ACC I Unit 1

The standards, conventions, and rules that accountants follow to prepare financial reports are known as:

• generally accepted accounting principles

• accounting and audit procedures

• management accounting

• executive accounting

Which term refers to the owner having full responsibility for company debts and obligations?

• limited liability

• stock obligation

• unlimited liability

• taxation obligation

The accounting assumption that a business is expected to survive and operate indefinitely is called a:

• business entity

• capital concern

• charter entity

• going concern

In which type of business ownership structure does each owner in the group risk losing his/her personal property even though responsibilities are shared?

• limited liability company

• sole proprietorship

• partnership

• corporation

Which type of business buys raw materials and transforms them into finished products?

• entrepreneurial

• manufacturing

• merchandising

• service

What is the common term for a retirement savings plan sponsored by employers that will allow workers to save and invest from their paychecks before taxes?

• 401(k) savings plan

• certificate of deposit

• 529 savings plan

• stock fund

What is the term for a financial reporting period of time beginning on January 1 and ending on December 31?

• accounting cycle

• calendar year

• budget year

• audit cycle

In which business ownership structure are business debts the total responsibility of a business so that personal property of the owner is protected from loss?

• corporation

• partnership

• sole proprietorship

• limited liability company

The amount of money earned above the amount of expenses incurred to keep a business in operation is called:

• net loss

• net profit

• equity capital

• going concern

Which type of accounting focuses on reporting information to executives and internal users of information who are involved in making day-to-day operating decisions such as purchasing and hiring?

• computerized

• financial

• management

• manual