Review in Basic Accounting

What is the main objective of accounting?

• To create profit for a company

• To regulate government transactions

• To advertise a business or an establishment

• To identify, record, and communicate economic events

What part of the accounting process involves choosing relevant economic events?

• Identifying

• Communicating

• Reporting

• Recording

Who is recognized as the Father of Accounting?

• Luca Pacioli

• Adam Smith

• Isaac Newton

• Albert Einstein

The earliest evidence of accounting practices was discovered in which ancient civilization?

• Greece

• Egypt

• Rome

• Mesopotamia

What material was used in keeping accounting records during ancient times?

• Metal Plates

• Clay Tablets

• Paper Scrolls

• Wood Planks

What does GAAP stand for?

• General Accounting and Auditing Principles

• Generally Accepted Accounting Practices

• Generally Accepted Accounting Principles

• Global Accounting and Auditing Policies

It assumes that accounting only records business transactions and events that can be expressed in terms of money.

• Materiality Principle

• Time Period Assumption

• Monetary Unit Assumption

• Revenue Recognition Principle

It states that if there are two options to choose from the valuation of a business transaction, the lower amount should be recorded and not the higher amount.

• Accrual Principle

• Matching Principle

• Objectivity Principle

• Materiality Principle

It assumes the business entity is going to continue existing and operating in the indefinite future.

• Time Period Assumption

• Monetary Unit Assumption

• Economic Entity Assumption

• Going Concern Assumption

It assumes that the business entity is separate from its owners.

• Monetary Unit Assumption

• Time Period Assumption

• Economic Entity Assumption

• Revenue Recognition Principle