FREE ACCOUNTING AND STUDY GAMES ABOUT BA311

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FREE ACCOUNTING AND STUDY GAMES ABOUT BA311

EXAM QUESTIONS

Actual Qs and Ans Expert-Verified Explanation

This Exam contains:

-Guarantee passing score -58 Questions and Answers -format set of multiple-choice -Expert-Verified Explanation

Question 1: Obligation to transfer resources arising from a past transaction

Answer:

Liability

Question 2: Reporting must be done at defined time intervals

Answer:

Periodicity

Question 3: Revenue is recorded at point of sale

Answer:

Revenue Recognition

Question 4: Full Disclosure Principle

Answer:

Providing information that is of sufficient importance to influence judgement and decisions of an informed user

Question 5: What are the FOUR Accounting Principles?

Answer:

Measurement Revenue Recognition Expense Recognition Full Disclosure

Question 6: An allowance for doubtful accounts is established

Answer:

Expense Recognition

Question 7: Revenue Recognition Principle

Answer:

Revenue is recognized when it is BOTH Recognized / Realizable AND Earned

Question 8: What are the basic elements of Financial Statements?

Answer:

Assets, Liabilities, Equity, Investment by Owners, Revenues/Expenses, Gains/Losses

Question 9: All payments out of petty cash are charged to Miscellaneous Expense

Answer:

Materiality Question 10: Each enterprise is kept as a unit distinct from its owner or owners

Answer:

Economic Entity Question 11: Separates financial information into time periods for reporting purposes

Answer:

Periodicity

Question 12: Rationale why plant assets are not reported at liquidation value

Answer:

Going concern principle

Question 13: Ensures that all relevant financial information is reported

Answer:

Full disclosure principle

Question 14: Historical Cost Principle

Answer:

Reporting assets and liabilities based on the acquisition price Question 15: Indicates fair value changes subsequent to purchase are not recorded in the accounts

Answer:

Historical Cost Question 16: Information that is measured and reported in a similar matter for different

companies is considered:

Answer:

Comparability

Question 17: What are the THREE PRIMARY ingredients for RELIABILITY

Answer:

Verifiable Representational Faithfulness Neutrality Question 18: What are the TWO SECONDARY qualities that make accounting information useful for decision making?

Answer:

Comparability Consistency

Question 19: Materiality

Answer:

Decision to report items that are significant (Material) in comparison to ones that are insignificant (Immaterial). Think of the waste basket example

Question 20: Conservatism

Answer:

When in doubt, choose the solution that is least likely to overstate assets or income

Question 21: Expense Recognition Principle

Answer:

MATCH efforts (EXPENSE) with accomplishment (REVENUE)

Question 22: The use of consolidated statements is justified

Answer:

Economic Entity

Question 23: What industries ignore the Revenue Recognition Principle?

Answer:

Construction, Farming, Real Estate

Question 24: Permits the use of fair value valuation in certain industries

Answer:

Industrial practices

Question 25: Economic Entity Assumption

Answer:

Economic activity applies to a unit of accountability Question 26: Financial information is presented so that investors will not be misled

Answer:

Full Disclosure Principle

Question 27: Industry Practice

Answer:

Particular industries may depart from GAAP due to the nature of their industry. In example: Farmers or Utility Companies