Rutgers Introduction to Financial
Accounting Exam 1 Questions and
answers 2025
Three Basic Activities of Accounting - ANS✓✓-identify, record, communicate
Internal Users - ANS✓✓-marketing, management, finance, human resources
External Users - ANS✓✓-investors and creditors
Ethics - ANS✓✓-standards of conduct by which one's actions are judged as right
or wrong; fair or unfair; honest or dishonest
Generally Accepted Accounting Principles (GAAP) - ANS✓✓-standards that are
generally accepted and universally practiced
Historical Cost Principle - ANS✓✓-dictates that companies record assets at their
cost
Fair Value Principle - ANS✓✓-states that assets and liabilities should be reported
at fair value
Monetary Unit Assumption - ANS✓✓-requires that companies include accounting
records only transaction data that can be expressed in fair terms of money
Economic Entity Assumption - ANS✓✓-requires that activities of the entity kept
separate and distinct from the other activities of its owner and all other economic
entities
