This document contains 7 questions about introductory business and accounting concepts. It asks about the definition of accounting, how accounting is used to evaluate business performance, whether it is acceptable for a business owner to have no accounting knowledge as long as an accountant handles it, what information a bank would need before approving a loan, how a profit and loss statement can be used to make business decisions, how to prepare an income statement using financial data provided, and two solutions for monitoring funds during a charity drive besides keeping receipts.

1. Intro to Business Exercise 7.0
1. What is accounting? Explain.
2. One of the purposes of accounting is to evaluate business performance.
Explain what this means and provide a suitable example to illustrate your
answer.
3. Janice is the owner of an architectural firm but she has no rudimentary
knowledge in accounting (she has an accountant who looks after
everything for him). Is this acceptable? Why or why not?
4. Sean needs to borrow $50,000 from the bank to renovate his house.
Discuss briefly what information the bank would need from Sean before
deciding whether to grant him the loan.
5. What information can you obtain from a Profit and Loss Statement? How
can you use this report to assist you in making business decisions (use an
example to illustrate)? What is the other name of P&L statement?
6. For the year 2014, Company A has provided you with the following
information:
- Sales $146,000
- General Expense $17,300
- Salary Expenses $32,000
- Cost of Goods Sold $55,130
- Rental Revenues $7,200
- Interest Expense $2,800
Based on the data given above, prepare a 2014 income statement for the
company.
7. Besides writing and keeping every receipt dutifully, what else can you do
to keep a close eye on the funds (so they don’t go missing) during the
charity drive? Suggest TWO (2) solutions.