Business Essentials Unit 4 Quiz

The process of keeping the financial records of a business is known as

• Accounting.

• Controlling.

• Financing.

• Bookkeeping.

The overall purpose of accounting is to

• maintain accurate reports

• control the finances of the business

• compile the business’s expenses.

• keep track of sales.

Why are accurate accounting records important to a business?

• They show how the business is doing.

• They increase the return on investments.

• They give the business an image of success.

• They prevent any financial losses.

Which of the following groups makes regular use of a business’s managerial accounting information:

• Creditors.

• Investors.

• Customers.

• Managers.

A creditor is most likely to examine a business’s financial accounting records if the business is

• applying for a bank loan.

• complying with regulations.

• using cash accounting.

• selecting a new market.

Riley is an employee of the federal government who studies the financial reports of major businesses in a specific industry. The government’s purpose in assigning this task to Riley is to

• search for profitable investments.

• identify trends in the industry.

• determine creditworthiness.

• decide if funds are available for pay raises.

For an accounting system to be useful to the business, the accounting information it contains must be

• accurate and up to date.

• posted by an accountant.

• approved by the chief executive officer.

• recorded using the accrual method.

Which of the following is a requirement for a good accounting system:

• It should eliminate the need for an accountant.

• It should be replaced every two or three years.

• It should provide needed information quickly.

• It should be updated annually.

Overall, what does marketing allow us to do?

• Live our daily lives

• Stop buying online

• Feel better about shopping

• Limit our spending

Checks, receipts, invoices, and purchase orders are examples of

• accounting standards.

• source documents.

• financial statements.

• department ledgers.