ANSWER KEY

Who Wants to Be an Accountant?

ACCRUAL BASIS: Money or property put into the custody of a third party
C for delivery to a grantee, only after fulfillment of
Method of accounting that recognizes revenue and specified conditions
A expenses when they are earned, rather than when
collected
FORECAST:
Method of accounting that recognizes recurring revenue
B and expenses for the year as one cumulative transaction Prospective financial statements that are an entity's
within the first quarter A expected financial position, results of operations,
and cash flows
Method of accounting in which all bills and debts are paid
C
on the same day every month A common accounting practice in which all expenses are
B paid before they are actually incurred based on the
average amount spent over the previous three months
LIABILITY:
Period of time between the acquisition of goods and
Having money or goods that belong to another entity in
C services and the payment for them
A
one’s possession

Debts or obligations owed by one entity (debtor) to VARIANCE:

B
another entity (creditor) payable in money, goods,
or services Deviation or difference between an estimated value
A and the actual value
Funds that a borrower must keep on deposit as required by
C
a bank A certified public accountant holding two or more
B
designations

DISBURSEMENT: The difference between the full amount of a debt and

C the portion that has already been paid
Spreading the workload of a single project equally across
A all staff members
PROXY:
B Payment by cash or check
Document authorizing someone other than the
The practice of distributing excess profits to employees as A shareholder to exercise the right to vote the stock
C a yearly bonus owned by the shareholder

B A person who has been charged with money laundering

ESCROW:
A collection of financial ledgers covering an entire
A private retirement savings account offered to a large
C fiscal year
A
group of individuals through their employer

A type of account used by not-for-profit organizations for

B
certain operational expenses, such as rent and utilities

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ANSWER KEY

ANNUITY: TRUST:

A lump sum of money given to an entity in exchange Ancient legal practice where one person transfers
A for goods or services A the legal title to an asset to another person, with
specific instructions about how it is to be managed
A common auditing practice in which inventory is counted and disposed
B at the same time every year
The modern day practice of placing legal tender into an
Series of payments, usually payable at specified time
B offshore account as a means of avoiding paying taxes on it
C intervals
One party entrusting another party to legally handle all
C financial affairs on their behalf
CASUALTY LOSS:

Sudden property loss caused by theft, accident, MANAGEMENT (MANAGERIAL) ACCOUNTING:

A or natural causes
The recording and reporting of financial transactions
A
Sudden loss of financial records as a result of computer made by management-level employees
B
hacking
Training that many mid-level accountants are required to
Sudden loss of employees due to poor management
B take before they can be promoted to a position where they
C
decisions are managing other accountants

Reporting designed to assist management in

C decision-making, planning and control
LIQUIDATION:

The recording and reporting of financial transactions

A solely for the benefit of shareholders GAAP:

Winding up an activity by distributing its assets to A Generally accepted accounting principles

B
the appropriate parties and settling its debts
B General accounting acumen practice
The inspection of a business or other organization’s
C
accounting records and procedures C Global accounting asset performance

SPREAD: INSOLVENT:

The practice of transferring money across various business A A collection of assets that cannot be accounted for
A accounts for tax purposes
B When an entity's liabilities exceed its assets
Financial plan that serves as an estimate of future cost,
B
revenues or both C Lack of fiscal proof of wrongdoing within a fraud case

Difference between two prices, usually a buying and

C
selling price VALUATION:

The determination of the annual earning potential of

A individual CPAs within a medium- or large-sized firm,
typically used for making financial projections

Process of determining the worth of a company’s

B assets

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ANSWER KEY

An exam that all accountants must pass in order to receive

C a CPA license

OPTION:

A choice every entity is given as to whether or not they

A should be publicly or privately held

Business combination of two or more entities that occurs

B when the entities transfer all of their net assets to a new
entity created for that purpose

Right to buy or sell something at a specified price

C
during a specified time period

PRO RATA:

A decision made by an entity to hire an outside accounting

A firm to evaluate the accuracy of its internal accounting
practices

Distribution of an expense, fund or dividend propor-

B tionate with ownership

Party that gifts money or other assets to another party

C
without requiring anything in return