FINANCIAL ACCOUNTING MCGRAW-HILL CHAPTER 1 TEST QUESTIONS AND ANSWERS

FINANCIAL ACCOUNTING MCGRAW-HILL TEST 1
RECENTLY UPDATED




accounting - ANSWER an information system designed by an organization to
capture analyze record and summarize the activities affecting its financial
condition and performance.

sole proprietorship - ANSWER owned by 1 - easiest

partnership - ANSWER owner by 2 profits are split, have to pay for lawyer

coporation - ANSWER separate entity from both legal and accounting
perspectives. Buy and sell stock

assets - ANSWER = liabilities + equity

what a company owns - ANSWER must equal what a company owes to its
creditors and stock holders

expenses - ANSWER are cost of business to help make revenue

revenues - ANSWER earned by selling goods or services to customers

liabilities - ANSWER something we owe - payable

assets - ANSWER presently controlled by the company, measurable value

accounting transaction - ANSWER direct and measurable effect on assets
liabilities or stock holders equity

1st step - ANSWER post transactions

2nd step - ANSWER trial balance

3rd step - ANSWER income statement