder's Equity |




Statement of Retained Earnings (equation) - CORRECT ANSWER✔✔-Beginning
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RE+Net Income-Dividends=Ending RE
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Order of 4 Financial Statements - CORRECT ANSWER✔✔-Income Statement--
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>Statement of Retained Earnings-->Balance Sheet-->Statement of Cash Flow
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Income Statement (equation) - CORRECT ANSWER✔✔-Revenues-Expenses=Net
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Income-->Goes into RE | |




FASB - CORRECT ANSWER✔✔-Financial Accounting Standards Board; creates
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GAAP,


Characteristics of accounting - CORRECT ANSWER✔✔-Relevancy, Reliability,
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comparability, consistency |




Management responsibility - CORRECT ANSWER✔✔-must form board of directors
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with an audit committee of independent directors to hire outside auditors and
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review controls |

, SEC - CORRECT ANSWER✔✔-gets broad powers to determine standards for
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financial statement |




Know elements on income statement - CORRECT ANSWER✔✔-Revenues,
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expenses, gains, losses | |




Characteristics of assets - CORRECT ANSWER✔✔-1. can put a value on it
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2. own/control
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3. future economic benefit
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Corporate governance - CORRECT ANSWER✔✔-procedures that ensure company
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is managed in interests of shareholders-->ensure integrity in financial reporting
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Contributed capital - CORRECT ANSWER✔✔-common stock+additional paid in
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capital


Earnings per Share (formula and location) - CORRECT ANSWER✔✔-net
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income/average # shares outstanding; located on income statement
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ROA - CORRECT ANSWER✔✔-Return on assets, evaluates company's performance
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ROA= net income/average total assets; how much firm earned for each dollar of
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investment
-how well company used total invested capital provided by debtholder's and
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stockholder's