Accounting Benchmark 1

A formal report that shows what an individual owns, what an individual owes, and the difference between the two is called:

• Personal Net Worth

• Net Worth Statement

• Owner’s Equity

• Financial Statement

The process of planning, recording, analyzing, and interpreting financial information is known as:

• Accounting

• GAAP

• Business Ethics

• Financial Reporting

The equation that shows the relationship among assets, liabilities, and owner’s equity is called:

• Accounting Equation

• Financial Equation

• Equity Equation

• Asset-Liability Equation

A business activity that changes assets, liabilities, or owner’s equity is known as a(n):

• Accounting System

• Business Transaction

• Expense

• Liability

A planned process for providing financial information that will be useful to management is called a(n):

• Business Plan

• Accounting System

• Financial Statement

• GAAP

The standards and rules that accountants follow while recording and reporting financial activities are referred to as:

• Ethics

• Business Ethics

• GAAP (Generally Accepted Accounting Principles)

• Accounting System

The account used to summarize the owner’s equity in the business is called:

• Capital Account

• Equity Account

• Liability Account

• Asset Account

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

• Net Income

• Owner’s Equity

• Net Worth

• Capital

A record summarizing all the information pertaining to a single item in the accounting equation is called a(n):

• Financial Statement

• Business Transaction

• Account

• Ledger

The difference between personal assets and personal liabilities is referred to as:

• Net Income

• Personal Net Worth

• Equity

• Capital