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First Day Flashcards

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0
Q

Accounting is a….

What is the importance of accounting

A

System that

identifies , records, communicates

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1
Q

What are the types of businesses

A

Corporation , proprietorship,partnership

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2
Q

What does GAAP stand for

A

Generally accepted accounting principles

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3
Q

GAAP is

A

Rules and regulations used to govern companies , it makes them comparable

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4
Q

Who comes up with GAAP

A

The financial Accounting Standing board

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5
Q

For publicly traded companies who makes GAAP?

A

SEC (securities exchange commission)

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6
Q

What does IFRS stand for

A

International financial reporting standards

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7
Q

What is IFRS?

A

Set of universal standards for Acct.

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8
Q

What does SEC stand for?

A

Securities exchange commission

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9
Q

Who comes up with IFRS?

A

IASB

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10
Q

What does IASB stand for ?

A

International accounting standards board

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11
Q

How many accounting principles are there?

A

2

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12
Q

What are the 4 basic accounting principles?

A

Measurement principle(cost principle)
Full disclosure principle
Revenue recognition principle
Expense recognition principle (matching principle )

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13
Q

What is the revenue recognition principle ?

A

Guidance on when a company must recognize (record) revenue.revenue is recognized when earned (the transaction is complete)

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14
Q

What is the measurement principle (cost principle)?

A

Acct. based on actual cost, cost is measured on a cash or equal to cash basis

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15
Q

What is the full disclosure principle ?

A

Company reports details behind financial statements that would impact users decisions
-usually on footnotes of a statement

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16
Q

What is the expense recognition principle (matching principle )?

A

Company record the expenses it in incurred to generate revenue reported

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17
Q

What is the accounting equation ?

A

Assets =liabilities +equity

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18
Q

What are the 6 types of accounts ?

A 
Assets 
Liabilities 
Equity
Revenue
Expense
Dividend
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19
Q

Assets are?

A

Resources owned by a company

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20
Q

Liabilities are ?

A

Company’s debt (something you owe ), a creditors claims on assets

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21
Q

Equity?

A

Owners stake , owners claim on assets

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22
Q

Revenue is ?

A

Income earned (doesn’t have to be money )

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23
Q

Expense is ?

A

Cost you incur to generate revenue

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24
Dividends are ?
Return on investment (take earnings and give it to share holders )
25
What is the accrual bases of acct?
When we earn revenue we record is or when expenses are incurred NOT on cash bases
26
What is double entry accounting ?
When at least 2 accts are effected (Both can be from same category ) Credits and debits must add up
27
Debit and credit is a
Increase or decrease
28
Owners equity made of
Capital stock and retained earnings
29
Revenues do what to retained earnings
Increase them
30
Expenses do what to retained earnings ?
Decrease them
31
Dividends do what to retained earnings ?
Decrease them
32
Accounts receivable is
When you receive a resources value
33
Fees earned is
Revenue , we earned more fees
34
What is record or book keeping
Recording of transactions and events either manually or electronically
35
What are the three sides on the fraud triangle
Opportunity Rationalization Financial pressure
36
What are the three major categories of accounting
Private -working for businesses (58%) Public-auditing and tax advice (23%) Government, non for profit and education - Business regulation and investigation of law violations (19%)
37
Cash basis accounting
Accounting system that recognizes revenues when cash is received and records expenses when cash is paid
38
Current ratio is
Current ratio = currents assets/current liabilities
39
What is a current ratio?
One measure of a company's ability to pay its short term obligations Less than 1.0 trouble w short term obligations More than 1.0 can cover its short term assets
40
What accounts are not closed
Assets liabilities, and equity
41
What accounts must end every period with zero balances
Revenue , expense, dividends
42
What is the income summary
A temporary account used for the closing process that contains a credit for the sum of all revenues and a debit for the sum of all expenses Balance =net income or net loss
43
Debt ratio is a
Percentage and inverse of current ratio
44
Accounting is known as the language of
Business
45
Two groups of accounting
Internal and external
46
What did sox (sarabanes oxley act) require
Public companies apply both accountng oversight and strigent internal controls to help curb financial abuses at companies that offer stock to the public
47
When revenue exceeds expenses
Net income
48
Three major types of business activities
Financing Operating Investing
49
Individuals and organizations that have a right to force the sale of companies assets to obtain money to meet creditors claims
Creditors
50
An example of unearned revenue
Season ticket, magazine subscriptions
51
Used to evaluate a company's ability to pay its current liabilities out of current assets
Current ratio
52
Recording of transactions and events either manually or electronically
Record keeping or bookkeeping
53
A business legally separate from its owner or owners meaning it is responsible for its own acts and it's own debts
Corporation
54
A business owned by one person in which that person and the company are viewed as one entity for tax and liability purposes
Sole proprietorship
55
Revenues exceed expenses
Net income
56
Expenses exceed revenues
Net loss
57
This describes a company's financial position at a point in time
Balance sheet
58
This reports ash receipts and payments from primary business the company engages in
Statement of cash flows
59
This identifies and describes transactions and events entering the accounting process
Source documents
60
A record of increase and decreases in a specific asset, liability, equity, revenue or expense item
Account
61
Record containing all accounts used by a company
Ledger or general ledger
62
Individuals and organizations that have rights to receive payments from a company
Creditors
63
A list of all ledger accounts and includes an identification number assigned to each account
Chart of accounts
64
Double entry accounting requires
At least 2 accounts are involved with at least one debit and one credit Debits=credits Accounting equation must not be violated
65
This gives a complete record of each transaction in one place. It also shows debits and credits for each transaction
Journal
66
A list of accounts and their balances at a point in time
Trial balance
67
Cost that are incurred in a period but are both unpaid and unrecorded
Accrued expenses
68
Revenues earned in a period that are both unrecorded and not yet received in cash (or other assets)
Accrued revenues
69
Name temporary accounts
Revenues Expenses Dividends Income summary
70
Name permanent accounts
Assets Liabilities Common stock Retained earnings
71
Steps in preparing financial statements is refereed to as the
Accounting cycle
72
Recite the accounting cycle
``` 1analyze transactions 2journalize 3post to ledger 4prepare unadjusted trial balance 5prepare adjusting entries 6prepare adjusted trial balance 7prepare statements 8close 9prepare post closing trial balance 10reverse ```
73
Time span from when cash is used to acquire goods and services until cash is received from the sale of goods and services
Operating cycle
74
Tangible assets that are both long lived and used to produce or sell products and services
Plant assets
75
One measure of company's ability to pay its shortterm obligations
Current ratio

Accounting First Day (4 decks)

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