Horngren's Accounting Chapter 1 Questions And Answers
2025/2026
Accounting - CORRECT ANSWER-The Information system that
measures business activities,
processes the information into reports and
communicate the results
to decision makers
Financial Accounting - CORRECT ANSWER-The field of Accounting that focuses on providing
information for internal decision makers
Managerial Accounting - CORRECT ANSWER-the Field of accounting that focuses on providing
information for internal decision makers
Creditor - CORRECT ANSWER-Any Person or business to whom a business owes money.
Certified Public Accountants (CPAs) - CORRECT ANSWER-Licensed professional accountants who
serve the general public.
Certified Management Accountants (CMAs) - CORRECT ANSWER-Certified professionals who
specialize in accounting and financial management knowledge. They typically work for a single
company.
What Does an accountant do? - CORRECT ANSWER-RecordKeeping/ BookKeeping
, Investigate Financial Evidence
Develop computer programs to process account info
Communicate financial results to interested parties
Financial Accounting Standards Board (FASB) - CORRECT ANSWER-The private organization that
oversees the creation and governance of accounting standards in the US
Securities and Exchange Commision (SEC) - CORRECT ANSWER-US governmental agency that
oversees the US financial markets
Generally Accepted Accounting Principles (GAAP) - CORRECT ANSWER-Accounting Guidelines,
currently formulated by the FASB
Economic Entity Assumption - CORRECT ANSWER-An organization that stands apart as a
separate economic unit
Cost Principle - CORRECT ANSWER-A Principle that states that acquired assets and services
should be recorded at their actual cost
Sole Proprietorship - CORRECT ANSWER-A business with two or more owners not being
organized as a corporation.
Partnership - CORRECT ANSWER-A business with two or more owners and not organized as a
corporation.
Corporation - CORRECT ANSWER-A Business organized under state law that is a separate legal
entity.
2025/2026
Accounting - CORRECT ANSWER-The Information system that
measures business activities,
processes the information into reports and
communicate the results
to decision makers
Financial Accounting - CORRECT ANSWER-The field of Accounting that focuses on providing
information for internal decision makers
Managerial Accounting - CORRECT ANSWER-the Field of accounting that focuses on providing
information for internal decision makers
Creditor - CORRECT ANSWER-Any Person or business to whom a business owes money.
Certified Public Accountants (CPAs) - CORRECT ANSWER-Licensed professional accountants who
serve the general public.
Certified Management Accountants (CMAs) - CORRECT ANSWER-Certified professionals who
specialize in accounting and financial management knowledge. They typically work for a single
company.
What Does an accountant do? - CORRECT ANSWER-RecordKeeping/ BookKeeping
, Investigate Financial Evidence
Develop computer programs to process account info
Communicate financial results to interested parties
Financial Accounting Standards Board (FASB) - CORRECT ANSWER-The private organization that
oversees the creation and governance of accounting standards in the US
Securities and Exchange Commision (SEC) - CORRECT ANSWER-US governmental agency that
oversees the US financial markets
Generally Accepted Accounting Principles (GAAP) - CORRECT ANSWER-Accounting Guidelines,
currently formulated by the FASB
Economic Entity Assumption - CORRECT ANSWER-An organization that stands apart as a
separate economic unit
Cost Principle - CORRECT ANSWER-A Principle that states that acquired assets and services
should be recorded at their actual cost
Sole Proprietorship - CORRECT ANSWER-A business with two or more owners not being
organized as a corporation.
Partnership - CORRECT ANSWER-A business with two or more owners and not organized as a
corporation.
Corporation - CORRECT ANSWER-A Business organized under state law that is a separate legal
entity.
