Business 100 Module 13 Test

BUS 100 Module 13 Test Questions

Fall 2013

1. Accounting is often called “the language of business” because it ______________ financial information to the stakeholders of the company.

b. communicates

2. Accounting is defined as the process of _________________.

d. all the above defines accounting

3. ___________________ plays a key role in helping managers carry out their responsibilities.

c. Management accounting

4. Companies outside the U.S. follow the ____________________ set of accounting principles instead of the generally accepted accounting principles that the U.S. follows.

b. International Financial Reporting Standards

5. ___________________ are report cards for business owners and managers.

c. Financial statements

6. ___________________ are being held accountable for the financial statements issued by the people who report to them.

a. Top managers

7. Income statement, balance sheet, statement of owner’s equity and statement of cash flows are all _____________________.

c. financial statements

8. The net income or profit of a business is also referred to as the _________________.

c. gross margin

9. To ___________________, a company’s total sales revenue must exactly equal all the expenses, both variable and fixed.

b. break even

10. The ________________ reports assets, liabilities, and owner’s equity information at a specific point in time.

d. balance sheet

11. Assets = liabilities + owner’s equity is referred to as the _______________.

a. accounting equation

12. The _________________ details changes in owner’s equity for the reporting period.

c. statement of owner’s equity

13. __________________ is a system of accounting in which the accountant records a transaction when it occurs without waiting until cash is paid out or received.

b. Accrual accounting

14. A basic principle of accrual accounting is _________________________.

d. an expense is recognized on the income statement when it’s incurred...