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- Explain how the accounting equation organizes financial information using T-accounts and debits and credits.Which of the following statements is true? Under cash-basis accounting, revenues are recorded when a company satisfies its performance obligations and expenses are recorded when incurred. Accrual-basis accounting records both cash and noncash transactions when they occur. Generally accepted accounting principles require companies to use cash-basis accounting. The key elements of accrual-basis accounting are the revenue recognition principle, the expense recognition principle, and the historical cost principle.What is the accounting equation? List two examples of business transactions, and explain how the accounting equation would be impacted by these transactions.
- The matching principle in accounting requires the matching of debits and credits.Which of the following is the principle that a business must report any business activities that could affect what is reported on the financial statements? A. revenue recognition principle B. expense recognition (matching) principle C. cost principle D. full disclosure principleThat a business may only report activities on financial statements that are specifically related to company operations, not those activities that affect the owner personally, is known as which of the following? A. separate entity concept B. monetary measurement concept C. going concern assumption D. time period assumption
- List the classification of each of the following accounts as A (asset), L (liability), OE (owners equity), R (revenue), or E (expense). Write Debit or Credit to indicate the increase side, the decrease side, and the normal balance side. PART 1: The Accounting Cycle for a Service Business: Analyzing Business TransactionsDefine the measurement principle. Select one: a. Requirement that accounting records should all be reported in a single currency. O b. Assumption that a business will continue to operate into the foreseeable future. O c. Accounting for purchases must be at their original cost. d. Transactions should be recorded on the basis of objective evidence where different people looking at the evidence would all arrive at the same conclusion.Which is the last step of accounting as a process of information? Select one: a. Recording the transaction b. Preparation of financial statement c. Communication of information d. Analysis and interpretation of information Which of the following is not a part of the functions of the accounting system? Select one: a. Reporting the results of operations during a reporting period b. Classifying and summarizing the effects of the transactions on the accounting elements c. Analyzing and recording the business transactions of the enterprise. d. Preparing financial statements that are favorable to the data-users. The chief accounting officer of a medium-sized or large business enterprise. Select one: a. Auditor b. Controller c. Bookkeeper d. Treasurer
- The basic function of financial accounting is to Select one: a. Interpret financial data b. Record all business transactions c. No correct answer d. Assist the management in performing functions effectively Accounting is also defined as an "Information System" because? Select one: a. The function of accounting is to provide quantitative information, primarily financial in nature about economic entities. b. All of the answers are correct c. Accounting provides required information for anyone seeking it d. It is a system which provide information Public accounting, as a sub-discipline of accounting, includes: Select one: a. Internal auditing b. Management accounting c. Management advisory services d. Cost accounting1. When did the business call accountable? 1. Business Activities are accountable when they are called business Transactions and events when they affect the assets, liabilities and owner's equity 2. Accounting elements of Accounting values are classified into two categories namely external Transactions and internal Transactions. 3.External Transactions involves exchanges of economic resources by a business enterprise with another business enterprise ex.selling of services, and commodities to customers,payment of accounts to suppliers, payment of store or office rents etc. 4. Internal Transactions are Transactions or events that happened or take place within the business enterprise only . Ex. conversion of raw materials into finished product, unanticipated loss from fire and food, or any calamities affecting enterprise. A. 1-2 only B. 1-2-3 C. 1-2-3-4 D. 3-4 2. What can you say about exchanges of equal monetary values? 1. For every value received, another value is given away as an…Which of the following statements about users of accounting information is correct? a. Management is an external user. b. Taxing authorities are internal users. c. Present creditors are external users. d. Regulatory authorities are internal users. 2. Performing services for cash will have the following effects on the components of the basic accounting equation: a. increase assets and decrease owner’s equity. b. increase assets and increase owner’s equity. c. increase assets and increase liabilities. d. increase liabilities and increase owner’s equity. 3. Which of the following events is recorded in the accounting records? a. Equipment is purchased on account. b. An employee is terminated. c. A proposal to diversify investment in the business. d. The manager is hired for a salary of $ 3,000 per month.