POB Accounting

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The process of keeping the financial records of a business is known as

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accounting.

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The overall purpose of accounting is to

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control the finances of the business.

Front

Why are accurate accounting records important to a business?

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They show the business how it is doing.

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Which of the following groups makes regular use of a business’s managerial accounting information: Managers, Customers, Creditors, Investors

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Managers

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A creditor is most likely to examine a business’s financial accounting records if the business is applying for a bank loan.

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applying for a bank loan.

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Riley is an employee of the federal government who studies the financial reports of major businesses in a specific industry. The government’s purpose in assigning this task to Riley is to

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identify trends in the industry.

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For an accounting system to be useful to the business, the accounting information it contains must be

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accurate and up to date.

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Which of the following is a requirement for a good accounting system: It should be updated annually. It should provide needed information quickly. It should eliminate the need for an accountant. It should be replaced every two or three years.

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It should provide needed information quickly.

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What did the computerized accounting system lack that allowed two employees to steal $50,000?

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Protection from theft and fraud

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Checks, receipts, invoices, and purchase orders are examples of

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source documents.