Accounting 200 Exam 1 Complete Question And Answers 100% Correct.

account payable - correct answer a liability backed by the general reputation and credit standing at the debtor. accounting - correct answer the information system that measures business activities, processes that information into reports and financial statements, and communicates the results to decision makers. accounting equation - correct answer assets=liabilities+owners equity asset - correct answer an economic resource that is expected to be of benefit in the future. balance sheet - correct answer list of an entity's assets, liabilities, and owner's equity as of a specific date. also called the statement of financial position. board of directors - correct answer group elected by the stockholders to set policy for a corporation and to appoint its officers. capital - correct answer another name for the owner's equity of a business cash - correct answer money and any medium of exchange that a bank accepts at face value. common stock - correct answer the most basic form of capital stock. continuity (going concern) assumption - correct answer holds that the entity will remain in operation for the foreseeable future. corporation - correct answer a business owned by stockholders. It is a legal entity, an "artificial person" in the eyes of the law. current asset - correct answer an asset that is expected to be converted to cash, sold, or consumed during the next 12 months or within the business's normal operating cycle if longer than a year. current liability - correct answer a debt due to be paid within one year or within the entity's operating cycle if the cycle is longer than a year. deficit - correct answer negative balance in retained earnings caused by net losses over a period of years. dividends - correct answer distributions (usually cash) by a corporation to its stockholders. entity - correct answer an organization or a section of an organization that, for accounting purposes, stands apart from other organizations and individuals as a separate economic unit. expenses - correct answer decrease in retained earnings that results from operations; the cost of doing business;opposite of revenues. fair value - correct answer the amount that a business could sell an asses for, or the amount that a business could pay to settle a liability. financial accounting - correct answer the branch of accounting that provides information to people outside the firm. financial statements - correct answer business documents that report financial information about a business entity to decision makers. financial activities - correct answer activities that obtain from investors and creditors the cash needed to launch and sustain the business; a section of the statement of cash flows. fixed assets and plant assets - correct answer other names for property, plant, and equipment. GAAP - correct answer accounting guidelines, formulated by the Financial Standards Board, that govern how accounting is practiced. historical cost principle - correct answer principle that states that assets and services should be recorded at their actual cost. income statement - correct answer a financial statement listing an entity's revenues, expenses, and net income or net loss for a specific period. Also called the statement of operations. IFRS - correct answer accounting guidelines, formulated by the international accounting standards board. investing activities - correct answer activities that increase or decrease the long-term assets available to the business; a section of the statement of cash flows. liability - correct answer an economic obligation (debt) payable to an individual or an organization outside the business. limited liability company - correct answer a business organization in which the business (not the owner) is liable for the company's debts. long term debt - correct answer a liability that falls due beyond one year form the date of the financial statements. management accounting - correct answer the branch of accounting that generates information for the internal decision makers of a business, such as top executives. merchandise inventory - correct answer the merchandise that a company sells to customers, also called inventory. net earnings and net profit - correct answer other names for net income. net income - correct answer excess of total revenues over total expenses. Also called net earnings or net profit. net loss - correct answer excess of total expenses over total revenues. note payable - correct answer a liability evidenced by a written promise to make a future payment. operating activities - correct answer activities that create revenue or expense in the entity's major line of business; a section of the statement of cash flows. operating activities affect the income statement. owner's equity - correct answer the claim of the owners of a business to the assets of the business. Also called capital, stockholder's equity, or net assets. paid in capital - correct answer the amount of stockholder's equity that stockholders have contributed to the corporation. Also called contributed capital. partnership - correct answer an association of two or more persons who co-own a business for profit. property, plant, and equipment - correct answer long-lived assets, such as land, building, and equipment, used in the operation of the business. Also called plant assets or fixed assets. proprietorship - correct answer a business with a single owner. retained earnings - correct answer the amount of stockholder's equity that the corporation has earned through profitable operation and has not given back to stockholders.