ACCT - Chapter 1

__________ is the planning, recording, analyzing, and interpreting financial information.

• Finance

• Accounting

• Business

• Entrepreneurship

A mathematical equation showing the relationship among assets, liabilities, and owner's equity:

• Break-even point

• Quadratic

• Pi

• Accounting equation

The formula Assets = Liabilities + Owner's Equity is known as the:

• Break-even point

• Accounting equation

• Pi

• Quadratic

Something that has value, meaning it can be used to acquire other assets or used in the operation of the business.

• Liabilities

• Assets

• Expenses

• Owner's Equity

The owner's stake in the business; this is the amount remaining after the value of all liabilities is subtracted from the value of all assets.

• Liability

• Asset

• Expense

• Owner's Equity

An amount owed by a business:

• Liability

• Asset

• Withdrawal

• Owner's Equity

The accounting equation must always remain in balance.

• True

• False

GAAP stands for:

• Generally Accepted Accounting Problems

• Generally Accepted Accounting Programs

• Generally Accepted Accounting Practices

• Globally Accepted Accounting Practices

To ensure that financial statements are consistent across companies, accountants must follow GAAP.

• True

• False

When cash is paid for expenses, owner's equity increases.

• True

• False