What are the 3 functions of an accounting system? correct answers 1. Analysis - analyze transactions
2. Bookkeeping - handle routine bookkeeping tasks
3. Evaluation - structure information so it can be used to evaluate the performance and health of the business
What is the definition of Accoun...
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What are the 3 functions of an accounting system? correct answers 1. Analysis - analyze
transactions
2. Bookkeeping - handle routine bookkeeping tasks
3. Evaluation - structure information so it can be used to evaluate the performance and health of
the business
What is the definition of Accounting? correct answers Quantitive, financial, useful, decisions.
a system for providing "quantitative information, primarily financial in nature, about economic
entities that is intended to be useful in making economic decisions."
What is the decision-making process? correct answers Step 1: Identify the issue.
Step 2: Gather information.
Step 3: Identify alternatives.
Step 4: Select the option that will most likely result in the desired objective.
What is the definition of Capital? correct answers Financing; the money used by a business to get
the resources it needs.
What is the definition of Financing? correct answers Capital; the money used by a business to get
the resources it needs.
What is the definition of Revenue? correct answers The amount of assets created through the sale
of goods and services.
What is the definition of Management Accounting? correct answers The area of accounting
concerned with providing internal financial reports to assist management in making decisions.
What is the definition of Annual Report? correct answers A document that summarizes the
results of operations and financial status of a company for the past year and outlines future plans.
What is the definition of Financial Statements? correct answers Reports such as the balance
sheet, income statement, and statement of cash flows, which summarize the financial status and
results of operations of a business entity.
What is the definition of Financial Accounting? correct answers The area of accounting
concerned with reporting financial information to interested external parties.
What does the Balance Sheet report? correct answers Statement of financial position that reports
the resources of a company (the assets), the company's obligations (the liabilities), and the
owners' equity, which represents the difference between what is owned (assets) and what is owed
(liabilities).
What does the Income Statement report? correct answers Statement of earnings reports the
amount of net income earned by a company during a period.
, What does the Statement of Cash Flows report? correct answers Reports the amount of cash
collected and paid out by a company in the following three types of activities: operating,
investing, and financing.
What is the definition of Assets? correct answers Economic resources that are owned or
controlled by a company.
What is the definition of Liabilities? correct answers Obligations to pay cash, transfer other
assets, or provide services to someone else.
What is the definition of Owners' Equity? correct answers The remaining claim against the assets
of a business after the liabilities have been deducted.
What is the definition of Net Income? correct answers A line on the income statement that
reports a company's operating income minus interest expense and taxes.
Who are Lenders? correct answers Creditors; banks.
Who are Investors? correct answers Individuals investing in a company. Depending on the size,
through individual investments or stocks.
What is the IRS? correct answers Internal Revenue Service; A government agency that
prescribes the rules and regulations that govern the collection of tax revenues in the United
States.
What is the FASB? correct answers Financial Accounting Standards Board; The organization
responsible for studying accounting issues and establishing accounting standards to govern
financial reporting in the United States.
What are GAAP? correct answers Generally Accepted Accounting Principles; Authoritative
guidelines that define accounting practice at a particular time in the United States.
Set by FASB.
What is the GASB? correct answers Governmental Accounting Standards Board; An
independent private organization that sets the accounting and financial reporting standards for
state and local governments following GAAP.
What is the SEC? correct answers Securities and Exchange Commission; The government body
responsible for regulating the financial reporting practices of most publicly owned corporations
in connection with the buying and selling of stocks and bonds.
What is a CPA (individual)? correct answers Certified Public Accountant; An accountant who
has met specified professional requirements established by the AICPA and local and state
societies. A key service provided by CPAs is the performance of independent audits of financial
statements.
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