5-2 Glossary Review Questions

What is “Accounting”?

• A system of recording financial transactions

• A type of financial report

• A method of budgeting

• A form of investment

Finance is the management of _______.

• money and investments

• sports and recreation

• health and wellness

• technology and innovation

The "General Ledger", or the GL, is:

• a record of all financial transactions within a company.

• a list of all employees in a company.

• a summary of all customer feedback.

• a collection of all company policies.

What are the primary accounts in a GL?

• Assets, Liabilities, Equity, Revenue, Expenses

• Cash, Accounts Receivable, Inventory, Equipment

• Sales, Cost of Goods Sold, Gross Profit, Net Income

• Accounts Payable, Notes Payable, Accrued Liabilities

What are examples of sub-accounts of the Assets GL account?

• Cash

• Accounts Receivable

• Inventory

• All of the above

What are examples of sub-accounts of the Liabilities GL account?

• Accounts Payable, Accrued Liabilities, and Notes Payable

• Cash, Accounts Receivable, and Inventory

• Sales Revenue, Service Revenue, and Interest Income

• Common Stock, Retained Earnings, and Dividends

Sub-accounts under liabilities include:

• Accounts Payable

• Inventory

• Cash

• Revenue

The "double-entry accounting system" is:

• a method of bookkeeping where each entry to an account requires a corresponding and opposite entry to a different account

• a single-entry system where transactions are recorded once

• a system that only tracks income and expenses

• a method used exclusively for tax purposes

What is the "accounting equation"?

• Assets = Liabilities + Equity

• Assets = Liabilities - Equity

• Assets = Equity - Liabilities

• Assets = Liabilities * Equity

What is a “T-Account”?

• A visual representation of a general ledger account using two columns to display debits and credits.

• A type of bank account used for transactions.

• A method of calculating interest rates.

• A software tool for accounting.