Accounting- Unit 1 Test

___________ is the process of organizing, analyzing and communicating financial information that is used for decision-making.

Accounting is important for all of the following reasons: (more than 1 answer)

• Guides decision making

• Keeps things organized

• Important only to external users

• Keeps you out of trouble with the law

Preparing external financial statement in compliance with GAAP has to be done in which of the following types of accounting?

• Financial

• Managerial

GAAP can be defined as common set of rules, standards, and procedures that publicly traded companies must follow when composing their financial statements. What does GAAP stand for?

• Generally approved accounting principles

• Generally accepted accounting principles

• Generally approved accountant principles

A CPA is a trusted financial advisor who helps individuals, businesses, and other organizations plan and reach their financial goals. What does CPA stand for?

• Certified Private Accountant

• Certified Public Accountant

• Certified Personal Accountant

Profit can be defined as:

• When inflows of cash or other resources are greater than the outflows are resources

• When inflows of cash or other resources are less than the outflows are resources

Refers to the direct costs associated with producing the goods or services that a company sells.

• Revenue

• Expenses

• Costs of Goods Sold (COGS)

Represents the money spent on goods, services, or resources that are necessary to operate a business.

• Revenue

• Expenses

• Costs of Goods Sold (COGS)

Total income generated by a business, typically from the sale of goods and/or services.

• Revenue

• Expenses

• Costs of Goods Sold (COGS)

All of the following are examples of noncurrent assets except

• Cash

• Buildings

• Land

• Machinery