Accounting Ch1

What is the process of planning, recording, analyzing, and interpreting financial information?

• Account

• Accounting

• Asset

• Liability

Which term refers to financial reports that summarize the financial condition and operations of a business?

• Business Plan

• Financial Statements

• Net Worth Statement

• Owner’s Equity

What is the term for anything of value that is owned?

• Asset

• Liability

• Expense

• Equity

What is the difference between personal assets and personal liabilities called?

• Owner’s Equity

• Personal Net Worth

• Capital Account

• Business Ethics

What is the formal written document that describes the nature of a business and how it will operate?

• Business Plan

• Financial Statement

• Accounting Equation

• Net Worth Statement

Accounting is the language of business.

• True

• False

A creditor would favor a positive net worth.

• True

• False

The principles of right and wrong that guide an individual in making personal decisions is called business ethics.

• True

• False

Keeping personal and business records separate is an application of the business entity concept.

• True

• False

Generally Accepted Accounting Principles, GAAP, allows for flexibility in reporting.

• True

• False