The accounting records that reflect the financial activities of a specific corporate entity, separate and distinct from the people who finance it or work in it. It is one of the 'ground rules' of accounting.
What is Business Entity.
100
A business that generates income by providing services instead of selling physical products.
What is Service Business.
100
Cost of borrowing money, benefits expected from using money.
What is Finance Function.
100
Shows the relationship of current assets and current liabilities; measure of company liquidity (ability to pay short-term obligations).
What is Current Ratio.
100
Only certain people are authorized to do certain things.
What is Proper Authorization.
200
A term for a company that has the resources needed in order to continue to operate indefinitely. This refers to a company's ability to make enough money to stay afloat or avoid bankruptcy.
What is Going Concern.
200
A business that purchases finished products and resells them to consumers.
What is Merchandising Business.
200
Pay and fringe benefits for employees, hiring costs.
What is Human Resource Function.
200
Relationship of gross margin (sales minus cost of goods sold) to sales.
What is Gross Margin Ratio.
200
The person(s) who have access to the accounting records should not also have access to cash.
What is Separating Incompatible Duties.
300
A principle that states that you only record business transactions that can be expressed in terms of a currency.
What is Monetary Unit Principal.
300
A business that uses components, parts or raw materials to make a finished good.
What is Manufacturing Business.
300
Pricing, distribution costs.
What is Marketing Function.
300
Relationship of net income to average total assets.
What is Return on Investment.
300
Records must be kept, an accounting system must be working properly.
What is Maintaining Adequate Documentation.
400
The activity within the scope of an accounting period that must be recorded within the time period on a financial statement.
What is Periodicity Concept.
400
A person who owns the business and is personally responsible for its debts.
What is Sole Proprietorship.
400
Cost to produce a unit, what a unit should cost.
What is Production Function.
400
Relationship of net income to average owners’ equity.
What is Return on Owners' Equity.
400
Assets should be kept under lock and key and records should be backed-up and kept in a safe place.
What is Physically Controlling Assets and Documents.
500
Assets = Liabilities + Owner's Equity.
What is Accounting Equation.
500
A legal entity that is separate and distinct from its owners.
What is Corporation.
500
Which function occurs when a business borrows money from the bank?
What is Finance Function.
500
Relationship of liquid assets to current liabilities
What is Quick Ratio.
500
Employees should be supervised.
What is Providing Independent Checks on Performance.