Accounting Principles Overview

<p>A tool for purchasing items on credit, with repayment at a later time. (A)</p> Signup and view all the answers

<p>Management and consultation (B)</p> Signup and view all the answers

<p>To provide quantitative information for making economic decisions. (B)</p> Signup and view all the answers

<p>The residual interest in the assets of the entity after deducting liabilities. (D)</p> Signup and view all the answers

<p>Income Statement (C)</p> Signup and view all the answers

<p>An agreement where the borrower pledges an asset as a security for their loan. (B)</p> Signup and view all the answers

<p>Assets that are expected to be converted to cash within a year. (B)</p> Signup and view all the answers

<p>For governments to raise funds. (C)</p> Signup and view all the answers

<p>Through dividends. (D)</p> Signup and view all the answers

<p>It protects entities from potential financial losses and also serves as a form of investment. (B)</p> Signup and view all the answers

A loan that doesn't require the borrower to offer any assets as security in case of default.

A plastic card allowing the holder to purchase goods and services on credit, paying later with interest.

A contract where a person pays a regular fee to a company for protection from financial loss due to certain events (like injury, death, or damage).

A method of transferring funds from one person to another through a bank, with a service fee.

A service offered by banks to manage investments and funds on behalf of clients.

The process of identifying, measuring, and communicating economic information to aid in informed decision-making.

Assets are resources an organization owns, such as property, possessions, or goods. They can be classified as current assets or fixed assets.

Liabilities are legal and financial obligations an organization owes to others. They can be classified as current liabilities or long-term liabilities.

The balance sheet is a financial statement that shows a company's assets, liabilities, and owner's equity at a specific point in time.

The income statement, also known as the profit and loss statement, summarizes a company's revenues and expenses over a specific period of time.

Profit, also known as income, is the difference between a company's revenues and expenses.

A secure loan requires the borrower to pledge an asset as collateral, which the lender can take possession of if the borrower defaults.

An unsecured loan does not require the borrower to provide collateral. This type of loan carries higher interest rates due to the greater risk for the lender.