ACCT 351
Acct 351 Exam 1 Study Questions 100%
Correct Answers 2025-2026 Graded A+
What are the U.S. GAAP? -Correct Answers ✔-GAAP are guidelines, procedures,
and practices that a company is required to use in recording and reporting the
accounting information in its audited financial statemennts
They are like laws and are the rules that must be followed in audited financial
reporting. These guidelines, procedures, and practices have substantial
authoirtative support
What Role Does FASB play is US financial Reporting? -Correct Answers ✔-To
establish and improve standards of financial accounting and reporting for the
guidance and education of the public, including issuers, auditors, and users of
financial info
Due Process -Correct Answers ✔-1. Topic identified and placed on agenda
2. Research and analysis conducted and preliminary views of pros and cons issued
3. Public hearing on proposed standard
4. Board evaluates research and public response and issues exposure draft
5. Board evaluates responses and changes exposure draft, if necessary, final
statement issued
What is the role of the SEC in US financial reporting? -Correct Answers ✔-A
federal agency that has the broad powers to prescribe, in whatever detail it desires,
the accounting standards to be employed by companies that fall within its
jurisdiction
What are the four primary financial statements? -Correct Answers ✔-income
statement, statement of stockholders' equity/retained earnings, balance sheet,
statement of cash flows
ACCT 351
, ACCT 351
Objectives of Financial Reporting -Correct Answers ✔-To Provide disclosures
required by GAAP
Qualitative Characteristics of Accounting Information -Correct Answers ✔-
Relevance and Faithful representation
Ingredients of the fundamental quality Relevance -Correct Answers ✔-predictive
value, confirmatory value, materiality
Ingredients of Fundamental Quality: Faithful Representation -Correct Answers ✔-
completeness, neutrality, free from error
Enhancing Qualities -Correct Answers ✔-Comparability, verifiability, timeliness,
and understandability
Comparability -Correct Answers ✔-Information that is measured and reported in a
similar manner for different companies
Verifiability -Correct Answers ✔-occurs when independent measurers, using the
same methods, obtain similar results
Timeliness -Correct Answers ✔-having information available to decision-makers
before it loses its capacity to influence decisions
Understandability -Correct Answers ✔-the quality of information that lets
reasonably informed users see its significance
Elements of Financial Statments -Correct Answers ✔-Assets, liabilities, equity,
investments by owners, distribution to owners, comprehensive income, revenues,
expenses, gains, losses
Comprehensive Income -Correct Answers ✔-The change in equity from nonowner
transactionsg
ACCT 351
Acct 351 Exam 1 Study Questions 100%
Correct Answers 2025-2026 Graded A+
What are the U.S. GAAP? -Correct Answers ✔-GAAP are guidelines, procedures,
and practices that a company is required to use in recording and reporting the
accounting information in its audited financial statemennts
They are like laws and are the rules that must be followed in audited financial
reporting. These guidelines, procedures, and practices have substantial
authoirtative support
What Role Does FASB play is US financial Reporting? -Correct Answers ✔-To
establish and improve standards of financial accounting and reporting for the
guidance and education of the public, including issuers, auditors, and users of
financial info
Due Process -Correct Answers ✔-1. Topic identified and placed on agenda
2. Research and analysis conducted and preliminary views of pros and cons issued
3. Public hearing on proposed standard
4. Board evaluates research and public response and issues exposure draft
5. Board evaluates responses and changes exposure draft, if necessary, final
statement issued
What is the role of the SEC in US financial reporting? -Correct Answers ✔-A
federal agency that has the broad powers to prescribe, in whatever detail it desires,
the accounting standards to be employed by companies that fall within its
jurisdiction
What are the four primary financial statements? -Correct Answers ✔-income
statement, statement of stockholders' equity/retained earnings, balance sheet,
statement of cash flows
ACCT 351
, ACCT 351
Objectives of Financial Reporting -Correct Answers ✔-To Provide disclosures
required by GAAP
Qualitative Characteristics of Accounting Information -Correct Answers ✔-
Relevance and Faithful representation
Ingredients of the fundamental quality Relevance -Correct Answers ✔-predictive
value, confirmatory value, materiality
Ingredients of Fundamental Quality: Faithful Representation -Correct Answers ✔-
completeness, neutrality, free from error
Enhancing Qualities -Correct Answers ✔-Comparability, verifiability, timeliness,
and understandability
Comparability -Correct Answers ✔-Information that is measured and reported in a
similar manner for different companies
Verifiability -Correct Answers ✔-occurs when independent measurers, using the
same methods, obtain similar results
Timeliness -Correct Answers ✔-having information available to decision-makers
before it loses its capacity to influence decisions
Understandability -Correct Answers ✔-the quality of information that lets
reasonably informed users see its significance
Elements of Financial Statments -Correct Answers ✔-Assets, liabilities, equity,
investments by owners, distribution to owners, comprehensive income, revenues,
expenses, gains, losses
Comprehensive Income -Correct Answers ✔-The change in equity from nonowner
transactionsg
ACCT 351
