Exam (elaborations)
Accounting Exam #1 Terms Questions and Answers
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- Accounting
Accounting Exam #1 Terms Questions and Answers
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Accounting Exam #1 Terms Questionsand Answers
accounting - Answer-an information system that provides reports to other users about
the economic activities and condition of a business
assets - Answer-the resources owned by a business
liabilities - Answer-debts owed to creditors
owner's equity - Answer-the owner's right to the assets of the business after all liabilities
have been paid
business entity concept - Answer-limits the economic data in an accounting system to
data related directly to the activities of the business
cost concept - Answer-amounts are initially recorded at their historical cost (amount you
paid, not the value)
income statement - Answer-a summary of the revenue and expenses for a specific
period of time, such as a month or year.
statement of owner's equity - Answer-a summary of the change's in owner's equity that
have occurred during a certain period of time
balance sheet - Answer-a list of the assets, liabilities, and owner's equity as of a specific
date
financial statements - Answer-the reports prepared for users after transactions have
been recorded and summarized
debit - Answer-An amount recorded on the left side of a T account
credit - Answer-An amount recorded on the right side of a T account
accrual basis - Answer-revenues are reported in the same period as the revenues to
which they relate
cash basis - Answer-revenues and expenses are reported on the income statement in
the period in which the cash is received or paid
adjusting process - Answer-the analysis and updating of accounts at the end of the
period before the financial statements are prepared
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