BE 4.01--Acctg/Fin

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

• accounting

• controlling

• financing

• bookkeeping

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

• using cash accounting

• selecting a new market

• applying for a bank loan

• complying with regulations

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

• approved by the chief executive officer

• posted by an accountant

• recorded using the accrual method

• accurate and up to date

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 need for an accountant

• it should be replaced every two or three years

Checks, receipts, invoices and purchase orders are examples of:

• financial statements

• department ledgers

• source documents

• accounting standards

What type of accounting method would most likely be used by a small business owner who does not offer credit?

• check method

• accrual method

• COD method

• cash method

Which of the following makes comparisons of the financial conditions of multiple organizations possible?

• Source document

• Accounting standards

• Bookkeeping

• Trial balance

Which of the following categories of information are found on the income statement?

• revenue and expenses

• assets, liabilities and owners equity

• assets and revenue

• Liabilities, expenses and owners equity

Which accounting record would summarize a business's profit or loss for the previous accounting period?

• Cash Flow Statement

• General Ledger

• Balance Sheet

• Income Statement

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

• Bank statement

• Balance sheet

• Income statement