Test Review Chapter 1

Financial reports that summarize the financial condition and operations of a business are called financial:

• summaries
• outputs
• statements
• records

A business that performs an activity for a fee is called a(n):

• corporation
• service business
• proprietorship
• online business

A business owned by one person is called a:

• corporation
• partnership
• proprietorship
• common-law business

Anything of value that is owned is called a(n):

• expense
• asset
• liability
• possession

The amount remaining after the value of all liabilities is subtracted from the value of all assets is called:

• profit
• loss
• account balance
• owners equity

A business activity that changes assets, liabilities, or owner's equity is called a:

• deposit
• withdrawl
• deal
• transaction

Each part of the accounting equation consists of one or more accounts.

• True
• False

An account balance is a term applied when both sides of the accounting equation are equal, or, in balance.

• True
• False

When a business pays cash for supplies:

• owner's equity increases
• accounts payable increases
• cash increases
• supplies increases

A sale for which cash will be received at a later date is called accounts payable.

• True
• False