Accounting Can Be Defined As

question 11

Multiple Choice

Accounting can be defined as:

• A) the process of preparing and auditing an entity's financial statements.
• B) the process of identifying, measuring, and communicating economic information about an organization for the purpose of making decisions and informed judgments.
• C) the process of communicating the financial results of corporate activities to investors and regulatory bodies.
• D)None of the above definitions are correct.
• E) A, B and C are correct.

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Definitions:

Securities

Financial instruments that represent an ownership position in a publicly-traded corporation (stock), a creditor relationship with a governmental body or a corporation (bond), or rights to ownership as represented by an option.

Net Worth

The value of all assets a person or corporation owns, minus the liabilities they owe; a measure of financial health.

Liabilities

A debt owed by a business to another organization or individual.

Assets

Resources owned by a business or individual that have economic value and can provide future benefits.