Question

Consider the following accounting terms and definitions, and match each term to the definition:

1. Sole proprietorship

2. Faithful representation

3. Partnership

4. IFRS

5. Corporation

6. Audit

a. Set of global accounting guidelines, formulated by

the IASB

b. Holds that fair market value should not be used

over actual costs

c. Stands for Financial Accounting Standards Board

d. Owner is referred to as a proprietor

e. Asserts that accounting information should be

complete, neutral, and free from material error

7. Cost principle

8. FASB

9. Creditors

10. SEC

f. An examination of a company’s financial statements

and records

g. Has two or more owners (called partners)

h. U.S. governmental agency that oversees the U.S.

financial markets

i. Type of entity that is designed to limit personal

liability exposure of owners to the entity’s debts

j. Person or business lending money

Short answer

The correct option is matched as follows:

1	d
2	e
3	g
4	a
5	i
6	f
7	b
8	c
9	j
10	h

Step-by-step solution

Step-by-Step-SolutionStep 1: Explanation on Sole Proprietorship

Sole proprietorship refers to the form of business organization, in which there is single owner which is known as proprietor.

Explanation on Audit

Audit refers to the examination of financial statements and records of the business.

Explanation on SEC

SEC stands for Securities Exchange Commission. It is the government agency, which monitors the financial markets of the U.S.