ACC 101 Vocabulary

What is the purpose of accounting?

• To provide financial statements to the decision makers

• To provide good revenue to the decision makers

• To provide information to the decision makers

• To provide liability to the decision makers

What is the accounting equation?

• Assets = Liabilities + Owners Equity

• Liabilities = Assets + Owners Equity

• Owners Equity = Assets + Liabilities

An Asset has which characteristics? Select all that apply.

• Future economic benefit

• Past economic benefit

• Controlled by the entity

• Arise from a past transaction

Business Entity Concept means:

• Transactions associated with a business are an outflow of economic resources

• Transactions associated with a business can be recorded together with those of its owners

• Transactions associated with a business are outstanding or unpaid

• Transactions associated with a business must be separately recorded from those of its owners

GAAP stands for:

• Generally Associated Accounting Principles

• Generally Accepted Accounting Principles

• Generally Accepted Accounting Practices

• Generally Associated Accounting Practices

Historical Cost Concept refers to:

• An asset recorded at what it was paid

• An liability to the business

• Revenue to the business

• An expense

Liability includes the following characteristics: (Select all that apply.)

• Future economic benefit

• Future economic harm/disadvantage

• Arise from a past transaction or event

• Responsibility of the entity

What are some other names for Financial Statements? (Select all that apply.)

• Income Statement

• Statement of Owners Equity

• Balance Sheet

• Statement of Cash Flow

What is the correct equation to determine Net Income?

• 
• 
• 
• 
• 

What is Owner Equity?

• Outflow of economic resources

• Transactions associated with the business

• The owners claim upon the business

• The owners right to make all business decisions