Exam 1: Business, Accounting, and You

Generally Accepted Accounting Principles (GAAP)are the rules and guidelines governing accounting.

The business entity concept requires that the owner's personal assets be separated from business assets.

Trina borrowed money for her business from a local bank. What accounts will be affected?

The main role of accounting is to compile reports to determine the profit made by a company over a period of time.

The only way for business to get money is to borrow it.

To manage a business effectively, an owner or manager would benefit greatly from having some knowledge of accounting.

All businesses are operated to generate a profit.

Macy's and Kohls are examples of:

The fundamental accounting equation is Assets plus Liabilities equals Stockholders' Equity.

Rapid Repair buys a new machine for its shop on credit. The effect on the accounting equation is to:

A business purchases a computer for cash. What effect does this have on the accounting equation?

A net loss will:

Accounting information is used to help managers and decision makers understand risk.

According to the textbook, in order for an organization to be called a business it must:

Which of the following is NOT part of the accounting process as it relates to information?

The Balance Sheet is used to report:

Liabilities represent:

Which of the following would NOT be considered a stakeholder in a business?

Illusions, Inc. provided $27,000 worth of services for cash. Which of the following best describes the effect on the expanded accounting equation?

GAAP is the acronym for generally accepted ________ principles.