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