Ch 1 Accounting Review

Front

Which of the following best describes accounting?
Options:
The process of buying and selling products
The process of recording and reporting financial information
Creating marketing strategies
Investing in stocks

Back

The process of recording and reporting financial information

Front

Who is responsible for setting Generally Accepted Accounting Principles (GAAP)?

Back

Financial Accounting Standards Board (FASB)

Front

Which of these describes a sole proprietorship? A business Owned by stockholders, A business Owned by one person, A business Owned and controlled by two or more people, A business Owned by the government

Back

A business Owned by one person

Front

What is an asset?

Back

Something a business owns that provides future benefit

Front

Which of the following is a liability? Furniture, Cash, Accounts Receivable, Loan Payable

Back

Loan Payable

Front

How is owners equity defined?

Back

The amount by which assets exceed liabilities, also called net worth or capital.

Front

What is the correct form of the accounting equation?

Back

Assets = Liabilities + Owners Equity

Front

What is a business transaction?

Back

Any business activity that changes assets, liabilities, or owners equity

Front

What is an expense?

Back

Cost of goods or services used to operate a business

Front

What are withdrawals (drawing) in accounting?

Back

Assets taken from the business for owners’ personal use