1. Accounting is the cornerstone of any business. The accounting system is designed to collect, document, and report on
financial information
business industry information
financial transactions affecting business
industry trends

2. All accountants use the same set of rules called ----------- to prepare the reports.
Generally Accepted Accounting Principles (GAAP)
General Principles of Accounting (GPA
Principles of General Accounting (PGA)
Acceptable Accounting Practices (AAP)

3. _______________ is something that the business owns that has value.
An expense
An income
A liability
An asset

4. A liability is? ______________
monies that the business owes.
monies spent in order to produce an income
the investment in the business.
monies received from selling a product, providing a service, investing, etc

5. What is a Current Asset?
an asset that can be converted into cash within a six month period
an asset that can be converted into cash within a twelve month period
an asset that cannot be converted into cash.
an asset that cannot be converted into cash easily.

6. What is a Fixed Asset?
an asset that can be converted into cash within a six month period
an asset that can be converted into cash within a twelve month period
an asset that cannot be converted into cash.
an asset that cannot be converted into cash easily.

7. What is an Other Asset?
accounts receivable owed by your customers who have purchased the merchandise on credit.
long-term investments (not intended to be converted to cash in the short-term)
an automobile or truck that is used for the business
an item on the balance sheet that shows the amounts that you owe your creditors

8. What is Capital?
Accrued salaries payable, which is the amount of salaries you owe your employees that you have not paid them yet.
Accounts Payable, which is the amount you owe your creditors for purchases of merchandise or services on account that will be paid within the next twelve months.
The Net Worth of your business.
The Long-Term Debt which is the amount the company owes the bank on a loan that was granted to the company by the bank.

9. The very first step in setting up an accounting system is developing the _______________. Usually some type of numbering system is used for the various accounts.
Chart of Accounts
Income Statement
Balance Sheet
Journal

10. The _______________ reports the net income or net loss earned by a business in a fiscal period.
Chart of Accounts
Income Statement
Balance Sheet
Journal

11. The _______________ reports the final, updated balances of all assets, liabilities, and stockholder's equity accounts as of a specific period.
Chart of Accounts
Income Statement
Balance Sheet
Journal

12. If you were looking at a document that reflected a company's revenue, cost of merchandise sold, gross profit, operating expenses, operating income, and net income, you are most likely looking at the _______________.
Chart of Accounts
Income Statement
Balance Sheet
Journal

13. If you were looking at a document that reflected a company's assets, liabilities, stockholders' equity, and total liabilities and stockholders' equity, you are most likely looking at the _______________.
Chart of Accounts
Income Statement
Balance Sheet
Journal

14. A Purchase Order
is used to control the company's money and how it is spent; they are used to control the ordering process for companies.
is synonymous to an Invoice.
keeps track of personal orders.
should be limited in their use.

15. The income tax withholding system was set up to prevent people from owing the government large amounts of money on tax day.
True
False

Accounting Curriculum Test

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