MBA PrepWorks Ivy Software - Financial
Accounting questions with answers
GAAP - CORRECT ANSWERS ✔✔Generally Accepted Accounting Principles.
The standards and rules that accountants follow while recording and reporting
financial activities.
Economic Entity - CORRECT ANSWERS ✔✔Company keeps its activity
separate from its owners and other businesses. One firm, one set of books.
Going Concern - CORRECT ANSWERS ✔✔The accounting assumption that a
business is expected to operate indefinitely. Assumes the company will continue
so asset values are at a historical cost.
Monetary Unit - CORRECT ANSWERS ✔✔Financial transactions are
denominated in a stable unit of measure. Everything is in US dollars
Accounting Periods - CORRECT ANSWERS ✔✔The results of operations for an
entity must be reported on a periodic basis, usually a year
Revenue/Expense Matching - CORRECT ANSWERS ✔✔All expenses incurred
to generate revenues should be recognized during the same period as those
revenues
Conservatism - CORRECT ANSWERS ✔✔Accounting theory advocates that it
is better for potential measurement errors to understate rather than overstate
profits
