Exam 1 Review

Question 1

what is an adjusting entry?

Answer 1

identifies debit and credit

Question 2

What time period does balance sheet measure?

Answer 2

specific point in time

Question 3

What time period does income statement measure?

Answer 3

period of time

Question 4

What time period does statement of stockholders equity

Answer 4

period of time

Question 5

An example of an adjusting entry would include

Answer 5

income statement account and a balance sheet account

Question 6

Fraud Triangle

Answer 6

Opportunity, Pressure/Motive, Rationalization

Question 7

Form of a business organization that is legally separate from its owners

Answer 7

Corporation

Question 8

Why do we have deferred revenue ?

Answer 8

Deferred revenue is a liability on companies balance sheet that represents a prepayment by its customers for goods or services that have yet to be delivered

Question 9

What is the body of rules and procedures that guide

Answer 9

GAAP

Question 10

Reason why the bank statement would not equal the company books

Answer 10

Outstanding checks, bank service charges, company error

Question 11

Separation of duties?

Answer 11

Having more than one person required to complete a task. used by organizations to prevent fraud

Question 12

Which accounts are increased on the debit side and decreased on the credit side?

Answer 12

a. Assets, expenses, dividends
b. Liabilities, stockholders equity accounts

Question 13

What is the role of the PCAOB

Answer 13

fine people and put them in jail
made after SOX act
Oversee audits
Protect investors
Further public interest through preparation of informative and accurate accounting statements

Question 14

Different types of activities?

Answer 14

Operating, financing, investing

Question 15

IRS

Answer 15

Internal Revenue service

Question 16

SEC

Answer 16

security and exchange commission

Question 17

IASB

Answer 17

International accounting standard board

Question 18

FASB

Answer 18

Financial accounting standard board

Question 19

What are detective controls?

Answer 19

defined to find errors or problems after the transaction has occurred

Question 20

Role of independent auditors

Answer 20

Examines the company’s financial statements and provides a written report that contains an opinion as to whether the financial statements are fairly stated and comply with GAAP

Question 21

In what order are the financial statements prepared?

Answer 21

Trial Balance
Adjusted trial balance
income statement
balance sheet
statement of stockholders equity