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1

What are the 2 primary functions of Financial Accounting?

- Measure business activities of a company
- Communicate to external parties for decision making

2

In a ___, the business is owned by one person.

Sole Proprietorship

3

In a ___, the business is owned by two or more people.

Partnership

4

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.

Corporation

5

Most enterprises in the US are a ___.

Sole Proprietorship

6

___ activities are transactions the company has with investors and creditors.

Financing

7

___ activities are transactions involving the purchase and sale of resources that provide benefit for several years.

Investing

8

___ activities are transactions that relate to the primary operations of the company.

Operating

9

A(n) ___ reports revenues and expenses over an interval of time; assesses the company's ability to earn a profit.

Income Statement

10

The ___ summarizes the changes in stockholder's equity over an interval of time.

Statement of Stockholders Equity

11

The ___ presents the financial position of the company on a particular date.

Balance Sheet

12

The ___ measures activities involving cash receipts and cash payments over an interval of time.

Statement of Cash Flows

13

___ cash flows are cash transactions involving revenues and expenses.

Operating

14

___ cash flows are cash transactions involving the purchase and sale of long-term assets.

Investing

15

___ cash flows are cash transactions involving lenders and stockholders.

Financing

16

Name the 4 Underlying Assumptions of GAAP.

- Economic Entity
- Monetary Unit
- Periodicity
- Going Concern

17

___ 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.

Auditors

18

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.

19

The assumption that a business will continue to operate into the future is the ___ assumption.

Going Concern

20

A(n) ___ is a summary of all transactions related to a particular item over a period of time.

Account

21

A(n) ___ is a list of all account names used to record transactions.

Chart of Accounts

22

___ are those who lend money or deliver goods and services before being paid.

Creditors

23

A(n) ___ provides a chronological record of all transactions.

Journal

24

A(n) ___ is the format used for recording transactions.

Journal Entry

25

___ is the process of transferring the debit and credit information from the journal to individual accounts in the general ledger.

Posting

26

The ___ provides in a single location the list of transactions affecting each account and the account's balance.

General Ledger

27

The ___ is a list of all accounts and their balances at a particular date; used for internal purposes only.

Trial Balance

28

When are revenues recorded?

In the period in which the goods/services are provided to customers.

29

When are expenses recorded?

In the same period as the revenues they help to generate.

30

A(n) ___ is when cash is paid to purchase an asset in the current period that will be recorded as an expense in a future period(s).

Prepaid Expense