Answere These Questions!

1. “Accounting is ingrained in our society and it is vital to our economic system.” Do you agree?
Explain.
2. a. Identify and describe the steps in the acoounting process.
b. Accounting is an information system that identifies, records and communicates the
economic events of an organization to interested users. Here’s some following
accounting tasks during the year from Sondgeroth NV performs the:
_____ Analyzing and interpreting information.
_____ Classifying economic events.
_____ Explaining uses, meaning, and limitation of data.
_____ Keeping a systematic chronological diary of events.
_____ Measuring events in monetary units.
_____ Preparing accounting reports.
_____ Reporting information in a standard format.
_____ Selecting economic activities relevant to the company.
_____ Summarizing economic events.
Instruction:
Categorize the accounting tasks performed by Sondgeroth NV as relating to either the
Indentifications (I), Recording (R) or Communication (C) aspects od accounting.
3. a. Who are internal users of accounting data? And how does accounting provide relevant
data to these users?
b. What uses of financial accounting information are made by 1) investors and 2) creditors ?
c. the following are users of financial statements:
_____ Customers _____ Labour Unions
_____ Marketing manager _____ Securities regulator
_____ Production supervisor _____ Store manager
_____ Suppliers _____ Taxing agency
_____ Vice president od finance
Instruction: Identify the users as being either external users (E) or internal users (I)
4. “Bookkeeping and accounting are the same.” Do you agree? Explain.
5. a. What is the monetary unit assumption?
b. What is the economic entity assumption?
c. What is the measurment principles?
d. The following situastions involved accounting principle and assumptions:
1. Julia Company owns buildings that are worth substantially more than they originally
cost. In an effort to provide more relevant information, Julia Reports the building at
fair value in its accounting reports.
2. Dekalb Company includes in its accounting records only transaction data that can
expressen in terms of money.
3. Omar Sharif, president of Omar’s Oasis Company, records his personal living costs as
expenses of the Oasis.
Instructions: for each of three situations, state if the accounting method used in correct
or incorrect. If correct, identify which standard or assumption supports the method used.
If incorrect, identify which standard or assumption has been violated.
6. a. What are the three basic forms od profit-oriented business organizations?
b. Teresa is the owner of successful printing shop. Recently her business has been increasing,
and Teresa has been thinking about changing the organization of her business from
proprietorship to a corporation. Discuss some advantages Teresa would enjoy if she were
to inncorporate her business.
7. a. What is the basic accounting equations?
b. Define the terms assets, liabilities and equity.
c. What items effect equity?

8. a. Classify each item as an asset (A), liability (L) or equity (E)

_____ Accounts payable _____ Accounts receivable

_____ Cash _____ Notes payable

_____ Equipment _____ Salaries and wages payable

_____ Supplies _____ Share capital – ordinary

b. Classify each item as dividends (D), revenue (R), or expense (E)

_____ Advertising expense _____ Depreciation expense

_____ Service Revenue _____ Rent revenue

_____ Insurance expense _____ Salaries and wages expense

_____ Dividends _____ Utilities expense