1.Financial accounting is an information system that tracks and records and organization's business transactions
2.That's right! Business transactions are classified as operating, investing and financing.
3.That's right! Above all, an auditor must make an independent judgment about the validity of a company's financial statements.

4.Correct. It is called a balance sheet because it reports the balance or amount in each asset, liability and owners' equity account.
5.That's right. A balance sheet describes an entity's financial position at a point in time; the other two financial statements describe financial flows over a period of time.
6.That's right. An income statement describes the entity's operating performance (revenues, expenses and income) over a period of time known as the accounting period.

7.That's right. A statement of cash flows describes the entity's sources and uses of cash over a period of time.

8.Correct. Cash owned by a business is an asset of the business; a bank loan represents a liability of the business - an obligation to repay the loan.
9.Purchase or sale of a building is an investment
10.raising cash from investors is financing
11.selling products and services is operating
12. Correct. (True) Any organization that needs to keep and communicate financial records can be an accounting entity. Whether or not it makes or aims to make a profit is irrelevant.
13. That's right! Global Grocer is the entity, and only the payment of salary to Stan Brown has an effect on Global Grocer's accounts. The other events occur to other entities and do not involve Global Grocer.
14. That's right! The support of the local Women's Club is likely to be a very valuable source of business and as free advertising in the community, but it's monetary value cannot be determined.
15. Going Concern Concept "Accounting does not report what the assets of a