Accounting Checkpoint #1 (Chapter 1 and 2)

Which of the following is a sale for which payment can be received later?

• Sale on account

• Prepaid Insurance

• Accounting

• CFO

Which of the following is the cost of goods or services to operate a business?

• Business Assets

• Business Account

• Business Expense

• Business Entrepreneurship

Purchasing supplies with cash does not decrease your net worth.

• True

• False

What is it called when the owner of the business takes cash from the business for his or her own personal use?

• Paying Bills

• Withdrawal

• Investment

• Accounts Payable

What is called when a person owns his or her own business?

• Corporation

• Partnership

• Proprietorship

• Franchise

Which of the following is a formal written document that describes the nature of a business and how it will operate?

• Business Venture

• Business Idea

• Business World

• Business Plan

True or False: An amount paid for the use of money for a period of time is called interest.

• True

• False

The standards and rules that accountants follow while recording and reporting financial activities are called what?

• GAAP

• GAP

• OD

• NWHS

The financial rights to a businesses assets is called_____________.

• Equity

• Liability

• Account Title

• Cash on Account

What happens when you buy supplies with cash?

• Net worth or equity stays the same

• total assets stay the same

• liabilities increase

• the supply account decreases