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Accounting Chapter 1 Notes

Accounting Chapter 1 Notes - Chapter 1 Notes QUIZ BOWL...

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Chapter 1: Notes QUIZ BOWL QUESTIONS: 1) The Most: 70% of US businesses are organized as sole proprietorships. 2) In the accounting equation, the interests of the stockholders are represented by the term “stockholder’s equity”. 3) Financial Statements consist of the: BALANCE SHEET, STATEMENT OF CASH FLOWS, INCOME STATEMENT and RETAINED EARNINGS STATEMENT. 4) When cash is spent to purchase a long-term asset: a) The cash account decreases and b) The long-term asset account increases. *Stockholder’s Equity and Liability accounts are not affected. 5) Profit is the difference between: a) The amount of assets received for goods and services and b) The costs to provide the goods and services. 6) In the accounting equation, the interests of the creditors are represented by the term “liabilities” 7) A Balance Sheet lists the assets, liabilities, and stockholders’ equity as of a specific date, usually at the close of the last day, of a month, or a year. 8) Business transactions are events that cause change in assets, liabilities, and stockholders’ equity; a change in credit rating does not affect them. 9) Public accountants who meet the necessary educational, examination and experience requirements can become certified public accountants (CPAs). Once in practice, CPAs must adhere to standards of ethical conduct and attend continuing professional education.
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