FABM1 Chapter Test 1

During which historical period did the development of accounting theory begin?

• The Beginning of Civilization
• The Industrial Revolution
• The French Revolution
• The Present

How does accounting help protect a business owner's properties?

• By providing information about assets and liabilities
• By securing physical assets
• By preventing theft
• By insuring the business

In which century did double-entry bookkeeping become prominent?

• 14th Century
• 19th Century
• 18th Century
• 20th Century

What accounting term is used for the process of grouping similar transactions together?

• Posting
• Journalizing
• Recording
• Summarizing

What are books of original entry also known as?

• Financial statements
• Ledgers
• Journals
• Worksheets

What aspect of accounting became important during the Industrial Revolution?

• Recording daily activities
• Mass production and fixed assets
• Communication of financial results
• Analyzing financial data

What aspect of accounting makes it the "language of business"?

• Its use of complex terminology
• Its requirement for professional certification
• Its ability to help users understand business activities
• Its emphasis on creative expression

What century saw the development of double-entry bookkeeping?

• 10th Century
• 14th Century
• 18th Century
• 20th Century

What does accounting provide information on, making it an information system?

• Profitability and liquidity
• Sales and marketing
• Employee performance
• Customer satisfaction

What does analyzing in accounting involve?

• Presenting financial information
• Establishing relationships between financial items
• Recording transactions
• Preparing trial balance