2. Introduction to Accounting

Question 1

is commonly known as the “language of business”.

Answer 1

accounting

Question 2

is a service activity. Its function is to provide quantitative information, primarily financial in nature, about economic entities that is intended to be useful in making economic decisions

Answer 2

Accounting

Question 3

is an information system that measures, processes and communicates financial information about an identifiable economic entity.

Answer 3

accounting

Question 4

is the process of identifying, measuring and communicating economic information to permit informed judgment and decision by users of the information

Answer 4

Accounting

Question 5

is the art of recording, classifying, and summarizing in a significant manner and in terms of money, transactions and events which are, in part at least of financial character, and interpreting the results thereof

Answer 5

Accounting

Question 6

are summary accounting reports prepared periodically to inform interested parties as to the financial condition and operating results of the business.

Answer 6

Financial Statements

Question 8

The financial statement that summarizes revenues and expenses for a specific period of time, usually a month or a year.

Answer 8

Statement of Financial Performance (Income Statement)

Question 9

are always prepared for a period of time and the term “for the period ended” is included in the title.

Answer 9

Income statements

Question 10

The financial report that summarizes all the changes in owner’s equity (capital) that occurred during a specific period.

Answer 10

Statement of Changes in Owner’s Equity

Question 11

shows the amount and nature of business assets, liabilities, and owner’s equity (capital) as of a specific point in time. The account balances at the end of accounting year will carry forward to become the beginning balances of the subsequent year

Answer 11

Statement of Financial Position (Balance Sheet)

Question 12

The financial statements also show the inflows and outflows of cash in the different activities of the business (operating, investing, and financing activities).

Answer 12

Statement of Cash Flow

Question 13

Qualitative, quantitative, and financial information that could affect the decisions of users are included in the notes to financial statements.

Answer 13

Notes to the Financial Statements

Question 14

a systematic method of recording business transactions in accordance to the accounting principles.

Answer 14

Financial Accounting

Question 15

provides information to management for better administration of the business.

Answer 15

Management Accounting

Question 16

deals with evaluating the cost of a product or service offered.

Answer 16

Cost Accounting

Question 17

deals with the preparation and filing of various tax returns and dealing with their legal implications.

Answer 17

Tax Accounting

Question 18

It is where an external certified public accountant known as an Auditor inspects and certifies the accounts of the business for their accuracy and consistency.

Answer 18

Auditing