Aspen K.

Douglass

Quiz 1

1. Audit – An investigation of the financial statement to determine if they are fairly stated.
Return of investment – When the money that is put in you make it back
Return on investment – When a profit is made off the original investment
Generally accepted accounting principles - The rules and regulations about what to be included
in financial reporting and how to present it.
Balance sheet – Snapshot of the financial position of company at one point in time
Income statement – Tells us the results of operations
Internal control structure – A process designed to provide reasonable assurance that a company
produces reliable financial reports and complies with laws and regulations
Management accounting – For internal users
Statement of cash flows – Tells us the sources and use of cash

2. Potential buyers, Investors, Stockholders, Auditors, Customers, Suppliers, CEO’s

3. Financial accounting is external users and managerial accounting is for internal users

4. Balance Sheet – Snapshot of the financial position of company at one point in time
Income Statement – Tell us the results of operations
Cash Flow Statement – Tell us the sources and use of cash
Retained Earnings Statement – Tells us the owners claims to the assets

5. Assets which are an economic resource owned by a business expected to benefit future
operations. And the stale dollar assumption which considers inflection and deflation

6. Sole proprietorship – a business owned by 1 person. Partnership – a business 2 or more owners.

Corporation – a legal entity