FREE ACCOUNTING AND STUDY GAMES ABOUT ACCT 200

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FREE ACCOUNTING AND STUDY GAMES ABOUT ACCT 200

ASSUMPTIONS EXAM QUESTIONS

Qs and Ans Expert- Explanation

This Exam contains:

-Guarantee passing score -18 Questions and Answers -format set of multiple-choice -Expert- Explanation Question 1: What is the rationale for why plant assets are not reported at liquidation value

Answer:

The Going Concern Assumption

Question 2: Ensures that all relevant information is reported

Answer:

Full Disclosure Principle

Question 3: What are the four financial statements?

Answer:

Income Statement Statement of Retained Earnings Balance Sheet Statement of Cash Flows

Question 4: Give an example of Investing

Answer:

Purchasing Equipment Purchasing land Selling investment securities

selling a building Question 5: Assumes that the dollar is the "measuring stick" used to report on financial performance.

Answer:

Monetary unit assumption Question 6: What is the purpose of a Statement of Retained Earning's and who are the primary users

Answer:

Shows the amounts and causes of changes in retained earning during the period

Question 7: What is the accounting equation?

Answer:

Assets= Liabilities + Stockholders' Equity Question 8: What is the purpose of Statement of Cash Flows and who are their primary users?

Answer:

Provides financial information about the cash receipts and cash payments of a business for a specific period of time Question 9: Requires that accounting standards be followed for all items of significant size.

Answer:

Materiality Question 10: What is the purpose of a Balance Sheet and who are the primary users?

Answer:

Reports assets and claims at a specific point in time Question 11: Requires recognition of expenses in the same period as related revenues

Answer:

Expense recognition principle

Question 12: What is the purpose of an Income Statement and who are the primary users?

Answer:

Represents revenues an expenses for a period of time Question 13: Indicates that personal and business record-keeping should be separately maintained

Answer:

Economic entity assumption

Question 14: What does Debit mean? What does credit mean?

Answer:

Debit means "on the left" and is abbreviated Dr.Credit mean "on the right" and is abbreviated Cr.

Question 15: List three different types of business activities

Answer:

Financing, Operating, Investing

Question 16: Give an example of financing

Answer:

Issuing Common Stock Paying Dividends Borrowing Money (Notes Payable, Bonds Payable, etc.) Repaying Loans Question 17: Indicates that fair value changes subsequent to purchase are not recorded in the accounts

Answer:

Historical Cost Principle

Question 18: Give an example of Operating

Answer:

Revenues:

Sales of products or services Receipt of interest income

Expenses:

Payment of wages payment of selling expenses

payment of interest expense