Accounting

Question 1

Accounting

Answer 1

The process of collecting, recording, classifying, summarizing, reporting, and analyzing financial activities

Question 2

Financial accounting

Answer 2

Accounting that focuses on preparing external financial reports that are used by outsiders such as lenders, suppliers, investors, and government agencies to assess the financial strength of a business

Question 3

Managerial accounting

Answer 3

Accounting the provides financial information that managers inside the organization can use to evaluate and make decisions about current and future operations

Question 4

Auditing

Answer 4

The process of reviewing the records used to prepare financial statements and issuing a formal auditor’s opinion indicating whether the statements have been prepared in accordance with accepted accounting rules

Question 5

Certified public accountant (CPA)

Answer 5

An accountant who has completed an approved bachelor’s degree program, passed a test prepared by the American Institute of CPAs, and met state requirements. Only a CPA can issue an auditor’s opinion on a firm’s financial statement.

Question 6

Balance sheet

Answer 6

A financial statement that summarizes a firm’s financial position at a specific point in time