Accounting 1 & 2 Chapter 1 Quiz

What is the process of planning, recording, analyzing, and interpreting financial information called?

• Financial Reporting

• Accounting

• Auditing

• Budgeting

Which of the following best describes an accounting system?

• A method to track employee performance

• A planned process to compile and summarize financial data

• A system for managing customer relationships

• A tool for marketing analysis

What are financial statements?

• Reports that detail the marketing strategies of a business

• Documents that summarize the financial condition and operations of a business

• Records of employee attendance

• Plans for future business growth

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

• Balance Sheet

• Income Statement

• Net Worth Statement

• Cash Flow Statement

Which of the following is defined as anything of value that is owned?

• Liability

• Asset

• Equity

• Revenue

What is the term for an amount owed?

• Asset

• Liability

• Equity

• Expense

How is personal net worth calculated?

• Total income minus total expenses

• Total assets minus total liabilities

• Total liabilities minus total assets

• Total revenue minus total costs

What is the difference between assets and liabilities known as?

• Revenue

• Equity

• Profit

• Expense

Which of the following refers to the principles of right and wrong that guide an individual in making decisions?

• Business Ethics

• Morality

• Ethics

• Law

What is a business owned by one person called?

• Corporation

• Partnership

• Sole Proprietorship

• Franchise