Accounting Module 1

Business entity that is legally separate and distinct from its owners

Corporation

When a company operates in a more certain environment it tends to focus inward:

Efficiency Strategy

An amount incurred from using resources or services in an effort to generate revenues

Expense

The Report of the Independent Auditor is the opinion of the CPA firm that examined the financial statements of a company and states what?

Financial statements are presented fairly in accordance with GAAP

Activities involving obtaining necessary funds to purchase long-term assets, repay liabilities, and provide a return for owners

Financing activities

An accounting firm borrows $100,000 to buy a new computer system. This is an example of:

Financing activity

The Capital Resources Process feature which pair of activities:

Financing and Investing Activities

Net income is found:

Income Statement & Statement of Change's in Shareholders' Equity

The balanced scorecard approach has four perspectives, which is not one?

Internal Control Perspective

What is not one of the four business processes?

Internal Control Process

The obligation to transfer economic resources to suppliers of goods and services at some point in the future

Liability

Creditors of a company can only claim the assets of the firm and not the assets of the owners of the firm

Limited Liability

Money invested in a corporation is at risk but investors' personal possessions are not at risk if the business fails

Limited Liability

Partnership composed of one or more general partners and one or more limited partners; only the general partners personal possessions are at risk if the business should fail

Limited Partnership

Assets minus liabilities

Net Assets

A company's total revenue less its total expenses for a period of time

Net Income

On a bank reconciliation, what reduces the bank's cash balance?

Outstanding check

Represents the claims on the business to transfer the residual interest (net assets) to the owners

Owner's Equity

Business owned by two or more individuals whose personal possessions are at risk if the business fails

Partnership

What is value added time?

Processing time

What measures the liquidity of a company?

Quick Ratio

An amount earned from rendering services or transferring resources to customers

Revenue

Business entity owned by one person whose personal possessions are at risk if the business fails

Sole Proprietorship