Questions and Answers
What is accounting often referred to as?
The language of business
Who are the owners of a corporation typically called?
Shareholders or stockholders
Which of the following does NOT use nonprofit accounting guidelines and procedures?
What is the process of examining a transaction or event to determine its significance in accounting?
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Public accountants do NOT offer which of the following services?
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What does financial accounting include?
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Writing or using one of the latest technological advances to enter a transaction in the accounting records is called summarizing.
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What is a business that purchases a product from another business to sell to customers called?
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A public accountant can achieve professional recognition as a Certified Public Accountant by meeting certain educational and experience requirements as determined by each state.
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The six major steps of the accounting process are analyzing, recording, classifying, summarizing, reporting, and interpreting.
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What is the accounting function of classifying?
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What services do cost accountants provide?
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The Financial Accounting Board develops generally accepted accounting principles.
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A business that makes a product to sell is called a manufacturing business.
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What type of ownership structure involves two or more people assuming risks for the business?
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Accountants design accounting information systems and analyze and interpret information.
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A CMA is a Certified Marketing Auditor.
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The purpose of accounting is to provide financial information about a business's operations and conditions.
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Generally accepted accounting principles are procedures and guidelines to be followed in the accounting process.
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Cost accounting is used to develop a financial plan for a company.
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Since financial information is communicated in accounting terms, accounting is referred to as the 'language of business.'
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What does interpreting entail in accounting?
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What is the accounting process that helps managers develop a financial plan?
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What is the role of a bookkeeper?
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What is a type of ownership structure where one person owns the business?
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What does classifying involve in accounting?
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What is accounting?
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What do we call a business that buys a product from another business to sell to customers?
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What do we call a business that makes products to sell?
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What is a type of ownership structure involving more than one person?
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What is the process of reviewing and testing accounting policies called?
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What does tax accounting focus on?
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What does interpreting information in reports involve?
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What does summarizing involve in accounting?
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What is internal auditing?
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What involves entering financial information into the accounting system?
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What does an accounting clerk specialize in?
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What does reporting in accounting refer to?
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What type of ownership structure has many owners who employ professional managers?
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What does analyzing involve in accounting?
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What process helps accountants develop a financial plan?
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What does cost accounting determine?
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What do we call a business that provides a service?
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What does Generally Accepted Accounting Principles refer to?
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What do financial accounting processes include?
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A partnership is owned by stockholders or shareholders and is managed by them.
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What is an internal auditor responsible for?
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Who typically manages a corporation?
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Who records, sorts, and files accounting information?
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The principal accounting officer of a company is called a public accountant.
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Study Notes
Accounting Fundamentals
- Accounting is recognized as the "language of business," facilitating communication of financial information.
- Shareholders or stockholders are the legal owners of a corporation.
- Proprietorships do not adhere to nonprofit accounting guidelines.
Accounting Concepts and Processes
- Analyzing is the process of evaluating events to understand their significance for a business.
- Public accountants do not provide marketing analysis services.
- Financial accounting encompasses the preparation of reports and analysis of business decisions.
Classifications and Structures
- A merchandising business purchases products from other businesses for resale to customers.
- Manufacturing businesses create products for sale.
- Sole proprietorships and partnerships represent specific business ownership structures, each with distinct attributes.
Accounting Roles and Certifications
- Certified Public Accountants (CPAs) achieve recognition through meeting educational and experiential state requirements.
- Cost accountants analyze the cost-effectiveness of goods and services.
- Internal auditors review controls and ensure compliance with accounting practices.
Fundamental Accounting Principles
- Generally Accepted Accounting Principles (GAAP) govern the standards for financial reporting.
- The accounting process involves six essential steps: analyzing, recording, classifying, summarizing, reporting, and interpreting.
- Budgeting assists managers in developing financial plans.
Key Accounting Terms and Functions
- Classifying involves sorting similar items rather than merely recording them chronologically.
- Accounting involves gathering, processing, and reporting financial information for stakeholders.
- Tax accounting focuses on tax planning and compliance with tax regulations.
Accounting Activities and Responsibilities
- Accounting clerks manage specific tasks like payroll and accounts receivable.
- Summarizing entails synthesizing various data points to derive meaningful insights.
- Auditing ensures that accounting practices are appropriately implemented and controls are followed.
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Description
Test your knowledge of fundamental accounting concepts with this quiz based on Chapter 1. Explore essential terms and definitions that are pivotal for understanding the language of business. Perfect for beginners in accounting or a quick review for students.
