Chapter 1 Test (Part I & II (Accounting 1)

A formal report that shows what an individual owns,

what an individual owes, and the difference between

the two.

• account balance

• net worth statement

• financial statement

• account title

2. Planning, recording, analyzing, and interpreting financial information.

• accounting title

• account

• accounting

• account balance

An equation showing the relationship among assets,

liabilities, and owner’s equity.

• account balance

• account title

• accounting equation

• account balance

A business activity that changes assets, liabilities, or

owner’s equity.

• accounting system

• accounting

• transaction

• accounting equation

A planned process for providing financial information

that will be useful to management

• accounting system

• accounting title

• accounting equation

• accounting balance

6. The standards and rules that accountants follow while recording and reporting financial activities.

• GAAP

• accounting system

• accounting equation

• business ethics

The account used to summarize the owner’s equity in

the business

• creditor

• business ethics

• business plan

• asset

A person or business to whom a liability is owed.

• owners's equity

• debtor

• creditor

• financial statements

An amount owned by a business

• GAAP

• Liability

• Owner's equity

• equity

Financial reports that summarize the financial conditions

and operations of business.

• personal net worth

• financial statements

• net worth statement

• capital account