Chapter 1 // Introduction to Accounting and Business UPDATED ACTUAL
Questions and CORRECT Answers
~Nature of Business and Accounting~ Business
A ______ is an organization in which basic
resources (inputs), such as materials and
labor, are assembled and processed to
provide goods or services (outputs) to
customers.
What is the objective of most businesses? To earn a profit
A ______ is the difference between the Profit
amounts received from customers for
goods or services and the amounts paid
for the inputs used to provide the goods or
services.
~Service Businesses
~Types of Businesses~
~Merchandising Businesses
Three types of businesses operating for
profit include __________, __________, and _______ _.
~Manufacturing Businesses
______ provide services rather than Service Businesses
products to customers.
~Delta Air Lines (transportation services)
Examples of service businesses are __________
and _____ _.
~The Walt Disney Company (entertainment services)
______ sell products they purchase from Merchandising Businesses
other businesses to customers.
, ~Wal-Mart (general merchandise)
Examples of merchandising businesses are
__________ and ______ _.
~Amazon (Internet books, music, videos)
______ convert basic inputs into products Manufacturing Businesses
that are sold to customers.
~Fort Motor Co. (cars, trucks, vans)
Examples of manufacturing businesses are
__________ and ______ _.
~Dell Inc. (personal computers)
~Role of Accounting in Business~ The role of accounting in business is to provide information for managers to use in
operating the business. In addition, accounting provides information to other users in
What is the role of accounting in business? assessing the economic performance and condition of the business.
______ is an information system that Accounting
provides reports to users about the
economic activities and condition of a
business.
Why is accounting considered the Accounting is the means by which businesses' financial information is communicated
"language of business." to users.
~Identify users.
~Assess users' information needs.
What is the process by which accounting
~Design the accounting information system to meet users' needs.
provides information to users?
~Record economic data about business activities and events.
~Prepare accounting reports for users.
~Internal Users (managers and employees)
Users of accounting information can be
divided into two groups ______ and
~External Users (investors, creditors, customers,
__________.
and the government)
The area of accounting that provides Managerial Accounting
internal users with information is called (Management Accounting)
__________.
What is the objective of managerial To provide relevant and timely information for managers' and employees' decision-
accounting? making needs
Managerial accountants employed by a Private Accounting
business are employed in____ _.
The area of accounting that provides Financial Accounting
external users with information is called
__________.
What is the objective of financial To provide relevant and timely information for the decision-making needs of users
accounting? outside the business
______ are one type of financial General-Purpose Financial Statements
accounting report that is distributed to
external users.
The term "general-purpose" refers to the
wide range of decision-making needs that
these reports are designed to serve.
Questions and CORRECT Answers
~Nature of Business and Accounting~ Business
A ______ is an organization in which basic
resources (inputs), such as materials and
labor, are assembled and processed to
provide goods or services (outputs) to
customers.
What is the objective of most businesses? To earn a profit
A ______ is the difference between the Profit
amounts received from customers for
goods or services and the amounts paid
for the inputs used to provide the goods or
services.
~Service Businesses
~Types of Businesses~
~Merchandising Businesses
Three types of businesses operating for
profit include __________, __________, and _______ _.
~Manufacturing Businesses
______ provide services rather than Service Businesses
products to customers.
~Delta Air Lines (transportation services)
Examples of service businesses are __________
and _____ _.
~The Walt Disney Company (entertainment services)
______ sell products they purchase from Merchandising Businesses
other businesses to customers.
, ~Wal-Mart (general merchandise)
Examples of merchandising businesses are
__________ and ______ _.
~Amazon (Internet books, music, videos)
______ convert basic inputs into products Manufacturing Businesses
that are sold to customers.
~Fort Motor Co. (cars, trucks, vans)
Examples of manufacturing businesses are
__________ and ______ _.
~Dell Inc. (personal computers)
~Role of Accounting in Business~ The role of accounting in business is to provide information for managers to use in
operating the business. In addition, accounting provides information to other users in
What is the role of accounting in business? assessing the economic performance and condition of the business.
______ is an information system that Accounting
provides reports to users about the
economic activities and condition of a
business.
Why is accounting considered the Accounting is the means by which businesses' financial information is communicated
"language of business." to users.
~Identify users.
~Assess users' information needs.
What is the process by which accounting
~Design the accounting information system to meet users' needs.
provides information to users?
~Record economic data about business activities and events.
~Prepare accounting reports for users.
~Internal Users (managers and employees)
Users of accounting information can be
divided into two groups ______ and
~External Users (investors, creditors, customers,
__________.
and the government)
The area of accounting that provides Managerial Accounting
internal users with information is called (Management Accounting)
__________.
What is the objective of managerial To provide relevant and timely information for managers' and employees' decision-
accounting? making needs
Managerial accountants employed by a Private Accounting
business are employed in____ _.
The area of accounting that provides Financial Accounting
external users with information is called
__________.
What is the objective of financial To provide relevant and timely information for the decision-making needs of users
accounting? outside the business
______ are one type of financial General-Purpose Financial Statements
accounting report that is distributed to
external users.
The term "general-purpose" refers to the
wide range of decision-making needs that
these reports are designed to serve.
