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ACC ch.1 review
just everything to know from the review sheet. Still practice the quizlets
| Question | Answer |
|---|---|
| Identifies organization's business activities | Accounting |
| Communicates organization's business activities | Accounting |
| Records organization's business activities | Accounting |
| it is the information and measurement system that identifies, records, and communicates relevant information about a company’s business activities | Accounting |
| IDEA stands for (this is just a helpful acronym) | Increase debts by expenses and assets |
| It helps people make better decisions | Accounting |
| Area of accounting aimed at serving the decision-making needs of internal users | Managerial accounting |
| what are the two groups of people who use accounting information | external users and internal users |
| Persons using accounting information who are not directly involved in running the organization. | external users |
| Persons using accounting information who are directly involved in managing the organization | internal users |
| Shareholders are ___ users of accounting information | External users of accounting information |
| Customers are ____ users of accounting information | External users of accounting information |
| Area of accounting who's primary objective is to provide accounting information that serves external users | Financial accounting |
| Purchasing managers are ____ users of accounting information | internal users of accounting information |
| Government regulators are ___ users of accounting information | External users of accounting information |
| Human resource managers are ____ users of accounting information | internal users of accounting information |
| Creditors are ___ users of accounting information | External users of accounting information |
| Chief executive officer (CEO)'s are ____ users of accounting information | internal users of accounting information |
| Marketing managers are ____ users of accounting information | internal users of accounting information |
| ____ are also known as lenders, these people loan money or other resources to an organization. Banks, savings and loans, and mortgage companies | Creditors |
| ____ is known as the language of business | Accounting |
| why is accounting known as the language of business? | it communicates data that help people make better decisions |
| Accountants face ____ as they prepare financial reports | Ethical choices |
| ____ are good business | Good Ethics |
| these are are beliefs that separate right from wrong | Ethics |
| ___ are accepted standards of good and bad behavior | Ethics |
| the majority of accounting opportunities are in | Private accounting |
| Private accounting is when ___ | employees are working for businesses |
| ___ offer auditing, advisory services and taxation. | Public accounting |
| ___ offers the next largest number of opportunities | Public accounting |
| ____ offers opportunities in business regulation and investigation of law violations | government and not-forprofit agencie |
| ___ is a rule that requires financial statements to assume that the business will continue operating instead of being closed or sold | Going-concern assumption |
| what are 3 out of the 4 general accounting principles? | Revenue recognition, Measurement (Cost), Expense recognition (Matching) |
| ___ is the rule that requires revenue to be recognized when goods or services are provided to customers and at the amount expected to be received from the customer | Revenue recognition principle |
| ___ is the accounting principle which requires that all goods and services purchased be recorded at actual cost | Measurement (Cost) principle |
| Should an asset be recorded in the purchaser’s books at the purchase price actually paid? | Yes it should be |
| Should an asset be recorded in the purchaser’s books at what it was listed for sale at or what it is valued at by an appraiser? | No it shouldn't be |
| ___ is the accounting principle which states that a company must record the expenses it incurred to generate the revenue reported | Expense recognition (Matching) principle |
| What is the Accounting equation? | Assets = Liabilities + Equity |
| ___ are resources owned or controlled by a business that are expected to yield future benefits | Assets |
| ____ are reported on the Balance Sheet | Assets |
| Assets are reported on what which financial statement? | Balance Sheet |
| liabilities are reported on what which financial statement? | Balance Sheet |
| equity is reported on what which financial statement? | Balance Sheet |
| Expenses are reported on what which financial statement? | Income Statement |
| what is the Expanded Accounting Equation? | Assets = Liabilities + Common stock – Dividends + Revenues – Expenses |
| Revenue is reported on what which financial statement? | Income Statement |
| ___ are debts owed by a business | Liabilities |
| ___ are creditors’ claims on assets | Liabilities |
| These claims reflect obligations to transfer assets or provide products or services to others. They are ____ | Liabilities |
| ___ is the difference between a company's assets and its liabilities | Equity |
| ___ is the owner’s claim on assets | Equity |
| ___ is reported on the Statement of Stockholder’s Equity and on the balance sheet | Equity |
| ___ is the monetary value earned for selling goods or services to customers | Revenue |
| ____ represents increases in equity from a company's sales of products or services to customers | Revenue |
| ____ are amounts used to generate revenue | Expenses |
| ___ Occurs when revenue exceed expenses | Net Income |
| ___ is also called Profit | Net Income |
| ___ is when expenses exceed revenue | Net Loss |
| Cash is a _____ account | Asset |
| Accounts Receivable is a _____ account | Asset |
| Supplies is a _____ account | Asset |
| Prepaid Insurance is a _____ account | Asset |
| Fixed assets are a _____ account | Asset |
| equipment is a _____ account | Asset |
| autos is a _____ account | Asset |
| buildings is a _____ account | Asset |
| land is a _____ account | Asset |
| Accounts Payable is a _____ account | Liability |
| Notes Payable is a _____ account | Liability |
| Taxes Payable is a _____ account | Liability |
| Wages Payable is a _____ account | Liability |
| Computers are a _____ account | Asset |
| vehicles are a _____ account | Asset |
| Common Stock is a _____ account | Equity |
| Retained earnings are a _____ account | Equity |
| Dividends are a _____ account | Equity |
| Catering Revenue is a _____ account | Revenue |
| Consulting Revenue is a _____ account | Revenue |
| Rental Revenue is a _____ account | Revenue |
| Services Revenue is a _____ account | Revenue |
| Advertising Expense is a _____ account | Expense |
| Interest Expense is a _____ account | Expense |
| equipment, autos, buildings, and land are considered _____ assets | Fixed assets |
| Liability accounts include _____ | Accounts Payable, Notes Payable, Taxes Payable, Wages Payable |
| Equity accounts include _____ | Dividends, Common Stock, and Retained earnings |
| ____ make equity decrease | Dividends |
| Miscellaneous Expense is a _____ account | Expenses |
| Rent Expense is a _____ account | Expenses |
| Repairs Expense is a _____ account | Expenses |
| Salaries Expense is a _____ account | Expenses |
| Telephone Expense is a _____ account | Expenses |
| Utilities Expense is a _____ account | Expenses |
| Wage Expense is a _____ account | Expenses |
| Assets created by selling goods and services on credit (on account) are called ____ | Accounts Receivable |
| Liabilities created by a business when it makes a purchase on credit (on account) are called ____ | Accounts Payable |
| The financial statements are _____ | Income Statement, Statement of Retained Earnings, Balance Sheet, Statement of Cash Flows |
| a ___ is the financial statement providing information that helps users understand a company's financial status | Balance Sheet |
| ____ Lists the types and amounts of assets, liabilities, and equity as of a specific date | Balance Sheet |
| Balance Sheets focues on ___ | a specific date like July 30th |
| a ____ is the financial statement that presents a summary of the revenues and expenses of a business for a specific period of time, such as a month or year. | Income Statement |
| ___ reports whether the business earned a profit (net income) or had a loss (net loss) | Income Statement |
| Income Statements focus on ___ | a specific period of time like a month or year. |
| If a company uses cash to purchase supplies, the effect on the accounting equation would be ____ | • The Cash asset account decreases • The Supplies asset account increases • Since they are both assets, there is no effect on the accounting equation |
| If a company purchases equipment on credit, the effect on the accounting equation would be ____ | • The Equipment asset account increases • The Accounts Payable liability account increases |
| If a company paid off $X of its accounts payable in cash, the effect on the accounting equation would be ___ | • The Cash asset account decreases $X (because we lost money) • The Accounts Payable liability account decreases $X |
| If a company billed a client for $X of consulting work completed ____ | • The Accounts Receivable asset increases by $X and • The Consulting Revenue account increases $X |
| ASSET = LIABILITIES + EQUITY + Cash + Common stock | Increase on both sides of equation keeps equation in balance |
| ASSET = LIABILITIES + EQUITY + Supplies − Cash | Increase and decrease on one side of the equation keeps equation in balance. |
| ASSET = LIABILITIES + EQUITY + Equipment – Cash | Increase and decrease on one side of the equation keeps equation in balance. |
| ASSET = LIABILITIES + EQUITY + Supplies + Accounts Payable | Increase on both sides of equation keeps equation in balance |
| ASSET = LIABILITIES + EQUITY + Cash + Revenue Earned | Increase on both sides of equation keeps equation in balance. |
| ASSET = LIABILITIES + EQUITY − Cash − + Expense | Decrease on both sides of equation keeps equation in balance. |
| ASSET = LIABILITIES + EQUITY + Accts. Receivable + Revenue Earned | Increase on both sides of equation keeps equation in balance. |
| ASSET = LIABILITIES + EQUITY + Cash − Accts. Receivable | Increase and decrease on one side of the equation keeps equation in balance |
| ASSET = LIABILITIES + EQUITY − Cash − Accounts Payable | Decrease on both sides of equation keeps equation in balance |
| ASSET = LIABILITIES + EQUITY − Cash − (+ Dividends) | Decrease on both sides of equation keeps equation in balance. (Note: since dividends are not expenses, they are not used in computing net income.) |
Created by:
22gonzalez
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