CBAD 201- FINANCIAL ACCOUNTING
FINAL REVIEW EXAM QUESTIONS AND
ANSWERS GRADED A+ 2025/2026
Accounting is... - ANS The information system that identifies, records, and communicates the
economic events of an organization to interested users.
Who uses accounting information? - ANS Individuals, investors and creditors, regulatory
bodies, nonprofit organizations
Financial Accounting - ANS accounting information and analyses prepared for people outside
the organization
Managerial Accounting - ANS accounting used to provide information and analyses to
managers inside the organization to assist them in decision making
Proprietorship - ANS A business owned by one person
Partnership - ANS A business in which two or more persons combine their assets and skills
Limited Liability Company - ANS A business organization in which the business (not the
owner) is liable for the company's debts
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, Corporation - ANS A business owned by stockholders who share in its profits but are not
personally responsible for its debts
the entity assumption - ANS Organization stands apart from other organizations and
individuals as a separate economic unit
the continuity assumption - ANS States that businesses are assumed to continue to operate
into the foreseeable future.
Historical Cost Principle - ANS An accounting principle that states that companies should
record assets at their cost.
stable monetary unit assumption - ANS The reason for ignoring the effect of inflation in the
accounting records, based on the assumption that the dollar's purchasing power is relatively
stable.
Accounting Equation - ANS An equation showing the relationship among assets, liabilities,
and owner's equity
assets - ANS money and other valuables belonging to an individual or business
liabilities - ANS Amounts owed to creditors
Stockholders' Equity - ANS The owners' claim to assets.
paid-in capital - ANS the amount stockholders have invested in the company
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
FINAL REVIEW EXAM QUESTIONS AND
ANSWERS GRADED A+ 2025/2026
Accounting is... - ANS The information system that identifies, records, and communicates the
economic events of an organization to interested users.
Who uses accounting information? - ANS Individuals, investors and creditors, regulatory
bodies, nonprofit organizations
Financial Accounting - ANS accounting information and analyses prepared for people outside
the organization
Managerial Accounting - ANS accounting used to provide information and analyses to
managers inside the organization to assist them in decision making
Proprietorship - ANS A business owned by one person
Partnership - ANS A business in which two or more persons combine their assets and skills
Limited Liability Company - ANS A business organization in which the business (not the
owner) is liable for the company's debts
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, Corporation - ANS A business owned by stockholders who share in its profits but are not
personally responsible for its debts
the entity assumption - ANS Organization stands apart from other organizations and
individuals as a separate economic unit
the continuity assumption - ANS States that businesses are assumed to continue to operate
into the foreseeable future.
Historical Cost Principle - ANS An accounting principle that states that companies should
record assets at their cost.
stable monetary unit assumption - ANS The reason for ignoring the effect of inflation in the
accounting records, based on the assumption that the dollar's purchasing power is relatively
stable.
Accounting Equation - ANS An equation showing the relationship among assets, liabilities,
and owner's equity
assets - ANS money and other valuables belonging to an individual or business
liabilities - ANS Amounts owed to creditors
Stockholders' Equity - ANS The owners' claim to assets.
paid-in capital - ANS the amount stockholders have invested in the company
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
