Accounting Test Review- Mack

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What is GAAP?

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Generally Accepted Accounting Principles

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Accounting is...

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Accounting is the process of recording, analyzing, and reporting a company's financial transactions.

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What is a Business Entity?

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An organization created by one or more individuals to conduct business, trade, or engage in similar activities.

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Going Concern

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An accounting term for a company that has the resources to continue making enough money to stay afloat in foreseeable future.

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What is an Accounting Period?

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A time span that covers certain accounting functions can either be a calendar or fiscal year.

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What is Revenue Recognition?

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Its revenue that is recognized when the product is delivered or when the services has been performed.

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The business entity concept is an accounting principle that separates a business from its owners and other organizations. For example, Mr. Mack is the owner of Safer Ride LLC, but there is a separation between he and his business. True or False?

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True

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BUSINESS STRUCTURES: How a business structures is departments. CEO, Upper Management, Management, Team Lead, Employee

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The Legal Framework of a company that defines how it operates. LLC, Sole Proprietorship, Partnership, Corporation

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What are the three primary types of business?

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Service, Merchandising, Manufacturing

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What is the Accounting Equation?

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Assets = Liabilities + Owner Equity