Chapter 14 Review

The financial statement that explains how a firm's cash changed from the beginning of the accounting period to the end is called the

• statement of cash flows

• balance sheet

• income statement

• profit-loss statement

A pet store is trying to determine its net income. To figure out this value, the company should equate the total profit or loss minus

• equity

• sales

• expenses, including taxes

• income and profits

Derek, an accountant, allocates the cost of a piece of earth-moving equipment over a specific period of time. Based on the given information, it can be concluded that Derek is implementing the process of

• cost plus pricing

• appreciation

• discounting

• depreciation

All asset accounts are listed in order of

• investments

• inventory

• liquidity

• revenue

_____ includes the owners' contributions to a company along with income earned by the company and retained to finance continued growth and product development.

• Owners' equity

• Income statement

• Shareholder equity

• Gross Income

_____________________are its economic resources, or items of value that it owns. These items can  include cash, inventory, land, equipment, buildings, and other tangible and intangible things.

• Assets

• Liabilities

• Owner's Equity

• Inventory

Sean got a loan from the Small Business Administration to start his own landscaping and hardgoods business. For Sean, this loan is

• an asset

• a liability

• a transaction

• an expense

When Cathy opened her store, she convinced her family and friends to invest in the store. They invested money and assets to help her start and grow her business. The money and assets these investors contributed to Cathy's store comprise her

• assets

• liabilities

• owner's equity

• stock

An accounting term that is interchangeable with revenue is

• sales

• services

• expenses

• net income

Which of the following is NOT a step in the accounting process? 

• record transactions

• examine source documents

• post transactions

• generate annual reports