Accounting Basics

Question 1

what do accountants do?

Answer 1

provide financial information to help make decisions

Question 2

what is data?

Answer 2

raw and unorganized facts that is useless until organized

Question 3

what is information?

Answer 3

organized and useful data

Question 4

what is a transaction?

Answer 4

an event that occurs during operations in a business resulting in financial change

Question 5

what are records?

Answer 5

proof that an event has occurred in the past (documents a businesses daily financial activities)

Question 6

what are internal controls?

Answer 6

processes and procedures put in place to promote honesty and accuracy in financial records

Question 7

who uses accounting information?

Answer 7

internal users (the owner, finance department, marketing team, etc.) and external users (potential investors, the government, sponsors, etc.)

Question 8

what information would a business owner want to know from an accountant?

Answer 8

net worth, potential revenue, expenses, debt, etc.