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Accounting Chapter 1: Starting a Proprietorship Flashcards | StudBud
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Accounting Chapter 1: Starting a Proprietorship
Accounting Chapter 1: Starting a Proprietorship
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Century 21 Accounting Multicolumn Journal 10e Chapter 1 Starting a Proprietorship
Flashcards
41 cards
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Practice quiz
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Questions
41
Answers
1
The most common type of withdrawal by an owner from a business is the withdrawal of cash.
false
true
2
The difference between assets and liabilities
equity
personal net worth
owner's equity
assets
3
Withdrawals are assets taken out of a business for the owner's personal use.
true
false
4
An amount owed by a business
liability
asset
equity
debt
5
A person or business to whom a liability is owed
accountant
business receivable
creditor
business payable
6
A negative amount of net worth reflects more debt than assets, something creditors would favor.
false
true
7
The name given to an account
title
account title
8
A record summarizing all the information pertaining to a single item in the accounting equation
financial statement
equity
business plan
account
9
Business ethics are the principles of right & wrong that guide an individual in makin decisions
true
false
10
Financial reports that summarize the financial conditions and operations of business
financial statements
entrepreneur reports
proprietor's statements
business reports
11
When two asset accounts are changed in a transaction, there must be an increase and a decrease.
false
true
12
A transaction for the sale of goods or services results in a decrease in owner's equity.
true
false
13
When withdrawsing cash from a business, the transaction affects both assets and owner's equity.
true
false
14
The account used to summarize the owner's equity in the business is the
account title
equities
capital account
account balance
15
The amount in an account
account
revenaccount title
accounting system
account balance
16
Anything of value that is owned
liability
espense
asset
17
A planned process for providing financial information that will be useful to management is a(n)
business plan
asset
ethic
accounting system
18
A sale for which cash will be received at a later date
expense
transaction
sale on account
withdrawal
19
Planning, recording, analyzing, and interpreting financial information is
a waste of time
accounting
not important
liability
20
The standards & rules accountants follow while recording & reporting financial activities are
service businesses
GAAP
ethics
equities
21
An expense is a decrease in owner's equity resulting from the operation of a business.
false
true
22
The accounting equation is most often stated as Assets + Liabilities = Owner's Equity.
false
true
23
A business owned by one person
proprietorship
entrepreneurship
24
A formal report showing what an individual owns, owes, and the difference between the two is a
net worth statement
business plan
financial statement
equity
25
The amount remaining after the value of liabilities is subtracted from the value of assets
owner's equity
equity
equities
expenses
26
A business activity that changes assets, liabilities, or owner's equity is called a(n)
liability
equity
transaction
purchase
27
An increase in owner's equity resulting from the operation of a business
revenue
cash
asset
28
Payments for advertising, equipment repairs, utilities, and rent are liabilities.
false
true
29
Financial rights to the assets of a business
equity
business title
business ethics
equities
30
The use of ethics in making business decisions
liability
ethics
equity
business ethics
31
An equation showing the relationship among assets, liabilities, and owner's equity is a(n)
simple equation
accounting equation
complex equation
unbalanced equation
32
When items are bought & paid for at a future date, these items are bought on account.
true
false
33
The principles of right and wrong that guide an individual in making decisions
common sense
business bible
business ethics
ethics
34
A withdrawal is an expense.
false
true
35
The difference between personal assets and personal liabilities
equity
personal net worth
net worth
owner's equity
36
After each transaction, the accounting equation must remain in balance.
false
true
37
Detailed info about changes in Own Equ is needed by owners to make sound business decisions.
true
false
38
A decrease in owner's equity resulting from the operation of a business
expense
service charge
business charge
39
A business that performs an activity for a fee
financial business
proprietorship
dog business
service business
40
Assets taken out of a business for the owner's personal use
equities
withdrawals
transactions
ethics
41
A formal written document that describes the nature of a business and how it will operate
proprietorship
account title
business plan
financial statement
