Financial Accounting -Mba Prepworks Questions
With All Correct Answers
return on equity ratio correct answer -
InstituteofManagementAccountants correct answer -internal reporting
process of managerial accounting as applied to financial accounting
MNE multinationsal enterprise correct answer -internal standards on
reports
OECD Org. for Economic Cooperation & Development correct answer -
issued code of conduct for MNE's w guidelines and exposures
IASC International Accounting Standards Committie correct answer -most
imrnt pro acctng org. in world - develop and issue reporting standard 1
promulgate standards 2 persuade countries 3 work w those countries
IOSCO Intl. Org. Securities Commisions & similar organizations correct
answer -ease requirements for multinational securities offerings achieve just
& efficient market exchange info. unite to establish standards provide
assistance
IFAC Intnl federation of Accountants correct answer -encourage
consistency and professionalism. Management acctg, auditing, ethics,
education
USA FASB Financial Acctng Standards Board correct answer -authoritative
body - info needs of external users. must be clear and understandable to those
with reasonable competance
GAAP Generally Accepted correct answer -principles set and overseen by
the FASB and SEC
Economic Entity correct answer -one firm,one set of books. do not have to
correspond to legal entities; however a degree of ownership must exist before
claiming financial results of another enterprise as its own
,going concern correct answer -firm has a value beyond liquidation of
assets
monetary unit correct answer -financial transactions are denominated in a
stable unit of measure
accounting periods correct answer -results of operations for an entity
must be reported on a periodic basis (yearly)
revenue-expense matching correct answer -accounting entities should
aspire to recognize expenses in same accounting periods as revenues they
generate
conservatism correct answer -better to understate than overstate
economic well being
understandability correct answer -financial conditions and results should
be communicated so that they are understandable by an educated user of
financial info
relevance correct answer -financial data must be relevant to a user to be of
value, extraneous information need not appear
consistency correct answer -acctng. entities must consistently apply
elections available to them so that results from different periods can be
compared
materiality correct answer -cost/benefit aspect to financial reporting;
insignificant data need not be reported
most users of financial acctng. are external to a firm correct answer -
lenders, investors, anay
accounting correct answer -recording,classifying,and communicating
financial info concerning the economic activity of an enterprise
bookeeping correct answer -identifying measuring recording
3 types of accounting correct answer -financial - managerial - tax
, accounting entity correct answer -financial accounting revolves around
this; ex: non profits, individuals, and businesses
proprietership correct answer -unincorporated bus org. with 1 owner. no
distinction between the business and owner but there is financial distinction
between them
partnership correct answer -same as proprietership but with 2 or more
owners. not a legal entity but is recognized as such for acctng. purposes
UN and OECD correct answer -international political organizations
involved in financial disclosure - political only
accounting entity is considered to be any organization for which separate
accounting data gathered and processed T/f correct answer -true
recording of an economic event
a- record
b-transaction
c-balance correct answer -transaction
when owner of a proprietorship- or 1 of partners in partnership dies, the
business ceases to exist T/f correct answer -true (corporations can
continue- however)
financial accounting is designed for the ___________type of user correct
answer -external
tax accounting is designed for the ____________ correct answer -government
managerial accounting is for the ____________ type of user correct answer -
internal
changing tax laws are fairly easy to predict T/F correct answer -false -
many new tax laws each year difficult to keep a current knowledge of all
changes
With All Correct Answers
return on equity ratio correct answer -
InstituteofManagementAccountants correct answer -internal reporting
process of managerial accounting as applied to financial accounting
MNE multinationsal enterprise correct answer -internal standards on
reports
OECD Org. for Economic Cooperation & Development correct answer -
issued code of conduct for MNE's w guidelines and exposures
IASC International Accounting Standards Committie correct answer -most
imrnt pro acctng org. in world - develop and issue reporting standard 1
promulgate standards 2 persuade countries 3 work w those countries
IOSCO Intl. Org. Securities Commisions & similar organizations correct
answer -ease requirements for multinational securities offerings achieve just
& efficient market exchange info. unite to establish standards provide
assistance
IFAC Intnl federation of Accountants correct answer -encourage
consistency and professionalism. Management acctg, auditing, ethics,
education
USA FASB Financial Acctng Standards Board correct answer -authoritative
body - info needs of external users. must be clear and understandable to those
with reasonable competance
GAAP Generally Accepted correct answer -principles set and overseen by
the FASB and SEC
Economic Entity correct answer -one firm,one set of books. do not have to
correspond to legal entities; however a degree of ownership must exist before
claiming financial results of another enterprise as its own
,going concern correct answer -firm has a value beyond liquidation of
assets
monetary unit correct answer -financial transactions are denominated in a
stable unit of measure
accounting periods correct answer -results of operations for an entity
must be reported on a periodic basis (yearly)
revenue-expense matching correct answer -accounting entities should
aspire to recognize expenses in same accounting periods as revenues they
generate
conservatism correct answer -better to understate than overstate
economic well being
understandability correct answer -financial conditions and results should
be communicated so that they are understandable by an educated user of
financial info
relevance correct answer -financial data must be relevant to a user to be of
value, extraneous information need not appear
consistency correct answer -acctng. entities must consistently apply
elections available to them so that results from different periods can be
compared
materiality correct answer -cost/benefit aspect to financial reporting;
insignificant data need not be reported
most users of financial acctng. are external to a firm correct answer -
lenders, investors, anay
accounting correct answer -recording,classifying,and communicating
financial info concerning the economic activity of an enterprise
bookeeping correct answer -identifying measuring recording
3 types of accounting correct answer -financial - managerial - tax
, accounting entity correct answer -financial accounting revolves around
this; ex: non profits, individuals, and businesses
proprietership correct answer -unincorporated bus org. with 1 owner. no
distinction between the business and owner but there is financial distinction
between them
partnership correct answer -same as proprietership but with 2 or more
owners. not a legal entity but is recognized as such for acctng. purposes
UN and OECD correct answer -international political organizations
involved in financial disclosure - political only
accounting entity is considered to be any organization for which separate
accounting data gathered and processed T/f correct answer -true
recording of an economic event
a- record
b-transaction
c-balance correct answer -transaction
when owner of a proprietorship- or 1 of partners in partnership dies, the
business ceases to exist T/f correct answer -true (corporations can
continue- however)
financial accounting is designed for the ___________type of user correct
answer -external
tax accounting is designed for the ____________ correct answer -government
managerial accounting is for the ____________ type of user correct answer -
internal
changing tax laws are fairly easy to predict T/F correct answer -false -
many new tax laws each year difficult to keep a current knowledge of all
changes
