ADM1340 MIDTERM: KEY TERMS REVIEW
QUESTIONS WITH 100% ACCURATE ANSWERS
Accounting - Accurate answers process of identifying, recording, and communicating the economic
events of a business to interested users
Accounting equation - Accurate answers
Assets - Accurate answers resources owned or controlled by a business that provide future
economic benefits
corportation - Accurate answers a business organized as a separate legal entity having ownership
divided into transferable shares held by shareholders
deficit - Accurate answers negative balance in retained earnings as a result of accumulated losses
from the prior and current periods exceeding the profits
dividends - Accurate answers distribution of retained earnings from a corporation to its
shareholders
expenses - Accurate answers decrease in economic benefit that result from the costs of assets
consumed or services used in ongoing operations to generate revenue
financing activities - Accurate answers -borrowing cash
-issuing (or reacquiring) shares
-paying dividends to investors
fiscal year - Accurate answers accounting period that is one year long
generally accepted accounting practices (GAAP) - Accurate answers general guide that describes
how economic events should be recorded and reported for financial reporting purposes
income statement - Accurate answers statement that presents revenues and expenses and profit
(or loss) of a company for a specific period of time
investing activities - Accurate answers -purchasing and disposing of long-term assets, such as
property, plant, and equipment
-long-term investments
liabilities - Accurate answers debts and obligations of a business
loss - Accurate answers amount by which expenses are more than revenues
operating activities - Accurate answers -day-to-day operations that include:
-revenues and expenses
