MBA PrepWorks Ivy Software - Financial
Accounting questions with correct
answer 2024
GAAP - Correct Answer Generally Accepted Accounting Principles. The standards and rules that
accountants follow while recording and reporting financial activities.
Economic Entity - Correct Answer Company keeps its activity separate from its owners and other
businesses. One firm, one set of books.
Going Concern - Correct Answer The accounting assumption that a business is expected to operate
indefinitely. Assumes the company will continue so asset values are at a historical cost.
Monetary Unit - Correct Answer Financial transactions are denominated in a stable unit of measure.
Everything is in US dollars
Accounting Periods - Correct Answer The results of operations for an entity must be reported on a
periodic basis, usually a year
Revenue/Expense Matching - Correct Answer All expenses incurred to generate revenues should be
recognized during the same period as those revenues
Conservatism - Correct Answer Accounting theory advocates that it is better for potential measurement
errors to understate rather than overstate profits
Understandability - Correct Answer Information presented in a clear and concise fashion so that users
can interpret it and comprehend its meaning.
Relevance - Correct Answer The quality of information that indicates the information makes a difference
in a decision.
Comparability - Correct Answer Ability to compare the accounting information of different companies
because they use the same accounting principles. Quantitative assessment
, Consistency - Correct Answer Use of the same accounting principles and methods from year to year
within a company. Allows information to be compared over time.
Materiality - Correct Answer An item should not be reported if it is not large enough to influence the
users of a financial statement.
Who is the rule making body for GAAP? - Correct Answer Financial Accounting Standards Board (FASB)
True or False: The 10K is required by the FASB - Correct Answer False
__________ _________ can be used for comparing budgeted and forecasted costs with actual
performance. - Correct Answer Managerial Accounting
Is the annual report a good example of tax accounting? - Correct Answer No
What is generally violated in periods of rising prices? - Correct Answer Monetary Concept
What formula is the basis for double entry bookkeeping? - Correct Answer Assets = Liabilities + Owners'
Equity
____ is a snapshot of a business. - Correct Answer Balance Sheet
_____ reports the results over a period of time. - Correct Answer Income statement
True or False: Owners quity is also called stockholders equity. - Correct Answer True
What does the Statement of Retained Earnings show? - Correct Answer It shows the retained earning at
the beginning of the period, plus net income, less dividends
Accounting questions with correct
answer 2024
GAAP - Correct Answer Generally Accepted Accounting Principles. The standards and rules that
accountants follow while recording and reporting financial activities.
Economic Entity - Correct Answer Company keeps its activity separate from its owners and other
businesses. One firm, one set of books.
Going Concern - Correct Answer The accounting assumption that a business is expected to operate
indefinitely. Assumes the company will continue so asset values are at a historical cost.
Monetary Unit - Correct Answer Financial transactions are denominated in a stable unit of measure.
Everything is in US dollars
Accounting Periods - Correct Answer The results of operations for an entity must be reported on a
periodic basis, usually a year
Revenue/Expense Matching - Correct Answer All expenses incurred to generate revenues should be
recognized during the same period as those revenues
Conservatism - Correct Answer Accounting theory advocates that it is better for potential measurement
errors to understate rather than overstate profits
Understandability - Correct Answer Information presented in a clear and concise fashion so that users
can interpret it and comprehend its meaning.
Relevance - Correct Answer The quality of information that indicates the information makes a difference
in a decision.
Comparability - Correct Answer Ability to compare the accounting information of different companies
because they use the same accounting principles. Quantitative assessment
, Consistency - Correct Answer Use of the same accounting principles and methods from year to year
within a company. Allows information to be compared over time.
Materiality - Correct Answer An item should not be reported if it is not large enough to influence the
users of a financial statement.
Who is the rule making body for GAAP? - Correct Answer Financial Accounting Standards Board (FASB)
True or False: The 10K is required by the FASB - Correct Answer False
__________ _________ can be used for comparing budgeted and forecasted costs with actual
performance. - Correct Answer Managerial Accounting
Is the annual report a good example of tax accounting? - Correct Answer No
What is generally violated in periods of rising prices? - Correct Answer Monetary Concept
What formula is the basis for double entry bookkeeping? - Correct Answer Assets = Liabilities + Owners'
Equity
____ is a snapshot of a business. - Correct Answer Balance Sheet
_____ reports the results over a period of time. - Correct Answer Income statement
True or False: Owners quity is also called stockholders equity. - Correct Answer True
What does the Statement of Retained Earnings show? - Correct Answer It shows the retained earning at
the beginning of the period, plus net income, less dividends
