Accounting Smartbook 1

The fundamental model of business valuation is commonly referred to as the

accounting equation

The primary functions of accounting are to

communicate information to decision makers measure a company's activities

A business organization that is legally separate from its owners is called a

corporation

The form of business organization where an entity is legally separate from its owners and issues shares of stock is a Multiple choice question.

corporation

amounts owed to creditors are

liabilities

Any amount owed to a creditor is classified in the balance sheet as a

liability

____________________ activities involve purchasing goods from suppliers, designing and manufacturing products, and selling products to customers

operating

In financial accounting which of the following are the three types of business activities of a company?

operating, investing, financing

Identify the three most common forms of business organization

partnership, corporation, sole propietorship

An advantage of the corporate form of organization is that a corporation

provides limited liability to stockholders.

revenues are

sales of good or services to customers

The three most common forms of business organization are

sole proprietorship, partnership, corporation

For a corporation, the owners' claims to the resources of a company are called

stockholder's equity

Which of the following items are assets?

supplies, equipment

Expenses are

the costs of doing business that are necessary to produce revenue

Stockholders' equity is

the owner's claims to resources of the corporation

Which of the following is the accounting equation? Multiple choice question.

Assets = Liabilities + Stockholders' equity

Using the accounting equation, stockholders' claims on the resources of the corporation can be expressed as

Assets- liabilities