The primary function of accounting is to determine whether the business entity is profitable or nonprofitable in its operations.
True / False
False
The business entity principle applies to sole proprietorships but not to corporations, since corporations have many owners known as shareholders.
True / False
False
Unlike a partnership, when a sole proprietorship is unable to meet its debts, the creditors can secure the personal assets of the proprietor to satisfy the debt.
True / False
False
Bookkeeping is the clerical part of the accounting process.
True / False
True
An accountant employed in the field of private accounting generally works in auditing, providing management services, and tax services.
True / False
False
The CA, CGA, and CMA accounting designations are awarded in recognition of the education and practical experience of an individual. The designations allow the individual to practice accounting as a Chartered Accountant, Certified General Accountant, or a Certified Management Accountant.
True / False
True
The purpose of an audit is to uncover theft and fraud so that the users of the financial statements can have a high level of assurance that all money is accounted for.
True / False
False
Profit is determined by subtracting sales from the total expenses of the business.
True / False
False
Corporations have limited liability while sole proprietorships and partnerships have unlimited liability.
True / False
True
Shareholders are the owners of a corporation and have little or no risk to their personal assets.
True / False
True
External users of the accounting information include banks, shareholders, creditors, suppliers, and customers.
True / False
True
Internal users of accounting information include banks, shareholders, and customers.
True / False
False
Good ethics is good business.
True / False
True
Ethics and ethical behaviour are important. Ethics are beliefs that separate right from wrong.
True / False
True
Managerial accounting provides information to the organization's decision makers.
True / False
True
_______________ is an information and measurement system that identifies, classifies, records, and communicates relevant information to people to help them make better decisions.
ACCOUNTING
To check of an organization's accounting systems and records using various tests, an accountant would perform an _______________.
AUDIT
_______________ is the part of accounting that involves recording economic transactions and events, either electronically or manually (also known as record keeping).
BOOKKEEPING
The notion that every business is accounted for separately from its owner's personal activities is called the business _______________ principle.
ENTITY
Capital stock or _______________ is the name for a corporation's stock when only one class of stock is issued.
COMMON SHARE CAPITAL
The chief accounting officer of an organization is called the _______________.
CONTROLLER
A business that is a separate legal entity under federal laws with owners that are called shareholders is known as a _______________.
CORPORATION
_______________ accounting is a managerial accounting activity designed to help managers identify, measure and control operating costs.
COST
Persons using accounting information who are not directly involved in the running of the organization; examples include shareholders, customers, regulators, and suppliers are called _______________(EXTERNAL or INTERNAL) users.
EXTERNAL
Beliefs we have judging actions as right or wrong, fair or unfair, honest or dishonest are known as _______________.
ETHICS
The area of accounting aimed at serving external users is called _______________ accounting
FINANCIAL
When the expenses for a company exceed the sales (revenues), the company will have a _______________.
LOSS
The amount a business earns after subtracting all expenses necessary for its sales is called _______________, profits, or earnings.
NET INCOME
A _______________ is a business that is owned by two or more people that is not organized as a corporation.
PARTNERSHIP
The amounts earned from selling products or services are called _______________ or sales.
REVENUES
_______________ consulting involves activities in which suggestions are offered for improving a company's procedures.
MANAGEMENT
A check of an organization's accounting systems and records using various tests.
Audit
An accountant who has met the examination, education, and experience requirements of the Institute of Chartered Accountants for an individual professionally competent in accounting.
Chartered Accountant
A business that is a separate legal entity under provincial or federal laws with owners that are called shareholders or stockholders.
Corporation
A managerial accounting activity designed to help managers identify, measure and control operating costs.
Cost accounting
The task of recording transactions, processing data, and preparing reports for managers; includes preparing financial statements for disclosure to external users.
General accounting
Activity conducted by employees within organizations to assess whether managers are following established operating procedures and to evaluate the efficiency of operating procedures.
Internal auditing
Activity in which suggestions are offered for improving a company's procedures; the suggestions may concern new accounting and internal control systems, new computer systems, budgeting, and employee benefit plans; also called advisory services.
Management consulting
A business that is owned by two or more people that is not organized as a corporation.
Partnership
Accountants who work for a single employer other than the government.
Private accountants
Accountants who provide their services to many different clients.
Public accountants
The recording of financial transactions and events; either manually or electronically; also called, bookkeeping.
Record keeping
A unit of ownership in a corporation also called stock.
Shares
A business owned by one individual that is not organized as a corporation; also called sole proprietorship.
Single proprietorship
A business owned by one person that is not organized as a corporation (also called single proprietorship).
Sole proprietorship
When debts of a proprietorship or partnership exceed its resources, the owner is financially responsible.
Unlimited liability
An information and measurement system that identifies, records, classifies, and communicates relevant information to people to help them make better decisions.
Accounting
One or more individuals selling products or services for profit.
Business
Every business is accounted for separately from its owner's personal activities.
Business entity principle
An accountant who has met the examination, education, and experience requirements of the Certified Accountants Association for an individual professionally competent in accounting.
Certified General Accountant
Another term for expenses.
Costs
The amount a business earns after subtracting all expenses necessary for its sales; also called net income or profit.
Earnings
Beliefs that separate right from wrong, unfair, honest or dishonest.
Ethics
Examine and provide assurance that financial statements are prepared according to generally accepted accounting principles.
External auditors
Persons using accounting information who are not directly involved in the running of the organization. Examples include shareholders, customers, regulators, and suppliers.
External users
Generally accepted accounting principles are the rules that indicate acceptable accounting practice.
GAAP
Procedures set up to protect assets, ensure reliable accounting reports, promote efficiency, and encourage adherence to company policies.
Internal controls
Persons using accounting information who are directly involved in managing and operating an organization; examples included managers and officers.
Internal users
Restricts partners' liabilities to their own acts and acts of individuals under their control.
Limited liability partnership
Includes both general partner(s) with unlimited liability and a limited partner(s) with liability restricted to the amount invested.
Limited partnership
Arises when expenses total more than sales (revenues).
Loss
Involves considering the impact and being accountable for the effects that actions might have on society.
Social responsibility
