ORGB 327 LESSON 1 COMPREHENSIVE
REVIEW 2026 FULL QUESTIONS AND
VERIFIED ANSWERS
◉ External Financial Statement Users Answer: are those whole relying
on companies' financial statements and related information to make
economic decisions.
◉ Financial Reporting Answer: the process of communicating financial
information to external financial statement users.
◉ Financial Statements Answer: include the statement of comprehensive
income, balance sheet, statement of stockholders equity, and a statement
of cash flows.
◉ Objective of general-purpose financial reporting Answer: provide
financial information about the reporting entity that is useful to existing
and potential investors, lenders, and other creditors in making decisions
about providing resources to the entity.
◉ Reporting Entity Answer: an organization or economic unit for which
financial statements are prepared.
◉ General Purpose financial reports Answer: not designed to show the
value or worth of the reporting entity.
, ◉ Financial reporting is focused on Answer: the needs of existing and
potential investors
◉ Accrual Accounting Answer: requires that an event that alters the
economic status of a company be recognized in the period in which the
event occurs rather than in the period when cash changes hands.
◉ The Securities act of 1933 Answer: requires that investors receive
financial and other information about securities held for sale in the
public.
◉ Securities and Exchange commission Answer: governmental
organization established in 1934, has direct and indirect regulatory
power over the accounting standards process.
◉ FASB's Mission Answer: to establish and improve accounting
standards that foster financial reporting and provide information to help
investors make decisions.
◉ Purpose of SOX Answer: introduce major changes to the regulation of
corporate governance and financial practice.
◉ Public Company Accounting Oversight Board (PCAOB) Answer:
formed to oversee the auditing profession, and reports to the SEC
REVIEW 2026 FULL QUESTIONS AND
VERIFIED ANSWERS
◉ External Financial Statement Users Answer: are those whole relying
on companies' financial statements and related information to make
economic decisions.
◉ Financial Reporting Answer: the process of communicating financial
information to external financial statement users.
◉ Financial Statements Answer: include the statement of comprehensive
income, balance sheet, statement of stockholders equity, and a statement
of cash flows.
◉ Objective of general-purpose financial reporting Answer: provide
financial information about the reporting entity that is useful to existing
and potential investors, lenders, and other creditors in making decisions
about providing resources to the entity.
◉ Reporting Entity Answer: an organization or economic unit for which
financial statements are prepared.
◉ General Purpose financial reports Answer: not designed to show the
value or worth of the reporting entity.
, ◉ Financial reporting is focused on Answer: the needs of existing and
potential investors
◉ Accrual Accounting Answer: requires that an event that alters the
economic status of a company be recognized in the period in which the
event occurs rather than in the period when cash changes hands.
◉ The Securities act of 1933 Answer: requires that investors receive
financial and other information about securities held for sale in the
public.
◉ Securities and Exchange commission Answer: governmental
organization established in 1934, has direct and indirect regulatory
power over the accounting standards process.
◉ FASB's Mission Answer: to establish and improve accounting
standards that foster financial reporting and provide information to help
investors make decisions.
◉ Purpose of SOX Answer: introduce major changes to the regulation of
corporate governance and financial practice.
◉ Public Company Accounting Oversight Board (PCAOB) Answer:
formed to oversee the auditing profession, and reports to the SEC
