Exam (elaborations)
Accounting 101- Exam 1 Questions with Correct Answers
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- Accounting
Accounting 101- Exam 1 Questions with Correct Answers
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Accounting 101- Exam 1 Questions withCorrect Answers
types of business - Answer-sole proprietorship, partnership, corporation
sole proprietorship - Answer-single owner of a business
partnership - Answer-2 or more owners of a business
corporation - Answer-ownership evidenced by shares of stock
balance sheet - Answer-current financial condition that summarizes the assets, liabilities
and owners' equity at a specific time point
income statement - Answer-how a business performs with in a period of time;
summarizes revenues and expenses
statement of retained earnings - Answer-analysis of retained earnings with in time
period; summarizes the income earned and dividends paid
who uses the financial statements - Answer-creditors, current and potential owners,
suppliers, banks, government agencies, trade associates
assets - Answer-future economic benefits
liabilities - Answer-obligations of a business
expenses - Answer-outflow of assets resulting from the sales of goods and services
revenue - Answer-inflow of assets resulting from the sales of goods and services
current asset - Answer-assets that are assumed to be consumed within one year
current liability - Answer-obligation that will be satisfied within one year
working capital = - Answer-current assets-current liabilities
profit margin = - Answer-net income/sales
gross profit margin = - Answer-gross profit/sales
current ratio - Answer-company's ability to pay back their debts
current ratio = - Answer-current assets/current liabilites
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