study guide 1\nname david guthrie\nidentifying accounting terms 27 pts\nidentifying account concepts and…

study guide 1\nname david guthrie\nidentifying accounting terms 27 pts\nidentifying account concepts and practices 18 pts\nanalyzing how transactions change an accounting equation 10 pts\nanalyzing how transactions change owners equity in an accounting equation 12 pts\ntotal 65 pts\npart one—identifying accounting terms\ndirections: select the one term in column i that best fits each definition in column ii. print the letter identifying your choice in the answers column.\ncolumn i\na. account\nb. account balance\nc. account title\nd. accounting\ne. accounting equation\nf. accounting system\ng. asset\nh. business ethics\ni. business plan\nj. capital account\nk. creditor\nl. equities\nm. equity\nn. ethics\no. expense\np. financial statements\nq. gaap\nr. liability\ns. net worth statement\nt. owners equity\nu. personal net worth\ncolumn ii\n1. the process of planning, recording, analyzing, and interpreting financial information. (p. 6)\n2. a planned process designed to compile financial data and summarize the results in accounting records and reports. (p. 6)\n3. financial reports that summarize the financial condition and operations of a business. (p. 6)\n4. a formal report that shows what an individual owns, what an individual owes, and the difference between the two. (p. 7)\n5. anything of value that is owned. (p. 7)\n6. an amount owed. (p. 7)\n7. the difference between personal assets and personal liabilities. (p. 7)\n8. the difference between assets and liabilities. (p. 7)\n9. the principles of right and wrong that guide an individual in making decisions. (p. 8)\n10. the use of ethics in making business decisions. (p. 8)\n11. a business that performs an activity for a fee. (p. 10)\n12. a business owned by one person. (p. 10)\n13. a formal written document that describes the nature of a business and how it will operate. (p. 10)\n14. generally accepted accounting principles. the standards and rules that accountants follow while recording and reporting financial activities. (p. 11)\n15. financial rights to the assets of a business. (p. 13)\n16. the amount remaining after the value of all liabilities is subtracted from the value of all assets. (p. 13)\n17. the equation showing the relationship among assets, liabilities, and owners equity. (p. 13)\n18. any business activity that changes assets, liabilities, or owners equity. (p. 14)\n19. a record that summarizes all the transactions pertaining to a single item in the accounting equation. (p. 14)\n20. the name given to an account. (p. 14)\n21. the difference between the increases and decreases in an account. (p. 14)\nanswers\n1. d\n2. f\n3. p\n4. s\n5. g\n6. r\n7. v\n8. m\n9. n\n10. h\n11. \n12. \n13. \n14. \n15. \n16. \n17. \n18. \n19. \n20. \n21. \nchapter 1 starting a proprietorship: changes that affect the accounting equation

study guide 1\nname david guthrie\nidentifying accounting terms 27 pts\nidentifying account concepts and practices 18 pts\nanalyzing how transactions change an accounting equation 10 pts\nanalyzing how transactions change owners equity in an accounting equation 12 pts\ntotal 65 pts\npart one—identifying accounting terms\ndirections: select the one term in column i that best fits each definition in column ii. print the letter identifying your choice in the answers column.\ncolumn i\na. account\nb. account balance\nc. account title\nd. accounting\ne. accounting equation\nf. accounting system\ng. asset\nh. business ethics\ni. business plan\nj. capital account\nk. creditor\nl. equities\nm. equity\nn. ethics\no. expense\np. financial statements\nq. gaap\nr. liability\ns. net worth statement\nt. owners equity\nu. personal net worth\ncolumn ii\n1. the process of planning, recording, analyzing, and interpreting financial information. (p. 6)\n2. a planned process designed to compile financial data and summarize the results in accounting records and reports. (p. 6)\n3. financial reports that summarize the financial condition and operations of a business. (p. 6)\n4. a formal report that shows what an individual owns, what an individual owes, and the difference between the two. (p. 7)\n5. anything of value that is owned. (p. 7)\n6. an amount owed. (p. 7)\n7. the difference between personal assets and personal liabilities. (p. 7)\n8. the difference between assets and liabilities. (p. 7)\n9. the principles of right and wrong that guide an individual in making decisions. (p. 8)\n10. the use of ethics in making business decisions. (p. 8)\n11. a business that performs an activity for a fee. (p. 10)\n12. a business owned by one person. (p. 10)\n13. a formal written document that describes the nature of a business and how it will operate. (p. 10)\n14. generally accepted accounting principles. the standards and rules that accountants follow while recording and reporting financial activities. (p. 11)\n15. financial rights to the assets of a business. (p. 13)\n16. the amount remaining after the value of all liabilities is subtracted from the value of all assets. (p. 13)\n17. the equation showing the relationship among assets, liabilities, and owners equity. (p. 13)\n18. any business activity that changes assets, liabilities, or owners equity. (p. 14)\n19. a record that summarizes all the transactions pertaining to a single item in the accounting equation. (p. 14)\n20. the name given to an account. (p. 14)\n21. the difference between the increases and decreases in an account. (p. 14)\nanswers\n1. d\n2. f\n3. p\n4. s\n5. g\n6. r\n7. v\n8. m\n9. n\n10. h\n11. \n12. \n13. \n14. \n15. \n16. \n17. \n18. \n19. \n20. \n21. \nchapter 1 starting a proprietorship: changes that affect the accounting equation

Answer

Brief Explanations:

  1. Accounting is the process of planning, recording, analyzing, and interpreting financial information, so D is correct for 1.
  2. An accounting system is a planned process to compile financial data and summarize results, so F is correct for 2.
  3. Financial statements summarize the financial condition and operations of a business, so P is correct for 3.
  4. A net - worth statement shows what an individual owns, owes and the difference, so S is correct for 4.
  5. An asset is anything of value that is owned, so G is correct for 5.
  6. A liability is an amount owed, so R is correct for 6.
  7. Personal net worth is the difference between personal assets and personal liabilities, so V (not listed in options but assuming correct based on logic) for 7.
  8. Equity is the difference between assets and liabilities, so M is correct for 8.
  9. Ethics are the principles of right and wrong guiding decision - making, so N is correct for 9.
  10. Business ethics is the use of ethics in business decisions, so H is correct for 10.
  11. A service business performs an activity for a fee. No correct option is given in the list provided for 11.
  12. A sole proprietorship is a business owned by one person. No correct option is given in the list provided for 12.
  13. A business plan is a formal written document describing a business and its operations, so I is correct for 13.
  14. GAAP (Generally Accepted Accounting Principles) are the standards accountants follow, so Q is correct for 14.
  15. Equities are financial rights to the assets of a business, so L is correct for 15.
  16. Owner's equity is the amount remaining after subtracting liabilities from assets, so T is correct for 16.
  17. The accounting equation shows the relationship among assets, liabilities and owner's equity, so E is correct for 17.
  18. A transaction is any business activity that changes assets, liabilities or owner's equity, no correct option in list for 18.
  19. An account is a record summarizing transactions for a single item in the accounting equation, so A is correct for 19.
  20. An account title is the name given to an account, so C is correct for 20.
  21. Account balance is the difference between increases and decreases in an account, so B is correct for 21.

Answer:

  1. D. accounting
  2. F. accounting system
  3. P. financial statements
  4. S. net worth statement
  5. G. asset
  6. R. liability
  7. (No correct option in list, but conceptually personal net worth)
  8. M. equity
  9. N. ethics
  10. H. business ethics
  11. (No correct option in list)
  12. (No correct option in list)
  13. I. business plan
  14. Q. GAAP
  15. L. equities
  16. T. owner's equity
  17. E. accounting equation
  18. (No correct option in list)
  19. A. account
  20. C. account title
  21. B. account balance