BU 127 Exam Questions with Correct Answers Graded A+
Financial accounting reports - Answers Periodic financial statements and related disclosures
provided to external decision makers.
(creditors, investors)
Managerial accounting reports - Answers include detailed financial plans and continually
updated reports about the operating performance of the company
(Managers)
Statement of financial position - Answers reports the economic resources it owns and the
sources of financing for those resources.
Statement of earnings - Answers (the main component of the statement of comprehensive
income):
reports its ability to sell goods for more than their cost to acquire and sell.
Statement of changes in equity: - Answers reports additional contributions from or payments to
shareholders, and the amount of earnings the company reinvested for future growth
Statement of cash flows - Answers reports its ability to generate cash and how it was used -
(operating, investing (long-term assets) financing — debt or equity)
purpose of the statement of financial position (balance sheet) - Answers to report the financial
position (amount of assets, liabilities, and shareholders' equity) of an accounting entity at a
particular point in time.
heading of the statement of financial position identifies four significant items related to the
statement - Answers 1. Name of the accounting entity
2. Title of the statement
3. Specific date of the statement
4. Unit of measure
accounting entity - Answers organization for which financial data are to be collected and
reported
, Statement of financial position has three major captions - Answers 1: assets,
2: liabilities, and
3: shareholders' equity
assets (what the company owns) - Answers = liabilities + shareholder equity (what company
owes to shareholders and creditors)
Assets - Answers Economic resources controlled by the entity as a result of past business
events
Liabilities and shareholders' equity - Answers sources of financing for the company's economic
resources
Liabilities - Answers Indicate the amount of financing provided by creditors. They are the
company's debts or obligations.
Shareholders' equity - Answers indicates the amount of financing provided by owners of the
business and reinvested earnings.
contributed capital. - Answers The investment of cash and other assets in the business by the
shareholders
retained earnings - Answers The amount of earnings (profits) reinvested in the business (and
thus not distributed to shareholders in the form of dividends)
Assests (AR) - Answers Something company has that will create future value
Ex:
Inventory
Customer Relationships
Recipe
Debt - Answers Obligation of what a company owes
Ex:
consider: past events AND discretion to avoid
(consider cost of fixes by taking PV of what is owed)
Financial accounting reports - Answers Periodic financial statements and related disclosures
provided to external decision makers.
(creditors, investors)
Managerial accounting reports - Answers include detailed financial plans and continually
updated reports about the operating performance of the company
(Managers)
Statement of financial position - Answers reports the economic resources it owns and the
sources of financing for those resources.
Statement of earnings - Answers (the main component of the statement of comprehensive
income):
reports its ability to sell goods for more than their cost to acquire and sell.
Statement of changes in equity: - Answers reports additional contributions from or payments to
shareholders, and the amount of earnings the company reinvested for future growth
Statement of cash flows - Answers reports its ability to generate cash and how it was used -
(operating, investing (long-term assets) financing — debt or equity)
purpose of the statement of financial position (balance sheet) - Answers to report the financial
position (amount of assets, liabilities, and shareholders' equity) of an accounting entity at a
particular point in time.
heading of the statement of financial position identifies four significant items related to the
statement - Answers 1. Name of the accounting entity
2. Title of the statement
3. Specific date of the statement
4. Unit of measure
accounting entity - Answers organization for which financial data are to be collected and
reported
, Statement of financial position has three major captions - Answers 1: assets,
2: liabilities, and
3: shareholders' equity
assets (what the company owns) - Answers = liabilities + shareholder equity (what company
owes to shareholders and creditors)
Assets - Answers Economic resources controlled by the entity as a result of past business
events
Liabilities and shareholders' equity - Answers sources of financing for the company's economic
resources
Liabilities - Answers Indicate the amount of financing provided by creditors. They are the
company's debts or obligations.
Shareholders' equity - Answers indicates the amount of financing provided by owners of the
business and reinvested earnings.
contributed capital. - Answers The investment of cash and other assets in the business by the
shareholders
retained earnings - Answers The amount of earnings (profits) reinvested in the business (and
thus not distributed to shareholders in the form of dividends)
Assests (AR) - Answers Something company has that will create future value
Ex:
Inventory
Customer Relationships
Recipe
Debt - Answers Obligation of what a company owes
Ex:
consider: past events AND discretion to avoid
(consider cost of fixes by taking PV of what is owed)
