Moraine Valley Financial Accounting (BUS-142-001) final study guide
Which statement is dated as a specific date? (April 30, 2001) - ANSWER-Balance sheet (because cash is constantly changning)
Which statement shows the amount of possessions a business has and who has a "claim" to those possessions? - ANSWER-Balance sheet
Accounting - ANSWER-A system of communicating info for better decision making
Financial Accounting - ANSWER-Provides info to EXTERNAL users
Managerial Accounting - ANSWER-Provides info to INTERNAL users
Asset - ANSWER-Something owned that has value (the resources owned by a business)
Liability - ANSWER-Debts you owe someone (the rights of the creditors are the debts of the business)
(Stockholder's) Equity - ANSWER-the rights of the owners (the worth of the business)
Revenue - ANSWER-A business earns money by selling goods/services to its customers
FASB - ANSWER-Financial Accounting Standards Board - they make the rules
SEC - ANSWER-Security and Exchange Commission - enforce the rules
Expense - ANSWER-Assets used in the process of earning revenue
What is the purpose of a journal and a ledger? - ANSWER-Journal - written out version Ledger - pages of numbers
Posting - ANSWER-Transferring from the journal to the ledger
The accounting equation (two ways) - ANSWER-1. Assets = liabilities + equity
- Assets - liabilities = equity
Income Statement - ANSWER-Reports the revenues and expenses for a period of time (Revenue and Expenses)
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Balance sheet - ANSWER-Reports assets, liabilities, and equity as of a specific date (A
= L+E)
Retained Earning Statement - ANSWER-The stockholder's equity created from business operations through revenue and expense transactions (Rev - expenses - dividends = retained earnings)
Which two statements cover a period of time? (For the month ended...) - ANSWER- Statement of cash flows and Income statements
Which statement shows the difference between the amount of sales/services and the cost to provide sales/services? - ANSWER-Income Statement
Cash (C/NB/FS) - ANSWER-Asset D+ Balance sheet
Sales (C/NB/FS) - ANSWER-Revenue C+ Income statement
Common Stock (C/NB/FS) - ANSWER-Equity C+ Balance Sheet
Accounts Payable (C/NB/FS) - ANSWER-Liability C+ Balance sheet
Wage Expense (C/NB/FS) - ANSWER-Expense D+ Income Statement
Unearned Revenue (C/NB/FS) - ANSWER-Liability C+ Balance Sheet
Building (C/NB/FS) - ANSWER-Asset
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