Chap 1 - Accounting in Action

Front

What are the three main activities (functions) of accounting?

Back

Identification, Recording, Communication.

Front

Who are the internal users of accounting information?

Back

Finance, Marketing, HR, Management.

Front

What does GAAP stand for?

Back

Generally Accepted Accounting Principles.

Front

What is the Historical Cost Principle?

Back

Record assets at their original cost.

Front

What is the Fair Value Principle?

Back

Assets and liabilities reported at fair value (current market price).

Front

What are the two qualities of useful information in accounting?

Back

Relevance and Faithful representation.

Front

What is the Monetary Unit Assumption?

Back

Only transactions measurable in money are recorded.

Front

What is the Economic Entity Assumption?

Back

A business is a separate entity from its owner(s) or other entities.

Front

What are the three forms of business ownership?

Back

Proprietorship, Partnership, Corporation.

Front

What is the accounting equation?

Back

Assets = Liabilities + Owner’s Equity.