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Small Bus MNG Exam 3 Questions and Answers
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Small Bus MNG Exam 3 Questions and Answers
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Small Bus MNG Exam 3Accounting: - Answer -a language of business employed to communicate financial information based
upon analyzing, recording, classifying, summarizing, reporting, and interpreting of financial data
Cash basis accounting: - Answer -an accounting practice in which revenue is not recognized in the
accounting records until it is received, and expenses are not recognized until they are paid. You
will not have Accounts Receivable and you will not have Accounts Payable
accounts recievable - Answer -(money you are expected to receive for service/goods already provided)
accounts payable - Answer -(money you owe for service/goods your
business has already received)
Accrual accounting: - Answer -an accounting practice in which you recognize all revenue and expenses
regardless if they have been received or paid.
You will have Accounts Receivable for revenue earned by not paid to your business yet and you will
have Accounts Payable for expenses you owe buy have not paid yet
accounting rules by : - Answer -Financial Accounting Standards Board as a set of standards called
Generally Accepted Accounting Principles (GAAP) that all business are expected to follow.
, all accounting is based on the... - Answer -accounting equation
the accounting equation states the relationship between a company's assets,liabilities, and owner's
equity.
what is the account equation - Answer -Assets = Liabilities + Owner's Equity
business transactions - Answer -(economic event that affects the financials of the business)
Double-entry accounting uses the equation to show the - Answer -relationship between assets,
liabilities, and equity. Because this equation must remain balanced, all business transactions will affect
at least two accounts(double-entry accounting).
The accounting equation shows if - Answer -business assets were purchased with business funds or if
they were financed through debt.
assets - Answer -items of monetary value owned by a business•
Examples of Assets: cash, inventory, supplies, office equipment,buildings, accounts receivable, computer
equipment, automobiles,prepaid insurance, etc
liabitliies - Answer -debts to other business entities or people•
Liability examples: accounts payable, payroll tax payable, wages payable, etc.
Owner's equity: - Answer -the amount by which the total assets exceed the total liabilities of a business;
also called capital or net worth•
Owner's equity example: capital in the business• Drawing, expenses and revenue all directly affect the
owner's equity.
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