PRINCIPLES OF ACCOUNTING - EXAM 1 STUDY GUIDE

The objective of _________________ is to provide timely and relevant information for users to make decisions.

• engineering

• marketing

• accounting

• medicine

The main goal of accounting is to ___________ _______________.

• provide information

• calculate taxes

• manage employees

• increase sales

The amount received for goods and services is called _______________.

• asset

• expense

• liability

• revenue

The amount paid to produce goods and services is called _______________.

• income

• expense

• profit

• revenue

Profit is calculated as: _______________ – _______________ = Profit

• revenue – expense

• expense – revenue

• assets – liabilities

• income – tax

"Profit" is also called "_______ ____________" in accounting terms.

• operating expenses

• gross sales

• net income

• cash flow

When revenues exceed expenses, this is called ______ __________.

• net liability

• gross loss

• operating expense

• net income

When expenses exceed revenues, this is called _______ _________.

• gross profit

• net loss

• net income

• operating revenue

____________ businesses (provide services rather than products)

• Manufacturing

• Service

• Retail

• Agricultural

____________ businesses (sell products from other businesses)

• Merchandising

• Manufacturing

• Service

• Consulting