Test Answers on Financial Accounting Flashcards

question creditor answer A business that gives you a loan is: question Obtain a car loan answer Having a low credit score can make it more difficult to: question One credit report from each credit bureau answer How many free credit reports are you legally entitled to each year? question Paying off your credit card […]

question Consumer answer A person or organization that buys/uses goods or services question Financial literacy answer The knowledge and skill set necessary to be an informed consumer and manage finances effectively question Credit answer The granting of a loan and the creation of a debt; any form of deferred payment question Loan answer A debt […]

question 5 C’s of Credit answer character, capacity, capital, collateral, conditions question Affinity Card answer a card issued in conjunction with a specific charity or organization. That group name is on the card and a % of purchases is donated to that group question APR on unpaid balance answer If you are a credit user, […]

question Capital Costs answer purchases of land, buildings, and equipment question CON legislation/social security amendments answer Certificate of need legislation 2 programs were enacted in 1974 in attempts to slow the growth in healthcare capital costs: National Health Planning and Resources Development Act, Social Security Amendments- both compelled hospitals to get permission from a governmental […]

question Accounting answer The process of recording, summarizing, analyzing, and interpreting financial activities to allow individuals and companies to make informed judgements and decisions question Accounting equation answer Assets= Liabilities+ Owners equity. Referred to as the basic accounting equation question Accounting period answer Time frame of which accounting records are maintained. Anywhere from a month […]

question account receivable answer – sold something (or provided service) on accounts (with terms such as net 30) question issues with accounts receivable answer 1. Recognizing (how do we recognize A/R) 2. Valuing (how do we value A/R) 3. Disposing (how do we dispose A/R) question types of receivable answer – account receivable: amounts that […]

question Process costing answer a product costing system that accumulates costs according to processes or departments question When is Process costing used? answer Used when outputs are standardized/ homogeneous question How often is the Production Cost report prepare? answer Is prepared each period (e.g., each month) for each department question In production cost report, what […]

question accounting equation answer assets=liabilities+owner’s equity question account answer the increases or decreases in a specific item caused by business transactions are recorded in an question accounts payable answer amount of money owed to the creditors of a business question accounts receivable answer the total amount of money to be received in the future for […]

question Financial Accounting (FI) answer Is concerned with recording the financial impacts of business processes as they are executed. Businesses use these data to generate financial statement to meet legal or regulatory reporting requirements. question Management Accounting (CO) answer Provides the information the organization needs to effectively manage the various processes. The reports focus on […]

question FICA answer Federal Insurance Contributions Act Tax question FICA shows up on paychecks as? answer social security and medicare question Half is paid by the _____ unless you are _____. answer employer self employed question Social security answer provides benefits for retirees, the disabled, and children of decreased workers question Medicare answer provides health […]

question Managerial Accounting answer A field of accounting that provides economic and financial information for managers and other INTERNAL users; places emphasis on special purpose accounting. question What are the 3 distinguishing features of Managerial Accounting vs. Financial Accounting? answer 1. Primary users of reports in financial accounting is EXTERNAL users: stockholders, creditors, and regulators. […]

question Personal financial planning answer the process of managing your money to achieve personal economic satisfaction question advantages of personal financial planning answer increased effectiveness in obtaining using and protecting resources. control by avoiding debt, bankruptcy and dependence on others for security. improved relationships resulting from well planned and communicated financial decisions. freedom from financial […]

question accounting answer the process of measuring economic activity of an entity in monetary terms and communicating results to users question four basic financial statements answer balance sheet, income statement, statement of stockholder’s equity, and statement of cash flows question balance sheet answer listing of a firm’s assets, liabilities, and stockholder’s equity as of a […]

question the month in the journal is recorded answer as the first entry on a page question cash payment answer check stubs and carbon copies provide information about question paying an account payable answer the flow of data through the accounting information systems does not include question entering the balance answer journalizing does not include […]

question Operating expenses are subtracted from fees earned for a service business and from gross profit for a merchandising business answer True question Net sales is equal to sales plus cost of merchandise sold answer False question The merchandise inventory account is found on the balance sheet answer True question Net income of loss may […]

question The chart of accounts is a special ledger used in accounting systems. answer True question In the first month of operations, the total of the debit entries to the Cash account amounted to $1,000 and the total of the credit entries to the Cash account amounted to $600. The Cash account has a answer […]

question The purpose of accounting is to provide financial information about an economic or social entity. answer True question In a sole proprietorship, the owner is responsible for the debts of the business if the firm is unable to pay. answer True question The separate entity assumption applies only to the corporate form of business. […]

question One external user of accounting information with a financial interest in a business is answer an investor. question Which of the following is a satisfactory statement of the accounting equation? answer Assets = Liabilities + Stockholders’ Equity question Which of the following is a measure of liquidity? answer Working capital question Which of the […]

question What are the 3 basic forms of business organizations? answer 1. Sole Proprietorships 2. Partnerships 3. Corporations question Closely Held answer corporation that issues stock to only a few people, often family members question Publicly Held answer A corporation that may have thousands of stockholders and whose stock is traded on a national securities […]

question What kinds of transactions are recorded in a purchases journal? answer Purchases of merchandise on account question For what are special amount columns in a journal used? answer Frequently occurring transactions question Why are their two account titles in the amount column of the purchases journal? answer Because the same two accounts are always […]

question False answer Controlling means overseeing the company’s day-to-day operations: question True answer The purpose of managerial accounting is to gather, summarize, and report the cost and revenue data relevant to each decision that is made. question True answer Planning, directing, and controlling are a manager’s three primary responsibilities. question True answer Managerial accounting develops […]