POB OBJ 6.01 MC

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

• accounting.

• controlling.

• financing.

• bookkeeping.

The overall purpose of accounting is to

• control the finances of the business.

• keep track of sales.

• compile the business’s expenses.

• maintain accurate reports.

Why are accurate accounting records important to a business?

• They prevent any financial losses.

• They show how the business 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

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

• recorded using the accrual method.

• posted by an accountant.

• approved by the chief executive officer.

• accurate and up to date.

What is one of the main reasons why businesses need to keep accurate accounting records?

• to control expenses

• to eliminate risks

• to regulate taxes

• to follow procedures

Businesses use the information collected through the accounting process to prepare accurate:

• balance sheets.

• purchase orders.

• inventory forms.

• promissory notes.

Businesses would not be able to determine if they are meeting their financial goals without accurate:

• production plans.

• accounting systems.

• marketing plans.

• distribution systems.