Accounting 2110 Smart Book Chapter 1

Identify the correct definition of an asset.

An asset is a resource that a business owns or controls.

Which of the following correctly depicts the accounting equation?

Assets = Liabilities + Equity

Given that Jacob's Chocolates had owner investments of $4,000; net income during the period of $10,000; and owner withdrawals of $300 calculate the ending balance in the owner's capital account.

$13,700

Which of the following statements below lists the rules of entering transactions into the accounting equation?

The accounting equation must always remain in balance so that assets always equal the sum of liabilities and equity.

A process of analyzing data to identify meaningful relations and trends is called data

analytics

A process of analyzing data to identify meaningful relations and trends is called data _______

analytics or data analytics

Generally accepted accounting principles (GAAP) wants information to have: Check all that apply.

faithful representation relevance

What a business owns will always equal what it owes to creditors and owners.

What a business owns will always equal what it owes to creditors and owners.

Which of the statements correctly represents the accounting equation?

What a business owns will always equal what it owes to creditors and owners.

The three factors that must exist for a person to commit fraud include __, __, and __.

pressure rationalization opportunity

Which of the statement(s) below define(s) an asset? (Check all that apply.)

A resource owned Resources controlled by the business Resources with future benefits

Define what the income statement reports by completing the following sentence: The income statement describes a company's __________(assets/revenues) and ___________ (expenses/liabilities) along with the resulting net income or loss over a period of time due to earnings related activities.

Blank 1: revenues Blank 2: expenses

Users who do not directly run the organization and have limited access to accounting information are called (internal/external) users.

External

Users of accounting information can be divided into two main groups. These groups include:

External, internal

An employee that has unpaid bills might exhibit the following fraud factor:

Pressure

When recording transactions into the accounting equation, which of the following statements are correct? (Check all that apply.)

The accounting equation must always remain in balance. After recording the transaction, total assets will always equal total liabilities plus owner's equity.

What are Generally Accepted Accounting Principles?

The concepts and rules that govern financial accounting practice.

The correct definition of an income statement includes which of the following?

The statement describes a business's revenues and expenses over a period of time.

The _____ principle states that accounting information is based on actual cost.

measurement

The ______ principle states that revenue is recognized when goods or services are provided to customers and at an amount expected to be received.

revenue

The _______ recognition principle states that revenue is recognized when goods or services are provided to customers and at an amount expected to be received.

revenue

The four general accounting principles include: (Check all that apply).

revenue recognition expense recognition measurement full disclosure

A graphical presentation of data to help in understanding their significance is called data _.

visualization