Chapter 1 - College Accounting: A Practical Approach

Question 1

What is a sole proprietorship?

Answer 1

One owner

Question 2

What is a partnership?

Answer 2

At least two owners

Question 3

What is a corporation?

Answer 3

Owned by shareholders

Question 4

What is a No-For-Profit?

Answer 4

No owners - for the benefit of society

Question 5

What are some examples of external stakeholders?

Answer 5

Lenders
Shareholders
Government
Customers
Investors
Communtiy

Question 6

What are some examples of internal stakeholders?

Answer 6

Officers
Controllers
Managers
Internal Auditors
Sales Staff

Question 7

What are some examples of duties that a Financial Accountant handles?

Answer 7

Statement preparation and analysis
Auditing
Regulatory Issues
Planning

Question 8

What are some examples of duties that a Managerial Accountant handles?

Answer 8

Cost accounting
Budgeting
Internal Auditing
Management Consulting
General Accounting

Question 9

What are some duties that the Tax Accountant handles?

Answer 9

Tax preparation
Tax planning
Tax regulatory compliance
Tax consulting

Question 10

What are some of the duties of other accounting related professionals nals?

Answer 10

Analysts
Appraisers
Underwriters in Insurance e
Planners
Traders
Managers of Accounting
Consultants

Question 11

What is the general accounting designation?

Answer 11

CPA

Question 12

What does CPA stand for?

Answer 12

Chartered Professional Accountant

Question 13

What is a CA?

Answer 13

Chartered Accountant

Question 14

What is a CMA

Answer 14

Certified Management Accountant

Question 15

What is a CGA?

Answer 15

Certified General Accountant

Question 16

What are the 6 main accounting standards?

Answer 16

Analyzing
Recording
Classifying
Summarizing
Reporting
Interpreting

Question 17

What accounting Standard is the following:

“Looking at what happened and how it affected the business”

Answer 17

Analyzing

Question 18

What accounting standard is the following?

“Putting the information into an accounting system”

Answer 18

Recording

Question 19

What accounting standard is the following?

“To group all the same activities together”

Answer 19

Classifying

Question 20

What accounting standard is the following?

“Creating totals based on a category or date”

Answer 20

Summarizing

Question 21

What accounting standard is the following?

“Issue reports that tell the result of the accounting functions”

Answer 21

Reporting

Question 22

What accounting standard does the following fall under?

“Examining reports and providing feedback to users”

Answer 22

Interpreting

Question 23

What does “GAAP” stand for?

Answer 23

Generally Accepted Accounting Principles

Question 24

What are the guidelines set forth that must be followed in the accounting process that ensures everyone is preparing and interpreting reports the same way called?

Answer 24

GAAP

Question 25

What does IFRS stand for?

Answer 25

International Financial Reporting Standards

Question 26

When is IFRS used?

Answer 26

When your company has shares listed on stock exchanges

Question 27

What is the word used to describe the moral principles that guide conduct of individuals in the industry?

Answer 27

Ethics

Question 28

What is the following called: Assets = Liabilities + Owners Equity

Answer 28

Accounting equation

Question 29

Items of value owned by a company are called…

Answer 29

Assets

Question 30

Obligations made by a company are called…

Answer 30

Liabilities

Question 31

An owners investment into their company is called…

Answer 31

Capital

Question 32

Is capital always cash?

Answer 32

NO

Question 33

Who’s portion of the assets are the liabilities?

Answer 33

Creditors

Question 34

Who owns the Owners Equity portion of the assets?

Answer 34

Owners

Question 35

What are equities?

Answer 35

Financial claims against the assets

Question 36

Can the accounting equation be stated in different ways?

Answer 36

YES

Question 37

When the make up of assets is changed but the total assets stays the same, this is called?

Answer 37

Shift in assets

Question 38

What report is the breakdown of the accounting equation?

Answer 38

Balance Sheet

Question 39

What 3 bits of information are listed in the header and what order do they come in?

Answer 39

Company Name Report Name Date

Question 40

What does a single line mean on the reports?

Answer 40

Subtotalling

Question 41

What does a double line on a report mean?

Answer 41

Total

Question 42

What should always be aligned on reports to avoid errors?

Answer 42

Numbers

Question 43

Can a balance sheet tell you if the company will turn a profit?

Answer 43

NO

Question 44

On a balance sheet, where do you put the $?

Answer 44

Top lines and totals

Question 45

What do we call the amount earned when a 0service is rendered or a sale is made?

Answer 45

Revenue

Question 46

What does revenue increase?

Answer 46

Owners Equity

Question 47

When do you record revenue?

Answer 47

When is is earned (not necessarily when paid)

Question 48

Define an expense

Answer 48

Costs faced to run the business

Question 49

How is the owners equity effected when an expense is incurred?

Answer 49

Decreases owners equity

Question 50

Define Net Income

Answer 50

When revenue is greater than expenses

Question 51

If expenses are greater than revenue, what is this considered?

Answer 51

Net Loss

Question 52

What are withdrawals?

Answer 52

Assets the owner(s) withdraw for personal use

Question 53

How is owners equity effected when a withdrawal occurs?

Answer 53

Decreases owners equity

Question 54

What is the difference between the accounting equation and the expended accounting equation?

Answer 54

Expended lists the actual accounts that are under each classification

Question 55

What order do the financial statements come in?

Answer 55

1. Income Statement 2. Statement of Owners Equity 3. Balance Sheet

Question 56

Which report will show the net loss or net income?

Answer 56

Income statement

Question 57

Which financial report shows a period of time?

Answer 57

Income Statement

Question 58

Which financial statement shows a moment of time?

Answer 58

Balance Sheet d

Question 59

Where are the $ signs place on an income report?

Answer 59

Top of the column and totals

Question 60

Are withdrawals on the income statement?

Answer 60

NO

Question 61

What is the inside column of an income statement used for?

Answer 61

Subtotalling

Question 62

What accounts are shown on the income statement?

Answer 62

Revenue & Expenses

Question 63

What changes are reflected on the Statement of Owners Equity?

Answer 63

Changes to the owners capital

Question 64

What increases owners capital?

Answer 64

Owners investment & Net income

Question 65

What decreases owners capital?

Answer 65

Withdrawals and net loss

Question 66

What are external users?

Answer 66

People not directly involved in running the organization?

Question 67

Who are internal users?

Answer 67

People directly involved in running the business

Question 68

What type of accountant is usually on staff?

Answer 68

Managerial accountant

Question 69

What accounts are a subdivision of owners equity?

Answer 69

Revenue Expenses Withdrawals Capital

Question 70

Does net income / loss show the amounts listed on account?

Answer 70

YES