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ACCT 2101 Final Exam with complete
solutions latest version
Characteristics of a Sole Proprietorship - CORRECT ANSWER-one man operation
business's income is added to the income of the owner for tax purposes
unlimited liability
the business' income isn't taxed
no legal requirements to create it
Characteristics of a Partnership - CORRECT ANSWER-2+ individuals
jointly liable for taxes and other obligations
Characteristics of a Corporation - CORRECT ANSWER-many owners called
shareholders
limited liability
the owners are not held responsible for debts and obligations
double taxation
Accounting - CORRECT ANSWER-an information system that identifies information,
records it, then communicates information that is relevant, reliable, and comparable in
order to help users make better decisions
what type of accounting are we studying in this class? - CORRECT ANSWER-financial
accounting
4 principles of accounting - CORRECT ANSWER-cost principle
matching principle
revenue recognition principle
full disclosure principle
4 assumptions of accounting - CORRECT ANSWER-business entity assumption
time period assumption
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going concern assumption
monetary unit assumption
cost principle - CORRECT ANSWER-things should be recorded at what they were paid
for and not what their value is
revenue recognition principle - CORRECT ANSWER-helps guide companies in when to
record their revenues
matching principle - CORRECT ANSWER-a company must record its expenses
incurred to generate its revenue
full disclosure principle - CORRECT ANSWER-a company is required to disclose all
information that would impact a user's decision
going concern assumption - CORRECT ANSWER-you assume that the company will
last forever
time period assumption - CORRECT ANSWER-the life of a business can be broken
down into distinct time periods such as months or years in order to make reports about
them
monetary unit assumption - CORRECT ANSWER-transactions are expressed using
"money" as a denominator -- just different currencies
business entity assumption - CORRECT ANSWER-a business is accounted for
separately from its owner or other businesses -- their information is recorded differently
who is accountable for setting accounting principles? - CORRECT ANSWER-Securities
and Exchange Commission (SEC) but they give the responsiblity to FASB (Financial
Accounting Standards Board)
sarbanes-oxley act - CORRECT ANSWER-tries to reduce chances of accounting
scandals -- solid internal control structure
an amount owned by a company - CORRECT ANSWER-an asset
examples of assets: - CORRECT ANSWER-accounts receivable
notes receivable
cash
resources that have future benefits (prepaid)
supplies, building, land, equipment
liabilities - CORRECT ANSWER-a creditor's claim on assets -- what you
owe/obligations
examples of liabilities - CORRECT ANSWER-accounts payable
BRAINSCAPE1
ACCT 2101 Final Exam with complete
solutions latest version
Characteristics of a Sole Proprietorship - CORRECT ANSWER-one man operation
business's income is added to the income of the owner for tax purposes
unlimited liability
the business' income isn't taxed
no legal requirements to create it
Characteristics of a Partnership - CORRECT ANSWER-2+ individuals
jointly liable for taxes and other obligations
Characteristics of a Corporation - CORRECT ANSWER-many owners called
shareholders
limited liability
the owners are not held responsible for debts and obligations
double taxation
Accounting - CORRECT ANSWER-an information system that identifies information,
records it, then communicates information that is relevant, reliable, and comparable in
order to help users make better decisions
what type of accounting are we studying in this class? - CORRECT ANSWER-financial
accounting
4 principles of accounting - CORRECT ANSWER-cost principle
matching principle
revenue recognition principle
full disclosure principle
4 assumptions of accounting - CORRECT ANSWER-business entity assumption
time period assumption
BRAINSCAPE1
, BRAINSCAPE1
going concern assumption
monetary unit assumption
cost principle - CORRECT ANSWER-things should be recorded at what they were paid
for and not what their value is
revenue recognition principle - CORRECT ANSWER-helps guide companies in when to
record their revenues
matching principle - CORRECT ANSWER-a company must record its expenses
incurred to generate its revenue
full disclosure principle - CORRECT ANSWER-a company is required to disclose all
information that would impact a user's decision
going concern assumption - CORRECT ANSWER-you assume that the company will
last forever
time period assumption - CORRECT ANSWER-the life of a business can be broken
down into distinct time periods such as months or years in order to make reports about
them
monetary unit assumption - CORRECT ANSWER-transactions are expressed using
"money" as a denominator -- just different currencies
business entity assumption - CORRECT ANSWER-a business is accounted for
separately from its owner or other businesses -- their information is recorded differently
who is accountable for setting accounting principles? - CORRECT ANSWER-Securities
and Exchange Commission (SEC) but they give the responsiblity to FASB (Financial
Accounting Standards Board)
sarbanes-oxley act - CORRECT ANSWER-tries to reduce chances of accounting
scandals -- solid internal control structure
an amount owned by a company - CORRECT ANSWER-an asset
examples of assets: - CORRECT ANSWER-accounts receivable
notes receivable
cash
resources that have future benefits (prepaid)
supplies, building, land, equipment
liabilities - CORRECT ANSWER-a creditor's claim on assets -- what you
owe/obligations
examples of liabilities - CORRECT ANSWER-accounts payable
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