2.2 Accounting: The Universal Language of Business

Question 1

Produces information used by businesses to make decisions.

Answer 1

Accounting system

Question 2

A software application that automates financial records and reporting processes to make them faster, more accurate, and easier to manage.

Answer 2

Computerized accounting system

Question 3

The set of rules that all accountants use to prepare financial reports.

Answer 3

GAAP (generally accepted accounting principles)

Question 4

Documents that present summarized information
about the financial status of a business.

Answer 4

Financial reports

Question 5

The type of accounting that focuses on
reporting information to external users.

Answer 5

Financial accounting

Question 6

The type of accounting that focuses on reporting information to management; often referred to as accounting for internal users of accounting information.

Answer 6

Management accounting

Question 7

The accounting assumption that a business exists independently
of its owner’s personal holdings. The accounting records and
reports are maintained separately and contain financial information related only to the business.

Answer 7

Business entity

Question 8

The period of time covered by an accounting report.

Answer 8

Accounting period

Question 9

The accounting assumption that a business is expected to operate indefinitely.

Answer 9

Going concern