ACC 225 ACC225 Module 1 Check Your Understanding Answers (AAU Online)

ACC 225 ACC225 Module 1 Check Your Understanding Answers (AAU Online)


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ACC 225 Module 1 Check Your Understanding (AAU Online)

1.List the functions of an accounting system.

2.What types of decisions are made based on accounting information?

3.List 6 users of external financial reports are:

4.What information does the balance sheet show?

5.What are the responsibilities of the Securities and Exchange Commission (SEC)?

6.What is the role of the International Accounting Standards Board (IASB)?

7.What agency was created by the Securities and Exchange Commission (SEC) as a means of restoring public confidence to accounting?

8.What are some of the ways that technology has impacted accounting?

9.List 4 types of assets.

10.If a company has $15,000 in assets and $10,000 in equities, what are its liabilities?

11.What are the primary financial statements?

12.What are the four types of financial statement footnotes?

13.What is the separate entity concept?

14.What is the going concern assumption?

15.What are arm’s-length transactions?

16.What are the notes to the financial statements?

17.Describe each of the 4 activities on a cash flow statement.

18.Explain the fundamental concepts and assumptions that underlie financial accounting.

19.If you were an investor, which financial statement would you be concerned in reviewing?

20.Assume you want to invest in the stock market and your friends tell you about a company’s stock that is “guaranteed” to have an annual growth rate of 150%.  Should you trust your friends and invest immediately or should you research the company’s financial statements before investing?

21.You are thinking of investing in one of two companies.  In one annual report, the auditor’s opinion states that the financial statements were prepared in accordance with generally accepted accounting principles.  The other makes no such claim.  How important is that to you?  Explain.

22.Explain why each of the following is important in accounting: I answered all of these in the questions above!

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