Introduction to Accounting
A person who reviews the operating and accounting control procedures adopted by management to make sure the controls are adequate and are being followed may be referred to as a(n)
internal auditor.
Entering financial information about events affecting the company into the accounting system is called ____________________.
recording
One who assumes all risks for the business and whose personal assets can be taken to pay creditors is called a(n) ____________________.
sole proprietor owner partner
The accounting function of classifying is
sorting and grouping similar items together.
The owners of a corporation are called ____________________.
stockholders shareholders
Bringing together various items of information to determine or explain a result is
summarizing.
____________________ design the accounting information system and focus on analyzing and interpreting information by studying the impact of alternative decisions.
Accountants
____________________ is the process by which accountants help managers develop a financial plan.
Budgeting
An internal auditor can achieve professional recognition in internal auditing by receiving which of the following certificates?
CIA
The principal accounting officer of a company is called a public accountant.
Fales
A CMA is a Certified Marketing Auditor.
False
A partnership is owned by stockholders or shareholders and is managed by them.
False
Cost accounting is used to develop a financial plan for a company.
False
Creditors need detailed measures of business performance.
False
Interpreting refers to reviewing events that have taken place and determining how they affect a business.
False
Writing or using one of the latest technological advances to enter a transaction in the accounting records is called summarizing.
False
____________________ is deciding the meaning and importance in various reports, which may include ratio analysis to help explain how pieces of information relate to one another.
Interpreting
____________________ is the aggregation of many similar events to provide information that is easy to understand.
Summarizing
A business that makes a product to sell is called a manufacturing business.
True
A public accountant can achieve professional recognition as a Certified Public Accountant by meeting certain educational and experience requirements as determined by each state.
True
Accountants design accounting information systems and analyze and interpret information.
True
Because financial information is communicated in accounting terms, accounting is said to be the "language of business."
True
Generally accepted accounting principles are procedures and guidelines to be followed in the accounting/reporting process.
True
Owners are most interested in a company's profitability and current financial performance.
True
Stockholders may have very little influence on business decisions.
True
The Financial Accounting Standards Board develops generally accepted accounting principles to provide some assurance that companies are reporting business activities in a similar manner.
True
The purpose of accounting is to provide financial information about the current operations and financial conditions of a business to individuals and organizations.
True
The six major steps of the accounting process are analyzing, recording, classifying, summarizing, reporting, and interpreting.
True
A person who records, sorts, and files accounting information in accounting records may be referred to as a(n)
accounting clerk.
Looking at events that have taken place and thinking about how they affect a business is called ____________________.
analyzing
Cost accountants provide a wide variety of services including
analyzing the cost effectiveness of products produced and services provided.
Examining a transaction or event to determine its fundamental significance to the business so that the relevant information may be properly processed is called
analyzing.
The accountant who oversees the entire accounting process and is the principal accounting officer of the company is called the ____________________.
controller
Which of the following types of businesses is owned by stockholders?
corporation
Rules that businesses must follow when preparing financial statements are called ____________________.
generally accepted accounting principles GAAP
____________________ involves the application of standard review and testing procedures to be certain that proper accounting policies and practices have been followed.
Auditing
Public accountants do NOT offer which of the following services?
marketing analysis
A business that buys a product from another business to sell to customers is called a(n) ____________________ business.
merchandising
A business that purchases a product from another business to sell to customers is called a
merchandising business.
A(n) ____________________ is owned by two or more people who assume the risks for the business and whose assets may be taken to pay creditors.
partnership
Which of the following does NOT use nonprofit accounting guidelines and procedures?
proprietorships