U1 Accounting 1 Vocabulary Test

Which term refers to something that you own?

• Asset

• Liability

• Expense

• Income

What is a record or statement of financial expenditures and receipts for a specific period or purpose?

• Asset

• Account

• Expense

• Income

What is the sum of all sources of income or money coming in?

• Income

• Equity

• Revenue

• Expense

In accounting, what is the difference between assets and liabilities?

• Income

• Equity

• Revenue

• Expense

What term represents the money that is used to run or build a business, which can be invested by owners or cumulative profits?

• Capital

• Revenue

• Asset

• Expense

Which area of accounting focuses on reporting information to external users?

• Financial Accounting

• Managerial Accounting

• Tax Accounting

• Internal Auditing

What is the evaluation of statements to ensure that they are fair and legal?

• Accounting

• Audit

• Asset

• Liability

What does GAAP stand for?

• General Accounting and Auditing Principles

• Generally Accepted Accounting Principles

• Global Accounting and Auditing Policies

• Governmental Accounting and Auditing Procedures

Which term refers to a computerized system that holds all accounting information?

• Manual Accounting System

• CPA

• Computerized Accounting

• GAAP

What is the normal balance of an account?

• The side on which the account increases

• The side on which the account decreases

• The total balance of all accounts

• The average balance over a period