HORNGREN'S FINANCIAL AND MANAGERIAL
ACCOUNTING WITH VERIFIED QUESTIONS AND
ANSWERS AND BEST GRADED FINAL EXAMS
Accounting - -answer--The information system that measures business activities,
processes the information into reports, and communicates the results to decision
makers.
Cash Basis Accounting - -answer--Accounting method that records revenues only
when cash is received and expenses only when cash is paid.
Accrual Basis Accounting - -answer--Accounting method that records revenues when
earned and expenses when incurred.
Time Period Concept - -answer--Assumes that a business activates can be sliced
into small time segments and that financial statements can be prepared for specific
periods, such as a month, quarter, or year.
Fiscal Year - -answer--An accounting year of any 12 consecutive months that may or
may not coincide with the calendar year.
Revenue Recognition Principle - -answer--Requires companies to record revenue
when (or as) the entity satisfies each performance obligation.
Matching Principle - -answer--Guides accounting for expenses, ensures that all
expenses are recorded when they are incurred during the period, and matches those
expenses against the revenues of the period.
Adjusting Entry - -answer--An entry made at the end of the accounting period that is
used to record revenues to the period in which they are earned and expenses to the
period in which they occur.
Deferred Expense - -answer--An asset created when a business makes advance
payments of future expenses.
Property, Plant, and Equipment - -answer--Long-lived, tangible assets, such as land,
buildings, and equipment, used in the operation of a business.
Depreciation - -answer--The process by which businesses spread the allocation of a
plant asset's cost over its useful life.
Residual Value - -answer--The expected value of depreciable assets at the end of its
useful life.
Straight-Line Method - -answer--A depreciation method that allocates and equal
amount of depreciation each year [ (Cost - Residual Value)/ Useful life]
, Accumulated depreciation - -answer--The sum of all depreciation expense recorded
to date for a depreciable asset.
Contra Account - -answer--An account that is paired with, and is listed immediately
after, its related account in the chart of accounts and associated financial statement
and whose normal balance is the opposite of the normal balance of the related
account.
Book Value - -answer--A depreciable asset's cost minus accumulated depreciation.
Deferred Revenue - -answer--A liability created when a business collects cash from
customers in advance of completing a service or delivering a product.
Accrued Expense - -answer--An expense that the business has incurred but has not
yet paid.
Accrued Revenue - -answer--A revenue that has been earned but for which the cash
has not yet been collected.
Adjusted Trial Balance - -answer--A list of all accounts with their adjusted balances.
Worksheet - -answer--An internal document that helps summarize data for the
preparation of financial statements.
Financial Accounting - -answer--Provides information for external decision makers,
such as outside investors, lenders, customers, and the federal government.
Managerial Accounting - -answer--Focuses on information for internal decision
makers, such as the company's managers and employees.
Certified Public Accountants - -answer--Licensed professional accountants who
serve the general public.
Chartered Global Management Accountant - -answer--Accountants who have
advanced knowledge in finance, operations, strategy, and management.
Certified Management Accountant - -answer--Certified professionals who specialize
in accounting and financial management knowledge.
Certified Financial Planner - -answer--Work with individuals to help them budget,
plan for retirement, save for education, and manage their finances.
Financial Accounting Standards Board - -answer--A privately funded organization;
oversees the creation and governance of accounting standards.
Securities and Exchange Commission - -answer--The U.S. governmental agency
that oversees the U.S. financial markets.
Generally Accepted Accounting Principles - -answer--The main U.S. accounting rule
book and is currently created and governed by the FASB.
ACCOUNTING WITH VERIFIED QUESTIONS AND
ANSWERS AND BEST GRADED FINAL EXAMS
Accounting - -answer--The information system that measures business activities,
processes the information into reports, and communicates the results to decision
makers.
Cash Basis Accounting - -answer--Accounting method that records revenues only
when cash is received and expenses only when cash is paid.
Accrual Basis Accounting - -answer--Accounting method that records revenues when
earned and expenses when incurred.
Time Period Concept - -answer--Assumes that a business activates can be sliced
into small time segments and that financial statements can be prepared for specific
periods, such as a month, quarter, or year.
Fiscal Year - -answer--An accounting year of any 12 consecutive months that may or
may not coincide with the calendar year.
Revenue Recognition Principle - -answer--Requires companies to record revenue
when (or as) the entity satisfies each performance obligation.
Matching Principle - -answer--Guides accounting for expenses, ensures that all
expenses are recorded when they are incurred during the period, and matches those
expenses against the revenues of the period.
Adjusting Entry - -answer--An entry made at the end of the accounting period that is
used to record revenues to the period in which they are earned and expenses to the
period in which they occur.
Deferred Expense - -answer--An asset created when a business makes advance
payments of future expenses.
Property, Plant, and Equipment - -answer--Long-lived, tangible assets, such as land,
buildings, and equipment, used in the operation of a business.
Depreciation - -answer--The process by which businesses spread the allocation of a
plant asset's cost over its useful life.
Residual Value - -answer--The expected value of depreciable assets at the end of its
useful life.
Straight-Line Method - -answer--A depreciation method that allocates and equal
amount of depreciation each year [ (Cost - Residual Value)/ Useful life]
, Accumulated depreciation - -answer--The sum of all depreciation expense recorded
to date for a depreciable asset.
Contra Account - -answer--An account that is paired with, and is listed immediately
after, its related account in the chart of accounts and associated financial statement
and whose normal balance is the opposite of the normal balance of the related
account.
Book Value - -answer--A depreciable asset's cost minus accumulated depreciation.
Deferred Revenue - -answer--A liability created when a business collects cash from
customers in advance of completing a service or delivering a product.
Accrued Expense - -answer--An expense that the business has incurred but has not
yet paid.
Accrued Revenue - -answer--A revenue that has been earned but for which the cash
has not yet been collected.
Adjusted Trial Balance - -answer--A list of all accounts with their adjusted balances.
Worksheet - -answer--An internal document that helps summarize data for the
preparation of financial statements.
Financial Accounting - -answer--Provides information for external decision makers,
such as outside investors, lenders, customers, and the federal government.
Managerial Accounting - -answer--Focuses on information for internal decision
makers, such as the company's managers and employees.
Certified Public Accountants - -answer--Licensed professional accountants who
serve the general public.
Chartered Global Management Accountant - -answer--Accountants who have
advanced knowledge in finance, operations, strategy, and management.
Certified Management Accountant - -answer--Certified professionals who specialize
in accounting and financial management knowledge.
Certified Financial Planner - -answer--Work with individuals to help them budget,
plan for retirement, save for education, and manage their finances.
Financial Accounting Standards Board - -answer--A privately funded organization;
oversees the creation and governance of accounting standards.
Securities and Exchange Commission - -answer--The U.S. governmental agency
that oversees the U.S. financial markets.
Generally Accepted Accounting Principles - -answer--The main U.S. accounting rule
book and is currently created and governed by the FASB.
