COMPUTERIZED ACCOUNTING CHAPTER 1 EXAM QUESTIONS ANSWERED CORRECTLY LATEST
UPDATE 2026
Accounting - Answers The process of planning, recording, analyzing, and interpreting financial
information.
Accounting system - Answers A planned process designed to compile financial data and summarize
the results in accounting records and reports.
Financial Statements - Answers Financial reports that summarize the financial condition and
operations of a business.
Net worth statement - Answers A formal report that shows what an individual owns, what an
individual owes, and the difference between the two.
Asset - Answers Anything of value that is owned.
Liability - Answers An amount owed
personal net worth - Answers The difference between personal assets and personal liabilities.
Equity - Answers The difference between assets and liabilities
Ethics - Answers The principles of right and wrong that guide an individual in making decisions
Business ethics - Answers The use of ethics in making business decisions
Service business - Answers A business that performs an activity for a fee
Proprietorship - Answers A business owned by one person
Business plan - Answers A formal written document that describes the nature of a business and how it
will operate
GAAP - Answers Generally accepted accounting principles. The standards and rules that accountants
follow while recording and reporting financial activities.
Equities - Answers Financial rights to the assets of a business.
Owner's equity - Answers The amount remaining after the value of all liabilities is subtracted from the
value of all assets.
Accounting equation - Answers An equation showing the relationship among assets, liabilities, and
owner's equity.
Transaction - Answers Any business activity that changes assets, liabilities, or owner's equity.
Account - Answers A record that summarizes all the transactions pertaining to a single item in the
accounting equation.
Account title - Answers The name given to an account.
Account Balance - Answers the difference between the increases and decreases in an account.
Capital Account - Answers An account used to summarize the owner's equity in a business.
Creditor - Answers A person or business to whom liability is owed
Revenue - Answers An increase in equity resulting from the sale of goods or services
Sale on account - Answers A sale for which payment will be received at a later date.
Expense - Answers The cost of goods or services used to operate a business.
Withdrawals - Answers Assets taken form the business for the owner's personal use
UPDATE 2026
Accounting - Answers The process of planning, recording, analyzing, and interpreting financial
information.
Accounting system - Answers A planned process designed to compile financial data and summarize
the results in accounting records and reports.
Financial Statements - Answers Financial reports that summarize the financial condition and
operations of a business.
Net worth statement - Answers A formal report that shows what an individual owns, what an
individual owes, and the difference between the two.
Asset - Answers Anything of value that is owned.
Liability - Answers An amount owed
personal net worth - Answers The difference between personal assets and personal liabilities.
Equity - Answers The difference between assets and liabilities
Ethics - Answers The principles of right and wrong that guide an individual in making decisions
Business ethics - Answers The use of ethics in making business decisions
Service business - Answers A business that performs an activity for a fee
Proprietorship - Answers A business owned by one person
Business plan - Answers A formal written document that describes the nature of a business and how it
will operate
GAAP - Answers Generally accepted accounting principles. The standards and rules that accountants
follow while recording and reporting financial activities.
Equities - Answers Financial rights to the assets of a business.
Owner's equity - Answers The amount remaining after the value of all liabilities is subtracted from the
value of all assets.
Accounting equation - Answers An equation showing the relationship among assets, liabilities, and
owner's equity.
Transaction - Answers Any business activity that changes assets, liabilities, or owner's equity.
Account - Answers A record that summarizes all the transactions pertaining to a single item in the
accounting equation.
Account title - Answers The name given to an account.
Account Balance - Answers the difference between the increases and decreases in an account.
Capital Account - Answers An account used to summarize the owner's equity in a business.
Creditor - Answers A person or business to whom liability is owed
Revenue - Answers An increase in equity resulting from the sale of goods or services
Sale on account - Answers A sale for which payment will be received at a later date.
Expense - Answers The cost of goods or services used to operate a business.
Withdrawals - Answers Assets taken form the business for the owner's personal use
