Accounting Questions and Graded Answers.
Basic Accounting Equation - The relationship between income, expenses, and the
ownership of the company; Assets = Liabilities + Owners Equity
Financial Statements - Accounting reports compiled necessary for the fair evaluation of
operations of an entity i.e. the balance sheet, income statement, and the cash-flow statement
Asset - Something valuable that an entity owns, benefits from, or has use of, in generating
income.
Liability - Accounts and wages payable, accrued rent and taxes, trade debt, and short and
long-term loans.
Accounts Payable - Unpaid bills. Accounts that are owed to suppliers as distinguished
from accrued interest, rent, salaries, taxes, and other such accounts
Accounts Receivable - Sales made but not paid-for by the customer.
Fixed Costs - A periodic cost that remains more or less unchanged irrespective of the
output level or sales revenue, such as depreciation, insurance, interest, rent, salaries, and wages
Variable Costs - A periodic cost that varies in step with the output or the sales revenue of
a company.
CPA - Certified Public Accountant. An individual who has passed the uniform
examination administered by the American Institute of Certified Public Accountants, and who
has received state certification to practice accounting.
Basic Accounting Equation - The relationship between income, expenses, and the
ownership of the company; Assets = Liabilities + Owners Equity
Financial Statements - Accounting reports compiled necessary for the fair evaluation of
operations of an entity i.e. the balance sheet, income statement, and the cash-flow statement
Asset - Something valuable that an entity owns, benefits from, or has use of, in generating
income.
Liability - Accounts and wages payable, accrued rent and taxes, trade debt, and short and
long-term loans.
Accounts Payable - Unpaid bills. Accounts that are owed to suppliers as distinguished
from accrued interest, rent, salaries, taxes, and other such accounts
Accounts Receivable - Sales made but not paid-for by the customer.
Fixed Costs - A periodic cost that remains more or less unchanged irrespective of the
output level or sales revenue, such as depreciation, insurance, interest, rent, salaries, and wages
Variable Costs - A periodic cost that varies in step with the output or the sales revenue of
a company.
CPA - Certified Public Accountant. An individual who has passed the uniform
examination administered by the American Institute of Certified Public Accountants, and who
has received state certification to practice accounting.
