Topic 1

Question 1

Accounting information is used in _____.

Answer 1

decision making

Question 2

Role of Accounting Information in Decision-Making for Investors

Answer 2

is to inform them of potential risks and losses, as well as profits, if they provide you with capital

Question 3

Importance of Accounting Information for Decision-Making for Accountants

Answer 3

they can advise you in your owndecision-making

Question 4

The_____cannot be isolated from the _____.

Answer 4

efficiency of planning anddecision making; availability and sufficiency ofaccounting information

Question 5

is the branch of accounting that focuses on standardized reporting to provide information to external users

Answer 5

Financial Accounting

Question 6

those that offer their stock for sale on various exchanges

Answer 6

Publicly Traded Companies

Question 7

Publicly traded companies are required to prepare financial accounting reports and file them with the _____ for public viewing

Answer 7

Securities and Exchange Commission

Question 8

Once the necessary economic information has been accumulated in a readable format, decision makers use this information to improve the _____.

Answer 8

decision-making process

Question 9

Decisions made will impact future economic activities which will then find their way into the _____.

Answer 9

data accumulation process

Question 10

Objectives to Achieve the Best Accounting Information System

Answer 10

1. To process information efficiently at a low cost
2. To obtain reports on a timely basis.
3. To ensure a high degree of accuracy.
4. To minimized the possibility of theft or fraud.

Question 11

produces accounting information used by decision makers in making economic decisions and taking specific actions

Answer 11

Accounting Process

Question 12

information describing the financial resources, obligations, and activities of an economic entity ( either an organization or an individual)

Answer 12

Financial Accounting

Question 13

involves the development and interpretation of accounting information intended specifically to assist management in operating the business

Answer 13

Management Accounting

Question 14

The preparation of income tax returns is a specialized field within accounting

Answer 14

Tax Accounting

Question 15

are based on financial accounting information

Answer 15

Tax Returns

Question 16

is an 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 a financial character and interpreting the results thereof

Answer 16

Accounting

Question 17

is the process of recording systematically the business transactions in the order of their occurrence

Answer 17

Bookkeeping

Question 18

Four Phases of Accounting

Answer 18

1. Identifying and Recording Transactions
2. Sorting and Classifying Transactions
3. Summarizing and Presenting
4. Interpreting Data

Question 19

The first step when dealing with financial statements

Answer 19

Identifying and Recording Transactions

Question 20

• Groupings transactions by whether they represent income or expenses
• Categorizes transactions within those two groups into subgroups
• Records the expenses according to group and subgroup in the company’s ledger

Answer 20

Sorting and Classifying Transactions

Question 21

• Summarize the information organized, generate graphs or charts as well as putting the information in an easy-to-read format
• Generates financial statements such as the balance sheet or cash flow sheet

Answer 21

Summarizing and Presenting

Question 22

Final step in the financial statement process whether the business can reduce expenses or increase revenues

Answer 22

Interpreting Data

Question 23

Types of Business Organization

Answer 23

1. Single Proprietorship
2. A Partnership
3. A Corporation

Question 24

is a type of business organization the business of which is owned by one person only

Answer 24

Single Proprietorship

Question 25

Owner of Single Propritorship

Answer 25

Proprietor

Question 26

is type of business organization whose business is owned by two or more persons

Answer 26

A Partnership

Question 27

Owners of a Partnership

Answer 27

Partner

Question 28

is a type of business organization, it is organized by at least five persons but not more than fifteen (15)

Answer 28

A Corporation

Question 29

Capital of a Corporation

Answer 29

Capital Stocks

Question 30

Capital stocks divided into units called _____.

Answer 30

shares

Question 31

Owners of a Corporation

Answer 31

Stockholders

Question 32

The Governing Body of a Corporation

Answer 32

Board of Directors