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TAMU ACCT 229 - Exam 1 Questions & Answers Already Graded A+, Exams of Advanced Education

Widener University - DelawareAdvanced Education

3 types of business activities - CORRECT ANSWER-financing, investing, operating Operating Activities - CORRECT ANSWER-everyday activities -sell inventory, pay employees Investing Activities - CORRECT ANSWER-how you grow your company -buying building, equipment, vehicles, fixtures

Typology: Exams

2024/2025

Available from 06/29/2025

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TAMU ACCT 229 - Exam 1
3 types of business activities - CORRECT ANSWER-financing, investing, operating
Operating Activities - CORRECT ANSWER-everyday activities
-sell inventory, pay employees
Investing Activities - CORRECT ANSWER-how you grow your company
-buying building, equipment, vehicles, fixtures
Financing Activities - CORRECT ANSWER-how you pay for your growth
-borrow money: temporary financing
-issue stock: permanent
4 financial statements - CORRECT ANSWER-Income statement
Statement of Retained Earnings
Balance Sheet
Statement of Cash Flows
What does a balance sheet show? - CORRECT ANSWER-Shows the financial position
of a company at a point in time. A = L + SHE
Assests - CORRECT ANSWER-what a company owns, or what is owed to a company
Laiabilities - CORRECT ANSWER-what the company owes
Stockholders Equity - CORRECT ANSWER-ownership. (common stock & retained
earnings)
Monetary Unity Assumption - CORRECT ANSWER-Only transactions that can be
expressed in terms of money can be included in the accounting records
Economic Entity Assumption - CORRECT ANSWER-Activities of the business are
separate from activities of the owners
Time Period Assumption - CORRECT ANSWER-The long life of a company can be
reported over a series of shorter time periods. Makes it possible to prepare the Income
Statements for a specific time period.
3 types of businesses - CORRECT ANSWER-sole proprietorship, partnership,
corporation
unlimited liability - CORRECT ANSWER-sole proprietorship & partnership
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TAMU ACCT 229 - Exam 1

3 types of business activities - CORRECT ANSWER-financing, investing, operating Operating Activities - CORRECT ANSWER-everyday activities

  • sell inventory, pay employees Investing Activities - CORRECT ANSWER-how you grow your company
  • buying building, equipment, vehicles, fixtures Financing Activities - CORRECT ANSWER-how you pay for your growth
  • borrow money: temporary financing
  • issue stock: permanent 4 financial statements - CORRECT ANSWER-Income statement Statement of Retained Earnings Balance Sheet Statement of Cash Flows What does a balance sheet show? - CORRECT ANSWER-Shows the financial position of a company at a point in time. A = L + SHE Assests - CORRECT ANSWER-what a company owns, or what is owed to a company Laiabilities - CORRECT ANSWER-what the company owes Stockholders Equity - CORRECT ANSWER-ownership. (common stock & retained earnings) Monetary Unity Assumption - CORRECT ANSWER-Only transactions that can be expressed in terms of money can be included in the accounting records Economic Entity Assumption - CORRECT ANSWER-Activities of the business are separate from activities of the owners Time Period Assumption - CORRECT ANSWER-The long life of a company can be reported over a series of shorter time periods. Makes it possible to prepare the Income Statements for a specific time period. 3 types of businesses - CORRECT ANSWER-sole proprietorship, partnership, corporation unlimited liability - CORRECT ANSWER-sole proprietorship & partnership

limited liability - CORRECT ANSWER-corporation Sole Proprietorship - CORRECT ANSWER-one owner advantage: easy to form separate entity for accounting purposes not a separate entity for legal purposes or tax purposes Partnership - CORRECT ANSWER-two or more owners separate entity for accounting purposes not a separate entity for legal or tax purposes Corporations - CORRECT ANSWER-business incorporated under the laws of a particular state. Advantages: limited liability, continuity of life, ease in transfer of stock (ownership), opportunity to raise large amounts of money by selling shares of stock to a large number of people. Going Concern Assumption - CORRECT ANSWER-The company will not go out of business in the near future. Not liquidating. Historical Cost Principle - CORRECT ANSWER-record assets at the cost paid to acquire them Full Discloser Principle - CORRECT ANSWER-Provide all information sufficiently important to influence decision GAAP - CORRECT ANSWER-Generally Accepted Accounting Principles. Rules and assumptions under which financial statements must be prepared. (USA). SEC - CORRECT ANSWER-Securities and Exchange Commission.

  • ultimate authority - THE ENFORCER FASB - CORRECT ANSWER-Financial Accounting Standards Board.
  • sets accounting standards in the US AICPA - CORRECT ANSWER-American Institute of Certified Public Accountants.
  • advises FASB. Professional organization for CPAs PCAOB - CORRECT ANSWER-Public Company Accounting Oversight Board.
  • set audit standards IASB - CORRECT ANSWER-International Accounting Standards Board.
  • created in 2001. Developed world wide accounting standards

Faithful Representation - CORRECT ANSWER-is complete, neutral, and free from error Comparability - CORRECT ANSWER-allows user to analyze two or more companies and look for similarities or differences.

  • compare company one 8/2016 to company 2 8/ Consistency - CORRECT ANSWER-allows comparisons within a company from one accounting period to the next.
  • compare company 1 8/2016 to company 1 8/ Materiality - CORRECT ANSWER-the dollar magnitude of the transaction makes a difference in how it is recorded. Does an error in any way affect the judgment of someone relying on the information. Conservatism - CORRECT ANSWER-dont overstate assets or revenues, dont understate liabilities or expenses. Use least optimistic estimate when two estimates of amounts are about equally likely How to analyze profitability - CORRECT ANSWER-Gross Profit Ratio Profit Margin Gross Profit & Ratio - CORRECT ANSWER-ratio of gross profit to sales. Rev - COGS = Gross Profit GP/Sales = GPR Profit Margin - CORRECT ANSWER-Return on sales - ratio of net income to sales. Shows profitability of company. net income/Sales = profit margin How to analyze liquidity - CORRECT ANSWER-Working Capital Current Ratio Working capital - CORRECT ANSWER-current assets - current liabilities Current ratio - CORRECT ANSWER-current assets/current liabilities Assets - CORRECT ANSWER-future economic benefits (resources) owned by or owed to the firm cash - CORRECT ANSWER-current asset

MES (marketable equity securities) - CORRECT ANSWER-current asset Accounts Receivable - CORRECT ANSWER-current assets Inventory - CORRECT ANSWER-current assets Supplies (on hand) - CORRECT ANSWER-current assets Prepaid Expenses - CORRECT ANSWER-current assets Land - CORRECT ANSWER-non-current assets Building - CORRECT ANSWER-non-current assets Equipment - CORRECT ANSWER-non-current assets Furniture & Fixtures - CORRECT ANSWER-non-current assets Vehicle - CORRECT ANSWER-non-current assets Accumulated Depreciation - CORRECT ANSWER-non-current assets (CONTRA ASSET) Plant, Property, & Equipment (fixed assets) - CORRECT ANSWER-acquired for use in business rather than resale to customers. Land, building, equipment, Furniture and fixtures, vehicles, AD Intangible Assets - CORRECT ANSWER-lack physical substance, but help to generate revenue Intangible Assets - CORRECT ANSWER-patent, trademark, copyright, franchise, goodwill accounts payable - CORRECT ANSWER-current liability wages payable - CORRECT ANSWER-current liability accrued expense - CORRECT ANSWER-current liability unearned revenue - CORRECT ANSWER-current liability notes payable - CORRECT ANSWER-current liability