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Accounting Quiz 1
| Question | Answer | |
|---|---|---|
| Describe an ethical dilemma that a student in an introductory accounting course may face | not double checking the work after getting a wrong answer | |
| describe an ethical dilemma that a production supervisor may face | not reporting inconsistencies in the ledgers | |
| describe an ethical dilemma that a salesperson may face | selling for less than recording otherwise | |
| describe an ethical dilemma that a banker may face | theft from bank | |
| describe an ethical dilemma that the Prime Minister may face | Frivolous tax dollar spending then upping the taxes | |
| • How is accounting an information system? | Accounting is an information system that helps w/ the identification, recording & communication 'o' economic events. | |
| who uses the accounting information? | □ Internal ® finance director ® HR personnel ® marketing manager | □ external ® investors ® creditors ® customers ® labor unions |
| § Name two internal users and questions they may ask | □ marketing manager ® how much can we sell this product for to maximize profits? | □ Production manager ® is it more profitable to sell 1 product or the other? |
| § Name two external users and questions they may ask | □ investor ® would it be profitable to invest in this company? | □ Customers will this company continue to exist long enough for me to buy a certain product from |
| who descides wheter the company pays fair wages | labour union | |
| Who decides whether the company can pay its obligations | creditor | |
| who decides whether a marketing proposal will be cost effective | marketing manager | |
| who decides whether a company's net income will permit an increase in drawings | owner | |
| who besides how the company should finance its operations | chief financial officer | |
| Monetary Unit Assumption | transactions are recorded in terms of units of money | |
| Cost Principle | Transactions are recorded based on the actual amount paid/received | |
| Economic Entity Assumption | Accounting for a business excludes any personal transactions of the owner and the transactions of any other entity | |
| Going Concern Assumption | Businesses are expected to continue indefinitely | |
| Partnership | share control: combined skills and resources | |
| Corporation | easy easy to transfer ownership and to raise funds; no personal liability; entity pays income tax | |
| Proprietorship | simple to setup; founder keeps control | |
| Income Trust | easier to transfer ownership and raise funds; no personal liability; unit holders pay income tax | |
| what is the accounting equation | A=oe+l | □ the way of a recording a company's worth |
| ○ Net income § ○ | net income is when revenues are greater than expenses this will increase the owners equity | |
| net loss § | net loss is when expenses are greater than revenues this will decrease the owners equity | |
| ○ Owners equity = ○ | assets -liabilities | |
| owners equity is comprised of § | owners capital (investments ) □ increases § drawings □ decreases § net income/net loss □ revenues ® increases □ minus □ expenses ® decreases | |
| • Why are ethics important in accounting? | § Ethics are important because they prevent people from ripping you off or breaking rules. They work to preserve a mutual respect and coexistence between businesses. |
Created by:
MooshroomsRCool
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