ACCOUNTING 1 PRELIM

This is the fundamental concept in accounting that represents the relationship between a company’s assets, liabilities and equity.

• balance sheet
• cash flow statement
• income statement
• accounting equation

These are the economic resources owned and controlled by the business.

• liabilities
• revenue
• expenses
• assets

The business paid its Meralco and Maynilad bill. What account should be debited?

• Utilities expense

• Cash
• Accounts Receivable
• Inventory

It is obtained when the amount you receive is more than the amount you paid for the goods or services you sold.

• profit
• expense
• revenue
• loss

This involves the preparation of the formal accounting reports or financial statements at the end of the accounting period.

• financial reporting
• summarizing

• auditing
• bookkeeping

A form of business which owned by single proprietor.

• partnership
• corporation
• limited liability company
• single / sole proprietorship

This involves the acquisition of properties such as land, furniture, machineries and equipment.

• asset acquisition
• investing activities

• resource acquisition
• property acquisition

The analysis of financial statements by developing financial ratios and explaining their significance to make the statement meaningful.

• financial ratio analysis
• financial statement evaluation
• interpreting

• financial statement analysis

This is the element of uncertainty in an outcome.

• probability
• chance
• certainty
• risk

Statement of earnings report which describes how business operated or produced wealth over a given period.

• income statement
• profit and loss statement
• cash flow statement
• financial performance