General Business - Accounting

The process of keeping the financial records of a business is known as

• accounting
• controlling
• financing
• bookkeeping

The overall purpose of accounting is to

• maintain accurate reports. 
• compile the business’s expenses. 
• keep track of sales. 
• control the finances of the business.

Why are accurate accounting records important to a business?

• They prevent any financial losses. 
• They show the business how it is doing. 
• They increase the return on investments.
• They give the business an image of success.

Which of the following groups makes regular use of a business’s managerial accounting information:

• Managers
• Customers 
• Creditors
• Investors

A creditor is most likely to examine a business’s financial accounting records if the business is

• applying for a bank loan.
• selecting a new market.
• using cash accounting.
• complying with regulations.

Riley is federal government employee who studies financial reports of major businesses in a specific industry. The government’s purpose is

• verify compliance with laws. 
• calculate the businesses’ income taxes. 
• analyze employment statistics. 
• identify trends in the industry.

For an accounting system to be useful to the business, the accounting information it contains must be

• accurate and up to date. 
• approved by the chief executive officer.       
• posted by an accountant.
• recorded using the accrual method.

Which of the following is a requirement for a good accounting system:

• It should be updated annually.
• It should provide needed information quickly.
• It should eliminate the need for an accountant.
• It should be replaced every two or three years.

Two employees used a bus. acct. system to change records. They stole $50,000 because the system lacked:

• Protection from theft and fraud 
• An affordable price 
• A manual system as backup
• Printed financial statements 

Checks, receipts, invoices, and purchase orders are examples of 

• financial statements.
• department ledgers.
• source documents.
• accounting standards.