Chapter 1

Accounting is an information and measurement system that:

• Identifies business activities.

• Records business activities.

• Communicates business activities.

• Helps people make better decisions.

• All of these.

Another name for equity is:

• Net income.

• Expenses.

• Net assets.

• Revenue.

• Net loss.

The description of the relation between a company's assets, liabilities, and equity, which is expressed as Assets = Liabilities + Equity, is known as the:

• Income statement equation

• Accounting equation.

• Business equation.

• Return on equity ratio.

• Net income.

A partnership (quan hệ đối tác):

• Is also called a sole proprietorship (Quyền sở hữu duy nhất)

• Has unlimited liability (Có trách nhiệm vô hạn)

• Has to have a written agreement in order to be legal (Phải có 1 thỏa thuận bằng văn bản để hợp pháp)

• Is a legal organization separate from its owners (Là tổ chức hợp pháp tách biệt với chủ sở hữu)

• Has owners called shareholders (Có chủ sở hữu đc gọi là cổ đông)

Ethics (Đạo Đức):

• Are beliefs that separate right from wrong.

• And law often coincide.

• Help to prevent conflicts of interest.

• Are critical in accounting.

• All of these.

Social responsibility:

• Is a concern for the impact of our actions on society.

• Is a code that helps in dealing with confidential information

• Is required by the SEC.

• Requires that all businesses conduct social audits.

External users of accounting information include:

• Shareholders.

• Customers.

• Creditors.

• Government regulators.

• All of these.

The operating functions of a business include

• Research and development.

• Purchasing.

• Marketing.

• Distribution.

• All of these.

The area of accounting aimed at serving the decision making needs of internal users is:

• Financial accounting.

• Managerial accounting.

• External auditing.

• SEC reporting.

• Bookkeeping.