Basic Accounting Test 1: Questions with Correct Answers for 2024/2025

1. Accounting system - Ans .The personnel, procedures, devises, and records used by an organization to develop accounting information and communicate it to the decision makers. 2. Balance Sheet - Ans .Shows the financial position as of a particular date. (quarter of year) Reports assets, Liabilities, and owners' equity 3. Business entity - Ans .The business is assumed to have an existence separate from its owners, creditors, employees, and other parties. 4. Certified Public Accountant (CPA) - Ans .An accountant licensed by the state after meeting certain requirements. 5. Cost - Ans .purchase price of asset 6. External users - Ans .individuals and other enterprises that have a financial interest in the enterprises, but isn't involved in the day-to-day operations. 7. Financial accounting - Ans .Providing information about the financial resources, obligations, and activities of an economic entity used by external decision makers. 8. Financial statement - Ans .A monetary declaration of what is believed to be true about an enterprise. 9. Generally Accepted Accounting Principles - Ans .Principles that provide the framework for determining what information is to be included in financial statements and how the information is to be presented. 10. Going concern - Ans .The company's ability to make enough money to avoid bankruptcy. 11. Income Statement - Ans .An activity statement that shows details and results of the company's profit-related activities for a period of time. 12. Internal Revenue Service - Ans .A government organization that handles millions of income tax returns filed by individuals and businesses and preforms audit functions to verify the data contained in those returns. 13. Internal Users - Ans .People who use accounting information from within an organization. 14. Management Accounting - Ans .Providing information that is intended primarily for use by internal management in decision making required to run the business. 15. Periodicity - Ans .An entity's life can be subdivided into time periods for purposes of reporting its economic activity. 16. Private company - Ans .Corporation, partnership, sole proprietorship, legally required to file certain state documents. Not required to publically disclose financial information. 17. Profitability - Ans .The ability to generate income 18. Public company - Ans .Public business is a stock that can be listed on the NYSE, NASDAQ, ETC. The stock can be purchased by strangers, advantages for raising large amounts of capital. They are legally required to file reports with federal agencies, and ca go private by buying back their stock. 19. Quick access toolbar - Ans .Set of commands that are speci