Basic Accounting Principles Review
False
Accounting is simply the process used to figure out how much money a business made during a certain time period.
Current liabilities
Accounts payable are classified as which of the following?
Income statement
An __________ is a summary of a company's profit or loss during any one given period of time.
Nine
How many steps are in the business operating cycle?
Monthly
How often should a business calculate profitability and review financial statements?
Credit limits
Income statements are used to help determine_____________.
False
It is often beneficial for a business owner to use business accounts and personal accounts interchangeably.
False
The financial Accounting Standards board is the government agency regulating the accounting industry.
Generally Accepted Accounting Principles
What are the accounting rules used to prepare, present and report financial statements called?
Accounts payable is decreased by a debit
When suppliers are paid which of the following occurs?
Costs of goods sold
Which of the following are the costs directly associated with making or acquiring products such as materials purchased from outside suppliers?
Land
Which of the following is NOT a current asset?
Income statements
Which of the following is also known as a profit and loss statement?
Gross Profit
Which of the following is derived by subtracting the cost of goods sold from the net sales Figures?
Net income
Which of the following is the amount of money the business has earned after paying income taxes?
Revenue-Expenses= Profit
Which of the following is the correct equation for profit?
Collect payment for credit sales
Which of the following is the last step in the business operating cycle?
Cash
Which of the following is the most liquid asset?
Sales Figures
Which of the following represents the amount of revenue generated by a business?
Assets= Liabilities + Owner's Equity
Which of the following represents the basic accounting equation?
Profit and loss statement
Which of the following shows any changes which have occurred in the numerical balances of a company?
Balance Sheet
Which of the following shows the numerical balances determined by the chart of accounts?
Debits decrease liabilities
Which of the following statements is TRUE?
Assets
______________ are items of value your company owns.
Liabilities
___________are any debts or obligations owed by the company.