ACG 2021 EXAM 1 LATEST QUESTIONS AND SOLUTIONS - VERIFIED
ANSWERS 2026/2027 (PASS GUARANTEE)
1. What is a Balance Sheet? ANSWER a financial statement that reports
the assets and claims to those assets at a specific point in time
2. What is the Basic accounting equation? ANSWER Assets= Liabilities +
Equity
3. What is Common Stock? ANSWER the total amount paid in by
stockholders for the shares they purchase
4. What is a Corporation? ANSWER a business organized as a separate
legal entity having ownership divided into transferable shares of stock
5. What are Dividends? ANSWER payments of cash from a corporation to
its stockholders
6. What are Expenses? ANSWER the cost of assets consumed or services
used in the process of generating revenues
7. What is an income statement? ANSWER a financial statement that
presents the revenues and expenses and resulting net income or net loss
of a company for a specific period of time
8. What are liabilities? ANSWER the debts and obligations of a business.
Liabilities represent the amounts owed to creditors
9. What is net income? ANSWER the amount by which revenues exceed
expenses
10. What is net loss? ANSWER the amount by which expenses exceed
revenues
11. What is a partnership? ANSWER a business owned by two or more
persons associated as partners
12. What are retained earnings? ANSWER the amount of net income
retained in the corporation
, 13. What is a retained earnings statement? ANSWER a financial
statement that summarizes the amounts and causes of changes in retained
earnings for a specific period of time
14. What is revenue? ANSWER the increase in assets that result from the
sale of a product or service in the normal course of business
15. What is a sole proprietorship? ANSWER a business owned by one
person
16. What is a statement of cash flows? ANSWER a financial statement
that provides financial information about the cash receipts and cash
payments of a business for a specific period of time
17. What is stockholder's equity? ANSWER the owners' claim on total
assets
18. What is a Classified Balance sheet? ANSWER a balance sheet that
contains a number of standard classifications and sections
19. What is Conservatism? ANSWER the approach of choosing an
accounting method, when alternatives exist, that will least likely overstate
assets and net income
20. What is consistency? ANSWER use of the same accounting principles
and methods from year to year within a company
21. What is the cost principle? ANSWER an accounting principle that
states that companies should record assets at their costs
22. What are current assets? ANSWER cash and other resources that
companies reasonably expect to convert to cash or use up within one year
or the operating cycle, whichever is longer
23. What are current liabilities? ANSWER obligations that a company
reasonably expects to pay within the next year or operating cycle,
whichever is longer
24. What is the Financial Accounting Standards Board (FASB)? ANSWER
the primary accounting standard-setting body in the US
25. What is free cash flow? ANSWER cash remaining from operating
activities after adjusting for capital expenditures and dividends paid
ANSWERS 2026/2027 (PASS GUARANTEE)
1. What is a Balance Sheet? ANSWER a financial statement that reports
the assets and claims to those assets at a specific point in time
2. What is the Basic accounting equation? ANSWER Assets= Liabilities +
Equity
3. What is Common Stock? ANSWER the total amount paid in by
stockholders for the shares they purchase
4. What is a Corporation? ANSWER a business organized as a separate
legal entity having ownership divided into transferable shares of stock
5. What are Dividends? ANSWER payments of cash from a corporation to
its stockholders
6. What are Expenses? ANSWER the cost of assets consumed or services
used in the process of generating revenues
7. What is an income statement? ANSWER a financial statement that
presents the revenues and expenses and resulting net income or net loss
of a company for a specific period of time
8. What are liabilities? ANSWER the debts and obligations of a business.
Liabilities represent the amounts owed to creditors
9. What is net income? ANSWER the amount by which revenues exceed
expenses
10. What is net loss? ANSWER the amount by which expenses exceed
revenues
11. What is a partnership? ANSWER a business owned by two or more
persons associated as partners
12. What are retained earnings? ANSWER the amount of net income
retained in the corporation
, 13. What is a retained earnings statement? ANSWER a financial
statement that summarizes the amounts and causes of changes in retained
earnings for a specific period of time
14. What is revenue? ANSWER the increase in assets that result from the
sale of a product or service in the normal course of business
15. What is a sole proprietorship? ANSWER a business owned by one
person
16. What is a statement of cash flows? ANSWER a financial statement
that provides financial information about the cash receipts and cash
payments of a business for a specific period of time
17. What is stockholder's equity? ANSWER the owners' claim on total
assets
18. What is a Classified Balance sheet? ANSWER a balance sheet that
contains a number of standard classifications and sections
19. What is Conservatism? ANSWER the approach of choosing an
accounting method, when alternatives exist, that will least likely overstate
assets and net income
20. What is consistency? ANSWER use of the same accounting principles
and methods from year to year within a company
21. What is the cost principle? ANSWER an accounting principle that
states that companies should record assets at their costs
22. What are current assets? ANSWER cash and other resources that
companies reasonably expect to convert to cash or use up within one year
or the operating cycle, whichever is longer
23. What are current liabilities? ANSWER obligations that a company
reasonably expects to pay within the next year or operating cycle,
whichever is longer
24. What is the Financial Accounting Standards Board (FASB)? ANSWER
the primary accounting standard-setting body in the US
25. What is free cash flow? ANSWER cash remaining from operating
activities after adjusting for capital expenditures and dividends paid
