Business Essentials - 4.01

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

• Financing

• Controlling

• Accounting

• Bookkeeping

Why are accurate accounting records important to a business?

• They show how the business is doing.

• They increase the return on investments

• They prevent any financial losses

• They give the business an image of success.

A creditor is most likely to examine a business's financial accounting records if the business is

• complying with regulatios

• applying for a bank loan

• using cash accounting

• selecting a new market

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

• accurate and up to date

• approved by the CEO

Which of the following is a requirement for a good accounting system:

• It should be updated annually

• It should provide needed information quickly

• It should eliminate the end for an accountant

• It should be replaced every two or three years

Which of the following is a true statement:

• Bookkeeping is the same as accounting

• Bookkeeping is limited to information on sales

• Bookkeeping does not use computers

• Bookkeeping records business transactions

Which of the following presents the first three steps in the accounting cycle in the correct order:

• Post, journalize, and analyze

• Analyze, journalize, and post

• Post, analyze, and jouranlize

• Analyze, post, and journalize

Which of the following financial reports provides estimates of when, where, and how much money will come into and out of a business next year:

• Cash flow statement

• Income statement

• Balance sheet

• Bank statement

Finance is the business function that involves managing

• Money

• marketing

• information

• production

The goals of the finance function are to ensure profitability and

• advertise products

• reduce risks

• manufacture raw materials

• gives out information