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Intermediate Accounting Final, Exams of Advanced Education

Abilene Christian University (ACU)Advanced Education

Intermediate Accounting Final---

Typology: Exams

2025/2026

Available from 02/16/2026

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Intermediate Accounting Final
Financial Accounting - correct answer Has an external focus
Who uses Financial Accounting? - correct answer Competitors,
consumers/customers, stockholders/owners, potential stockholders/investors,
IRS/Government
What do those using Financial Accounting use? - correct answer Financial
Statements:
1. Income Statement (NI=Rev-Ex)
2. Retained Earnings Statement (Beg RE+NI-Div Declared=E RE
3. Balance Sheet (A=L+OE)
4. Statement of Cash Flow (Operating, Investing, Financing)
How do those using financial accounting report to users? - correct answer By
following GAAP (Generally Accepted Accounting Princ)
Managerial Accounting - correct answer Internal Focus
Who uses Managerial Accounting? - correct answer Employees=decision makers
What do those using managerial accounting use? - correct answer Specialized
reports
How do those using managerial accounting report to users? - correct answer Sales--
>who sold the most//what product sold the most//sales trend
However they want
FASB - correct answer Financial Accounting Standards Board.
Current Primary rules called Statements of Financial Accounting Standards
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Intermediate Accounting Final

Financial Accounting - correct answer Has an external focus Who uses Financial Accounting? - correct answer Competitors, consumers/customers, stockholders/owners, potential stockholders/investors, IRS/Government What do those using Financial Accounting use? - correct answer Financial Statements:

  1. Income Statement (NI=Rev-Ex)
  2. Retained Earnings Statement (Beg RE+NI-Div Declared=E RE
  3. Balance Sheet (A=L+OE)
  4. Statement of Cash Flow (Operating, Investing, Financing) How do those using financial accounting report to users? - correct answer By following GAAP (Generally Accepted Accounting Princ) Managerial Accounting - correct answer Internal Focus Who uses Managerial Accounting? - correct answer Employees=decision makers What do those using managerial accounting use? - correct answer Specialized reports How do those using managerial accounting report to users? - correct answer Sales-- >who sold the most//what product sold the most//sales trend However they want FASB - correct answer Financial Accounting Standards Board. Current Primary rules called Statements of Financial Accounting Standards

Additional Rules: A. Intepretations B. Technical Bulletins C. Emerging Issues Task Force Statements Seven Members Independent APB - correct answer -Accounting Principles Board -Primary rules called Opinions -Made up primarily of CPAs CAP - correct answer -Committee on Accounting Procedures -Primary rules called Accounting Research Bulletins (ARB's) -Made up exclusively of CPAs AICPA - correct answer -American Institute of Certified Public Accountants -National organization of CPAs SEC - correct answer -Securities and Exchange Commission -Government Agency -Actually has more authority than FASB but willing to allow profession to self- regulate -Has authority over accounting for companies which sells stock on the public stock exchange IRS - correct answer -Internal Revenue Service -Government agency -Has authority over how companies report their taxes GASB - correct answer -Governmental Accounting Standards Board -Sets rules for State and local governments

AAA - correct answer -American Accounting Association -US organization composed primarily of educators -Provides theoretical framework for new rules Objetive of General Purpose Financial Reporting - correct answer to provide information to present and potential investors, creditors and other users which is useful in making financial decisions Qualitative Characteristics of Accounting Information - correct answer -Fundamental qualities -Enhancing qualities Fundamental qualities - correct answer -relevance -faithful representation Relevance - correct answer 1. Predictive value

  1. Confirmatory value
  2. Materiality Predictive value - correct answer Financial information must allow the user to make responsible estimates of what will happen in future a. Comparative statements b. proper categories Confirmatory value - correct answer report information the same way every year so that the users of your financial statements can determine if their predictions came true Materiality - correct answer We may bend the rules on how to report an item when the amount is not significant. (ex:trashcan) Asset worth enought to matter

Faithful representation - correct answer Tells what really happened

  1. Completeness-enough info to make good decisions
  2. Neutrality-financial statements should be free form biased. Do not make your company look better than you are and do not make your company look worse than you are
  3. Free from (big material) error Enhancing qualities - correct answer 1. Comparability
  4. Verifiability
  5. Timeliness
  6. Understnadability Comparability - correct answer 1. External-comparable with other companies. All follow GAAP
  7. Internal-comparable with previous periods of our own company Verifiability - correct answer We must be able to prove every amount on our financial statements (which means if another person used your information, they would arrive at the exact same results) Timeliness - correct answer provide info as quickly as possible without sacrificing accuracy Understandability - correct answer must assume the users of the financial statement have a basic business knowledge Economic Entity Assumptions - correct answer keep financial information about your company separate from information related to the owners of the company going concern assumption - correct answer in the absence of information to the contrary, we believe our company will be in existence long enough to finish everything we have started

Full Disclosure Principle - correct answer Provide enough information for the users of your financial statements to make good decisions about your business Cost-Benefit Constraint - correct answer When deciding how much information to provide to the users of our financial statements, we must weigh the cost of providing more information verses the benefit the users would receive from the additional information Industry Practice Constraint - correct answer Some companies are allowed to use methods which are not GAAP because their industry is different than most. For ex, inventory is normally recorded at cost (based on historical cost) Conservatism Concept - correct answer In areas of uncertainty, always choose the alternative which makes you look the worst today Assets - correct answer probable future economic benefits obtained or controlled by a particular entity as a result of past transactions or events Liabilities - correct answer Probable future sacrifices of enconomic benefits arising from present obligations of a particular entity to transfer assets or provide services to other entities in the future as a result of past transactions or events Equity - correct answer residual interest in the assets of an entity that remains after deducting its liabilities. In a business enterprise, the equity is the owners interest Investments by Owners - correct answer Increases in net assets of a particular enterprise resulting from transfers to it from the entities of something of value to obtain or increase ownership interest (or equity) in it. Assets are most commonly received as an investments by owners, but that which is received may also include services or satisfaction or conversion of liabilities of the enterprise Distributions to Owners - correct answer Decrease in net assets of a particular enterprise resulting from transferring assets, rendering services, or incurring liabilities by the enterprise to owners. Distributions to owners decrease ownership interests (or equity) in an enterprise.

Comprehensive Income - correct answer change in equity (net assets) of an entity during a period from transactions and other events and circumstances from nonowner sources. It includes all changes in equity during a period except those resulting form investments by owners and distributions to owners Revenues - correct answer inflows or other enhancements of assets of an entity or settlement of its liabilities (or a combination of both) during a period from delivering or producing goods, rendering services, or other activities that constitutes the entity's ongoing major or central operations Expnses - correct answer outflows or other using up of assets or incurrence of liabilities (or combination of both) during a period from delivering or producing goods, rendering services, or carrying out other activities that constitute the entity's ongoing major or central operations Gains - correct answer increases in equity (net assets) from peripheral or incidental transactions of an entity and from all other transactions and other events and circumstances affecting the entity during a period except those that reslut from revenues or investments by owners Losses - correct answer decreases in equity (net assets) form peripheral or incidental transactions of an entity and from all other transactions and other events and circumstances affecting the entity during a period except those that result form expenses or distributions to owners Steps in the accounting cycle - correct answer 1. Identify and measure events which have financial impact

  1. Journalize the transaction in chronological order
  2. Post journal entries from the journals to the ledger
  3. Prepare an unadjusted trial balance
  4. Journalize and post adjusting entries (accruals, deferrals, estimates, inventory)
  5. Prepare an adjusted trial balance
  6. Prepare financial statements
  7. Journalize and post closing entries
  8. Prepare a post closing trial balance
  9. Journalize and post reversing entries

Current assets - correct answer assets which will be turned into cash or used up within 1 year or the operating cycle whichever is longer. obligations which will be fulfilled with the use of a current asset or the creation of another current liability (or amount collected for a service which will be aprovided within the next 12 months) The operating cycle is the amount of time it takes to - correct answer 1. sell your product

  1. collect the money from the sale
  2. buy another product
  3. be ready to sell it again investments and funds - correct answer assets your company acquired in order to make extra money Fixed assets - correct answer assets which your company used in the operation of your business intangible assets - correct answer assets which have value because of what they represent rather than because of what they are other assets - correct answer assets which have value but do not fit the description of the first four categories non-current liabilities - correct answer debts which do not meet the description of current liabilities paid in capital - correct answer accounts created when selling the company's stock (and money is "Paid In" by stockholders) accumulated other comprehensive income - correct answer primarily from Unrealized Gains and Unrealized Losses on available for sale securities Retained earnings - correct answer cumulative total of all the company's net income minus all of the company's dividends

subsequent events - correct answer events that occur after the end of the year but before the financial statements are actually issued to the public Auditors report - correct answer 1. Unqualified-no problems

  1. Qualified- "Except for" (all good except for)
  2. Adverse- dont trust
  3. Disclaimer-no opinion because limited in the review What was the Statement of Cash Flows previously called? - correct answer Statement of changes in financial position The statement of cash flows must - correct answer explain the change in the ending balance of every BALANCE SHEET account from last year to this year expanded balance sheet formula - correct answer Cash + All remaining assets= Liabilities + Stockholders Equity Current accounts which do NOT affect the income statement - correct answer 1. Short term notes payable
  4. Short term notes receivable
  5. Cash Dividend Payable
  6. Stock Subscription receivables It is considered a sale if the transaction meets ALL of the following criteria - correct answer 1. Transferred assets are isolated from the transferor (Seller)
  7. The transferee (Buyer) has the right to resell or pledge the transferred assets
  8. The transferor (Seller) does NOT maintain the effective control of the assets through an agreement to repurchase the transferred assets at a later date Items that should be included in the balance sheet for the account called "Cash" or called "Cash and Cash Equivalents" - correct answer Coins Currency (dollar bills)