Accounting Quiz #1

Balance Sheet Formula

Assets = Liabilities + Owner's Equity

the appointment of a new CPA firm to perform an audit

CANNOT be quantified into dollars and cents and recorded as an accounting transaction

Net Income Formula

Revenues - Expenses = Net Income

transaction

accountants refer to an economic event as a

preparing accounting reports

communication of economic events is the part of the accounting process that involves

identification, recording, communication

order of accounting process

income statement, owner's equity, balance sheet

order of preparation for financial statements

earned

record revenue when it is

assets

selling on credit creates

indentifying

the starting point of the accounting process

identifying, recording, and communicating

three basic activities which are related to economic events of an organization

primary purpose of accounting

to create financial statements