Flashcards in Part 1 Deck (39)
What are the 2 primary functions of Financial Accounting?
- Measure business activities of a company
- Communicate to external parties for decision making
In a ___, the business is owned by one person.
In a ___, the business is owned by two or more people.
In a ___, the business is legally separate from its owners, there is a limited liability of stockholders, and the transfer of ownership will not affect continuity.
Most enterprises in the US are a ___.
___ activities are transactions the company has with investors and creditors.
___ activities are transactions involving the purchase and sale of resources that provide benefit for several years.
___ activities are transactions that relate to the primary operations of the company.
A(n) ___ reports revenues and expenses over an interval of time; assesses the company's ability to earn a profit.
The ___ summarizes the changes in stockholder's equity over an interval of time.
Statement of Stockholders Equity
The ___ presents the financial position of the company on a particular date.
The ___ measures activities involving cash receipts and cash payments over an interval of time.
Statement of Cash Flows
___ cash flows are cash transactions involving revenues and expenses.
___ cash flows are cash transactions involving the purchase and sale of long-term assets.
___ cash flows are cash transactions involving lenders and stockholders.
Name the 4 Underlying Assumptions of GAAP.
- Economic Entity
- Monetary Unit
- Going Concern
___ are trained individuals hired by a company as an independent party to express a professional opinion of the extent to which financial statements are prepared in accordance with GAAP.
What are the 3 primary goals of financial information?
- Help investors and creditors make decisions
- Help to predict cash flows
- Tell about economic resources, claims to resources, and changes in resources and claims.
The assumption that a business will continue to operate into the future is the ___ assumption.
A(n) ___ is a summary of all transactions related to a particular item over a period of time.
A(n) ___ is a list of all account names used to record transactions.
Chart of Accounts
___ are those who lend money or deliver goods and services before being paid.
A(n) ___ provides a chronological record of all transactions.
A(n) ___ is the format used for recording transactions.
___ is the process of transferring the debit and credit information from the journal to individual accounts in the general ledger.
The ___ provides in a single location the list of transactions affecting each account and the account's balance.
The ___ is a list of all accounts and their balances at a particular date; used for internal purposes only.
When are revenues recorded?
In the period in which the goods/services are provided to customers.
When are expenses recorded?
In the same period as the revenues they help to generate.