ACCT 3309 Final Exam Questions with Correct Answers Latest Update 2025/2026
For what purpose to we keep records? - Answers to help make business decision
Fundamental Demand For Accounting: - Answers To help guide exchange
What records should you keep? - Answers How much did I sell last year?
Helps decide how much wheat to grow this year
How much wheat do I own right now?
Helps identify the scale of possible transactions
Was this customer a reliable exchange partner in
the past?
Helps identify whether you should continue doing
business with that customer
Why do we need recordkeeping? - Answers Humans are fallible our memory storage is finite
Recordkeeping supplements memory as exchange
between strangers becomes common
How does recordkeeping promote exchange? - Answers Record keeping improves our memory
of past
interactions in a complex exchange environment, which
promotes reputation formation (you can develop a reputation for trustworthiness) and
cooperation
Recordkeeping promotes TRUST and reduces the risk of loss from exchanging with strangers
TRUST before laws and contracts
,Recordkeeping (i.e., accounting) has a
central role in expanding the scale, scope, and complexity of - Answers human exchange
Accounting is an evolved economic institution that is - Answers Vital to the development of
human civilization
Vital to humans' recent economic development
Accounting is - Answers a SYSTEM for providing financial information
Two types of accounting are - Answers Managerial and Financial
Managerial accounting is designed primarily for decision makers _____________ the company -
Answers within
(demand arises as soon as the business is formed)
Financial accounting is designed to provide information to decision makers __________ the
company - Answers outside
(Demand arises in a later stage of business development)
Factors of Managerial accounting - Answers Looks forward
Provides information for improving decisions
Internal users only : for the firms managers
Factors of financial accounting - Answers Looks backward
Reports what has happened
To report the firms history to users via annual
and quarterly financial reports
,called financial statements
Sole Proprietorship - Answers a business owned and managed by a single individual
Corporation - Answers Issue shares of stock to raise equity capital
Stockholders - Answers Owners of the corporation, notusually involved in
day‐to‐day business decisions
residual claimant - Answers a stockholder's right to receive whatever remains after all other
claims against a firm's assets have been satisfied
_____________ have no access to internal company data, no access to managerial accounting -
Answers Stockholders
Board of directors - Answers Represents shareholder interests, hire & oversee management
Use financial information to review the results of operations, evaluate future strategy, and to
assess management performance
Creditors:
Company can __________ (from a bank or another
source) to raise credit capital - Answers Borrow
Suppliers - Answers Companies that supply you with raw material that you
use in your business
Potential investors - Answers Individual investors, institutional investors, also credit
rating agencies and security analysts (environment)
Potential investors use financial information to assess investment
______ and expected investment ___________ - Answers Risk and return
Finance is the area of fin
ancial management that
supervises the acquisition and disposition of the
firm's____________ - Answers Resources
The nature of business -the economic process
, businesses follow -is to: - Answers Obtain capital
To make investments
To generate positive revenue
The general group of ________ owned by the firm are its assets - Answers resources
Characteristic of an asset - Answers Must be owned or controlled by the company
it must provide expected value
Liabilities represent the _____ that a firm has to outside creditors - Answers Obligation
A liability should be reported if the following three conditions are met: - Answers 1. The future
sacrifice is probable
2. The amount of the obligation is known or can be reasonably estimated
3. The transaction or even that caused the obligation has occurred ("in the past")
Two primary categories of equity - Answers Contributed capital and retained earnings
Contributed Capital - Answers amounts paid directly to the firm for shares or ownership
Retained earnings ("earned" capital) - Answers the portion of the INCOME that the firm has
earned over the years that has not been distributed to the owners in the form of dividends
Retained earnings represent a ________ on a portion of the firm's assets and are not an asset
themselves - Answers claim
An important point that I want to reinforce is that "equity" refers to the ownership stake - that is,
what the owners have a ________ to. - Answers claim
Balance sheet accounting equation - Answers Assets = Liabilities + Owner's Equity
right side is assets, left side is liabilities
For what purpose to we keep records? - Answers to help make business decision
Fundamental Demand For Accounting: - Answers To help guide exchange
What records should you keep? - Answers How much did I sell last year?
Helps decide how much wheat to grow this year
How much wheat do I own right now?
Helps identify the scale of possible transactions
Was this customer a reliable exchange partner in
the past?
Helps identify whether you should continue doing
business with that customer
Why do we need recordkeeping? - Answers Humans are fallible our memory storage is finite
Recordkeeping supplements memory as exchange
between strangers becomes common
How does recordkeeping promote exchange? - Answers Record keeping improves our memory
of past
interactions in a complex exchange environment, which
promotes reputation formation (you can develop a reputation for trustworthiness) and
cooperation
Recordkeeping promotes TRUST and reduces the risk of loss from exchanging with strangers
TRUST before laws and contracts
,Recordkeeping (i.e., accounting) has a
central role in expanding the scale, scope, and complexity of - Answers human exchange
Accounting is an evolved economic institution that is - Answers Vital to the development of
human civilization
Vital to humans' recent economic development
Accounting is - Answers a SYSTEM for providing financial information
Two types of accounting are - Answers Managerial and Financial
Managerial accounting is designed primarily for decision makers _____________ the company -
Answers within
(demand arises as soon as the business is formed)
Financial accounting is designed to provide information to decision makers __________ the
company - Answers outside
(Demand arises in a later stage of business development)
Factors of Managerial accounting - Answers Looks forward
Provides information for improving decisions
Internal users only : for the firms managers
Factors of financial accounting - Answers Looks backward
Reports what has happened
To report the firms history to users via annual
and quarterly financial reports
,called financial statements
Sole Proprietorship - Answers a business owned and managed by a single individual
Corporation - Answers Issue shares of stock to raise equity capital
Stockholders - Answers Owners of the corporation, notusually involved in
day‐to‐day business decisions
residual claimant - Answers a stockholder's right to receive whatever remains after all other
claims against a firm's assets have been satisfied
_____________ have no access to internal company data, no access to managerial accounting -
Answers Stockholders
Board of directors - Answers Represents shareholder interests, hire & oversee management
Use financial information to review the results of operations, evaluate future strategy, and to
assess management performance
Creditors:
Company can __________ (from a bank or another
source) to raise credit capital - Answers Borrow
Suppliers - Answers Companies that supply you with raw material that you
use in your business
Potential investors - Answers Individual investors, institutional investors, also credit
rating agencies and security analysts (environment)
Potential investors use financial information to assess investment
______ and expected investment ___________ - Answers Risk and return
Finance is the area of fin
ancial management that
supervises the acquisition and disposition of the
firm's____________ - Answers Resources
The nature of business -the economic process
, businesses follow -is to: - Answers Obtain capital
To make investments
To generate positive revenue
The general group of ________ owned by the firm are its assets - Answers resources
Characteristic of an asset - Answers Must be owned or controlled by the company
it must provide expected value
Liabilities represent the _____ that a firm has to outside creditors - Answers Obligation
A liability should be reported if the following three conditions are met: - Answers 1. The future
sacrifice is probable
2. The amount of the obligation is known or can be reasonably estimated
3. The transaction or even that caused the obligation has occurred ("in the past")
Two primary categories of equity - Answers Contributed capital and retained earnings
Contributed Capital - Answers amounts paid directly to the firm for shares or ownership
Retained earnings ("earned" capital) - Answers the portion of the INCOME that the firm has
earned over the years that has not been distributed to the owners in the form of dividends
Retained earnings represent a ________ on a portion of the firm's assets and are not an asset
themselves - Answers claim
An important point that I want to reinforce is that "equity" refers to the ownership stake - that is,
what the owners have a ________ to. - Answers claim
Balance sheet accounting equation - Answers Assets = Liabilities + Owner's Equity
right side is assets, left side is liabilities
