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College Accounting > Test 1 > Flashcards

Test 1 Flashcards

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1
Q

what is accounting

A

the language of business; a system of maintaining records of a companies operations and communicating that information to decisions makers

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2
Q

what is financial accounting

A

accounting information for external users; public

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3
Q

what is managerial accounting

A

accounting information for internal users’ inside people

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4
Q

what are assets

A

resources of a company

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5
Q

examples of assets

A

cash, land, supplies, equipment, inventory, accounts receivable

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6
Q

what are liabilities

A

amount owed to creditors; debts; obligations/promises to others

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7
Q

examples of liabilities

A

notes payable, accounts payable, (anything payable?)

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8
Q

what is stockholders equity

A

owners claim to resources

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9
Q

examples of SHE

A

Common Stock, retained earnings

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10
Q

what is the accounting equation

A

Assets= liabilities+SHE

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11
Q

what is a revenue

A

sales of products or services to customers

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12
Q

what are expenses

A

costs of selling products or services

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13
Q

what is the net income equation

A

Revenues-expenses= net income

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14
Q

what are dividends

A

distribution of profit to stockholders

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15
Q

what is an income statement

A

reports the company’s revenues and expenses over an interval of time

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16
Q

what is the statement of stockholders equity

A

summarizes the changes in stockholders equity over an interval of time

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17
Q

what is stockholders equity

A

=common stock+retained earnings, dividends

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18
Q

what is a balance sheet

A

presents the financial position of the company on a particular date; claim to resources; assets, liabilities, SHE, common stock, retained earnings

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19
Q

what are statements of cash flows

A

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

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20
Q

what are operating cash flows

A

cash transactions involving revenues and expenses

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21
Q

what are investing ash flows

A

cash transactions involving purchase and sale of long term assets

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22
Q

financing cash flows

A

cash transaction involving leaders and stockholders

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23
Q

accounts affected; issue common stock for 25000 to obtain the funds

A

common stock

cash

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24
Q

accounts affected; borrows 10,000 for bank and a sign note

A

notes payable, cash

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25
accounts affected; purchase equipment using 24,000 cash
cash, equipment
26
accounts affected; pay one year rent in advance 6,000
``` prepaid rent (asset account), cash ```
27
accounts affected; provide training to customers for cash 4,300
cash, service revenue
28
group 1 of debit/credit rules
increase by debit, decrease by credit; assets, expense, dividends
29
group 2 of debit/credit rules
decrease by debit, increase by credit; liabilities, stockholders equity; common stock, retained earnings, revenues
30
revenue recognition principle
revenues are recorded in the period in which the goods or services are provided to customers
31
expense recognition principle (matching period)
expenses are reported in the same period as the revenues they help to generate
32
accrual basis revenue recognition
when goods and services are provided to customers
33
cash basis revenue recognition
when cash is received
34
accrual basis expense recognition
in the period costs are used to help produce revenues
35
cash basis expense recognition
when cash is paid
36
who is/isnt apart of GAAP
accrual basis is, cash basis is not
37
what are prepaid expenses
pay cash (or have an obligation to pay cash) to purchase an asset in the current period that will be recorded as an expense in a future period
38
what are deferred revenues
receive cash in the current period that will be recorded as revenue in a future period; originally a liability because there is an obligation the customer
39
what are accrued expenses
record an expense in the current period that will be paid in cash in a future period
40
interest formula
borrowed money x %interest x (1/12)
41
what is depreciation
cash paid for equipment; decrease in usefulness
42
deposit outstanding
cash receipts of the company that have not been added to the bank's record of the company's balance
43
checks outstanding
checks the company has written that have not been subtracted from the bank's record of the company's balance
44
cash transactions
recored by bank but not by company
45
retained earnings
represents the cumulative amount of net income earned over the life of the company that has not been distributed to stockholders as dividends
46
bank reconciliation
marches the balance of cash in the bank account with the balance of cash in the company's own words
47
order of financial statements being prepared
income statement, SHE, balance sheet
48
GAAP
the body of rules and procedures that guide the measurement and communication of financial accounting information in the United States
49
Financial accounting standards board
where financial accounting and reporting standards in the United States are established
50
measuring process transactions
using source documents to analyze accounts affected, recording transactions, analyzing transactions for their effects on the accounting equation
51
order of measuring process transactions (whole thing)
using source documents to analyze accounts affected, analyzing transactions for their effect on the accounting equation, recording transactions in journal, general ledger (posting), trial balance, make adjusting entries, adjusted trial balance, prepare financial statements, closing temporary account
52
is deferred revenue an asset, liability, or SHE
liability
53
which of the accounts are decreased on the debit side and increased on the credit side
liabilities, common stock, revenues
54
which of the accounts are increased on the debit side and decreased on the credit side
assets, expense, dividends
55
which would normally have a debit balance
cash, delivery expense, dividends; all increase by debit
56
what does utilities expense do
increases with debits
57
what are accounts payable, service revenue, and common stock apart of
credit
58
posting transactions to T-Accounts involve
transferring debit and credit information form the journal to the accounts in the general ledger
59
what does a trial balance represent
list of all accounts and their balances at a particular date to ensure that debits equal credits
60
what does matching principles state
all costs that are used to generate revenue is recognized
61
why is a bank reconciliation necessary
the company has transactions that the bank has not recorded, the bank has transactions that the company has not recorded, reconciliations provide a control over cash
62
deposit outstanding would be placed...
added to the bank's cash balance
63
bank reconciliation and interest
add interest to company
64
bank reconciliation and service charge
subtract service charge to the company balance
65
bank reconciliation and NSF checks
subtract checks form the company's balance
66
bank reconciliation and deposits
add deposits outstanding to the banks balance

College Accounting (1 decks)

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