1.1: Concept Self-Check
- Page ID
- 20065
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Use the following as a self-check while working through Chapter 1.
- What is accounting?
- What is the difference between internal and external users of accounting information?
- What is the difference between managerial and financial accounting?
- What is the difference between a business organization and a non-business organization?
- What are the three types of business organizations?
- What is a PAE? A PE?
- What does the term limited liability mean?
- Explain how ethics are involved in the practice of accounting.
- Describe what GAAP refers to.
- Identify and explain the six qualitative characteristics of GAAP.
- Identify and explain at least five of the nine principles that support the GAAP qualitative characteristics.
- How is financial information communicated to external users?
- What are the four financial statements?
- Which financial statement measures financial performance? Financial position?
- What information is provided in the statement of cash flows?
- Explain how retained earnings and dividends are related.
- What are the three primary components of the balance sheet?
- Equity consists of what two components?
- How are assets financed?
- Identify and explain the three types of activities a business engages in.
- What are notes to the financial statements?
- What is the accounting equation?
- What are the distinctions among calendar, interim, and fiscal year ends?
NOTE: The purpose of these questions is to prepare you for the concepts introduced in the chapter. Your goal should be to answer each of these questions as you read through the chapter. If, when you complete the chapter, you are unable to answer one or more the Concept Self-Check questions, go back through the content to find the answer(s). Solutions are not provided to these questions.