Midterm Exam Review (Business concepts) S2

What is accounting often called?

• The language of business

• The science of business

• The history of business

• The analysis of business

What is the primary purpose of accounting?

• To prepare invoices

• To provide financial information for decision-making

• To manage human resources

• To control production processes

What is a key function of an accounting system?

• Marketing products

• Summarizing financial transactions

• Increasing sales

• Negotiating supplier contracts

Which financial statement shows the financial position of a company at one point in time?

• Income statement

• Balance sheet

• Statement of cash flows

• Statement of retained earnings

What does the income statement reflect?

• The financial performance over a period of time

• The company's cash position

• The inventory level at year-end

• The company's liabilities

Which group of professionals uses accounting information for auditing and tax computations?

• Private accountants

• Public accountants

• Internal auditors

• Managers

Who may earn the title of CPA (Certified Public Accountant)?

• Government accountants

• Public accountants

• Private accountants

• Financial analysts

How do private accountants typically work?

• Independently as contractors

• For private companies

• For the government

• As freelance consultants

How are government accountants typically compensated?

• Hourly wage

• Fixed commission

• Salary basis

• Per project fee

What is the outcome of an effective accounting system?

• Higher sales

• Accurate and timely financial information

• Increased taxes

• Reduced production costs