Capt 1 & 2

Question 1

Ethics

Answer 1

beliefs that distinguish right from wrong

Question 2

Monetary Unit Assumption

Answer 2

Transactions and events are expressed in monetary or money units

Question 3

Liabilities

Answer 3

A thing for which someone is responsible, especially a debt or financial obligation

Question 4

Ledger

Answer 4

collection of all accounts and their balances for an accounting system

Question 5

Assets

Answer 5

resource that is expected to provide a future benefit to its owner

Question 6

Equity

Answer 6

The amount of capital invested or owned, by the owner of a company

Question 7

Statement of Cash Flows

Answer 7

lists the cash inflows and cash outflows for the period

Question 8

Balance Sheets

Answer 8

reports the financial position at a point in time

Question 9

Statement of Owner’s equity

Answer 9

reports changes in equity over the reporting from the net income(or loss) and from any owner investments or withdrawals over a period of time

Question 10

Income Statement

Answer 10

reports revenues less expenses incurred by a business over a period of time

Question 10

Debt Ratio

Answer 10

Total liabilities/ Total Assests

Question 11

Account Balance

Answer 11

difference between the increases and decreases in an account

Question 12

Chart of Accounts

Answer 12

list of all accounts and includes an identifying number for each account

Question 13

Generally Accepted Accounting Principles (GAAP)`

Answer 13

a set of accounting rules and procedures used in standardized financial reporting practices. Wants information to have relevance and faithful representation

Question 14

Account

Answer 14

is a record of increases and decreases in a specific asset, liability, equity, revenue, or expense

Question 15

Return on Assets (ROA)

Answer 15

Net Income/Average Total Assets

Question 16

Going-Concern Assumption

Answer 16

The business is presumed to continue operating instead of being closed or sold

Question 17

Full Disclosure Principle

Answer 17

A company reports the details behind financial statements that would impact users’ decisions in the notes to the financial statements

Question 18

Revenue Recognition Principle

Answer 18

when goods / services are provided to customers, the amount expected to be received from the customer

Question 19

Matching Principle

Answer 19

A company records its expenses incurred to generate the revenue reported

Question 20

Revenue

Answer 20

payment for a service

Question 21

Cost Principle

Answer 21

Assets should always be recorded at their cost, when the asset is new and also for the life of the asset. Actual cost = Objective

Question 22

Accounting

Answer 22

an information and measurement system that identifies, records, and communicates an organization’s business activities. Language of Business