An overview of Accounting 1.1.2

What is the simplest definition of accounting?

• ​The recording of financial transactions

• Following generally accepted principles

• Presenting information in reports

• Managing all of a company's finances

In the basic accounting equation, _____ equals liabilities plus shareholder equity.

• value​

• ​assets

• debt

• balance

The primary purpose of accounting is to _____.

• stop fraud and neglect

• generate company profits

• keep financial records

• report financial information

When a nation's standards of financial reporting are transparent and effective:

• the country's laws ca be more easily violated

• businesses in the country tend to lose profits and resources

• businesses are unable to foster good relationships with customers

• citizens tend to have greater confidence in the economy

Which of the following is an internal function of a business's accounting department?

• administering employee payroll

• coordinating accounts receivable

• coordinating accounts payable

• managing credit and collections accounts

Which form shows a business’s financial performance over a reporting period?

• statement of changes in equity

• balance sheet

• income statement

• statement of cash flows

Which of the following is a function of accounts receivable?

• ​Locating discounts and incentives

• ​Communicating with investors and banks

• ​Monitoring outstanding invoices

• Paying vendors for services rendered

A very large company would be most likely to have a(n) _____ at the head of its accounting department.

• executive vice president

• accounting manager

• ​controller

• ​chief financial officer

An accounting manager's duties include which of the following?

• Reporting results of financial statements to the other managers and advising accordingly

• Reviewing past financial statements to develop a view of past financial performance​

• ​Making decisions that set the direction of the company's strategies for financial performance​

• Processing and recording cash payments outside of the organization

In a small company's accounting department, the accounts receivable coordinator often takes the role of the _____.

• ​payroll administrator

• ​credit and collection manager

• ​bookkeeper

• accounting manager