Save
Upgrade to remove ads
Busy. Please wait.
Log in with Clever
or
show password
Forgot Password?
Don't have an account?  Sign up 
Sign up using Clever
or
Username is available taken
show password


Make sure to remember your password. If you forget it there is no way for StudyStack to send you a reset link. You would need to create a new account. Your email address is only used to allow you to reset your password. See our Privacy Policy and Terms of Service.

Already a StudyStack user? Log In

Reset Password
Enter the associated with your account, and we'll email you a link to reset your password.
focusNode
Didn't know it?
click below
 
Knew it?
click below
Don't Know
Remaining cards (0)
Know
0:00
edit
Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.

  Normal Size     Small Size show me how

interm Acct. 1 exam1

Objective of Financial Accounting Provide useful information to investors/creditors for decision‑making.
Primary Users of Financial Statements External users: investors, creditors, regulators.
GAAP Generally Accepted Accounting Principles — U.S. accounting rules.
FASB Financial Accounting Standards Board — creates GAAP.
SEC Securities and Exchange Commission — enforces reporting rules for public companies.
Purpose of Conceptual Framework Provide a foundation for consistent accounting standards.
Theme of Conceptual Framework Decision‑usefulness.
Comparability Different companies can be compared.
Consistency Same company uses same methods over time.
Relevance Information that influences decisions (predictive + confirmatory value + materiality).
Faithful Representation Accurate depiction of reality (complete, neutral, free from error).
Revenue Recognition Principle Record revenue when earned, not when cash is received.
Expense Recognition (Matching) Principle Record expenses in the same period as related revenue.
Historical Cost Principle Record assets at original purchase price.
Cost Constraint Benefits of information must outweigh the cost of providing it.
Enhancing Qualities Comparability, verifiability, timeliness, understandability.
Temporary Accounts Revenue, expenses, dividends — closed to retained earnings.
Permanent Accounts Assets, liabilities, equity — carry forward.
Closing Entries Purpose Reset temporary accounts to zero; update retained earnings.
Closing Entry Steps Close revenues → Income Summary Close expenses → Income Summary Close Income Summary → Retained Earnings Close dividends → Retained Earnings
Impact of Missing Adjusting Entries Assets overstated, liabilities understated, expenses understated, revenue understated, net income overstated.
Overstated vs Understated Missing expenses → net income overstated Missing revenue → net income understated Missing depreciation → assets overstated
Normal Balance: Assets Debit
Normal Balance: Expenses Debit
Normal Balance: Dividends Debit
Normal Balance: Liabilities Credit
Normal Balance: Equity Credit
Normal Balance: Revenue Credit
Account Types Asset, liability, equity, revenue, expense, dividend.
Flow: Rev & Exp → Net Income → Retained Earnings → Equity Net income increases retained earnings → increases equity.
Depreciation Adjusting Entry Debit Depreciation Expense Credit Accumulated Depreciation
Supplies Adjusting Entry Debit Supplies Expense Credit Supplies
Unearned Revenue Adjusting Entry Debit Unearned Revenue Credit Revenue
Accrued Revenue Adjusting Entry Debit Accounts Receivable Credit Revenue
Accrued Expense Adjusting Entry Debit Expense Credit Payable
Allowance for Doubtful Accounts Purpose Estimate uncollectible accounts.
Desired Ending Balance Calculation Accounts receivable × estimated % uncollectible.
Adjustment Needed Desired ending balance – beginning balance.
Bad Debt Adjusting Entry Debit Bad Debt Expense Credit Allowance for Doubtful Accounts
Net Realizable Value (NRV) Accounts receivable – allowance.
Net Income Formula Revenue – Expenses.
Timeliness Permits user to identifty similarities and differences between two sets of economic phenomena
Predictive value Value as an input to processes used to form expectations about the future
Neutrality Absence of bias intended to attain a predetermined result or induce a particular behavior.
Confirmatory value Corrects past or present expectations based on previous evaluations
Free from error the extent to which information is accurate in representing economic substance
Completeness includes all information necessary fro a faithful representation
Understandability Allows users to comprehend the meaning of the information
Created by: user-1751855
 

 



Voices

Use these flashcards to help memorize information. Look at the large card and try to recall what is on the other side. Then click the card to flip it. If you knew the answer, click the green Know box. Otherwise, click the red Don't know box.

When you've placed seven or more cards in the Don't know box, click "retry" to try those cards again.

If you've accidentally put the card in the wrong box, just click on the card to take it out of the box.

You can also use your keyboard to move the cards as follows:

If you are logged in to your account, this website will remember which cards you know and don't know so that they are in the same box the next time you log in.

When you need a break, try one of the other activities listed below the flashcards like Matching, Snowman, or Hungry Bug. Although it may feel like you're playing a game, your brain is still making more connections with the information to help you out.

To see how well you know the information, try the Quiz or Test activity.

Pass complete!
"Know" box contains:
Time elapsed:
Retries:
restart all cards