Prepare for your Accounting 101 exam with these practice questions and answers. This guide covers debits and credits, the accounting cycle, financial statements, and fundamental accounting principles.
Q: financial statements
Answer: statement of financial position (balance sheet), income statement, statement of cash flows
Q: public accounting
Answer: segment of accounting profession that relates to providing audit, tax, and consulting services to clients
Q: financial accounting
Answer: area of accounting that refers to providing information to support external investment and credit decisions
Q: bookkeeping
Answer: procedural aspect of accounting that involves keeping detailed records of business transactions, much of which is done today by computers
Q: internal control
Answer: procedures and processes within an organization that ensure the integrity of accounting information
Q: financial reporting
Answer: broad term that describes all information provided to external users, including but not limited to financial statements
Q: management accounting
Answer: area of accounting that refers to providing information to support internal management decisions
Q: general purpose assumption
Answer: fact that the same information is provided to various external users, including investors and creditors
Q: integrity
Answer: important quality of accounting information that allows investors, creditors, management, and other users to rely on the information
Q: International Accounting Standards Board (IASB)
Answer: group that creates and promotes International Financial Reporting Standards (IFRSs)
Q: American Institute of CPAs (AICPA)
Answer: Professional association of Certified Public Accountants
Q: American Accounting Association (AAA)
Answer: Organization consisting primarily of accounting educators that encourages improvements in teaching and research
Q: Institute of Internal Auditors (IIA)
Answer: International organization dedicated to the advancement of internal auditing
Q: Financial Accounting Standards Board (FASB)
Answer: Private-sector organization that establishes accounting standards
Q: Public Company Accounting Oversight Board (PCAOB)
Answer: body charged with setting auditing standards for audits of public companies
Q: Institute of Management Accountants (IMA)
Answer: Organization dedicated to providing members personal and professional development opportunities in the area of management accounting
Q: Securities and Exchange Commission (SEC)
Answer: Government agency responsible for financial reporting by publicly held companies