Betty's acct 101 Word Scramble
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Question | Answer |
Define Accounting | A process by which financial information about a business is recorded, classified, summarized, and communicated to interested parties. |
Identify jobs opportunities in accounting. | Accounting clerks, Bookkeepers, public, managerial, governmental |
Identify the users of financial information. | Owners, and managers, employees, suppliers,banks,tax authorities, and investors. |
What are the three types of businesses? | Sole Proprietor-Owned by one person legally responsible for dept and taxes. Partnership-Two or more people who are responsible for debt and taxes. Corporation-One or more owners stockholders are not responsible for firms debt. |
GAAP? | Generally Accepted Accounting Principles |
SEC? | Securities and Exchange Commission |
Why is the GAAP needed? | To determine proper accounting standards! |
Who has the final say on matters of financial reporting by publicly owned corporations? | SEC ...Securities and Exchange Commission. |
How are (GAAP) generally accepted accounting principles developed? | 1.Issue discussion 2. obtain response to discussion. 3. Issue exposure draft. 4.Obtain response to exposure draft. 5. Issue statement of principle. |
A non profit organization such as a school is a(n): | Social entity. |
An organization that has two or more owners who are legally responsible for the debts and taxes of the business is a: | A Partnership |
The Language of Business. | Accounting |
Separate Entity Assumption: | For accounting purposes, all forms of business are considered separate entities from their owners. however the corporation is the only form of business that is a separate legal entity. |
G.A.A.P. Generally accepted accounting principles are developed by? | (F.A.S.B.)Financial Accounting Standards Board |
Who is responsible for the accounting system we use today? | Luca Paciola, a Franciscan monk from Italy in 1494. |
What is an ASSET? | The property that a business owns. |
What is a LIABILITY? | The debts and obligations of a business. |
What is Owners EQUITY? | The owners financial interest. aka-Net worth |
What information is on a Balance Sheet? | Assets,Liabilities,and Owners Equity |
What is a Balance Sheet? | A financial position of a given day. |
What is a Business Transaction? | A financial event that changes the resources of the firm/business. |
Describe a transaction that increases an asset and the owners equity. | Initial investment of cash by the owner. |
What does the term Accounts Payable mean? | Amounts that a company must pay to creditors in the future. |
The Fundamental Accounting Equation. | ASSETS = LIABILITIES + OWNER'S EQUITY |
Revenue, increases owner's equity and Expenses, decrease owner's equity | True! |
Revenue | Inflow of money or other assets. |
Expense | Outflow of money or assets. |
Accounts Receivable | Amounts owed by clients. usually due in 30 days. |
Withdrawals are? | Funds taken by the owner for personal use. |
Financial Statements are? | reports that summarize a firms financial affairs. |
What information is included in the financial statement heading? | The firms name (who), the title of the statement (what), and the time period covered by report (when). |
Net Income | Results when revenue is greater than expenses. |
Net Loss | Results when expenses are greater than revenue. |
Break Even | Revenue and Expenses are equal. |
What order are financial reports generated? | 1.The Income Statement. 2. The Statement of Owner's Equity. 3. The Balance Sheet |
Fair Market Value | is the current worth of an asset or the price the asset would bring if sold. |
If an owner gives personal tools to the business how is the transaction recorded? | as an investment recorded on the basis of fair market value. |
If one side of the fundamental accounting equation is decreased, what will happen to the other? and why? | It will decrease because a decrease in assets results in a corresponding decrease in either liability or the owner's equity. |
What is the difference between buying on cash and buying on account? | Buying on cash results in an immediate decrease in cash: buying on account results in a liability recorded as accounts payable. |
What effect do revenue and expenses have on owner's equity? | Revenue increases owner's equity and expenses decrease owner's equity. |
Describe a transaction that will cause accounts payable and cash to decrease by 700 | A payment of $700 to a creditor on account. |
Why does the third line of the heading differ on the balance sheet and the income statement? | Because a balance sheet is for a given day not a given period. |
The review of financial statements to assess their fairness and adherence to GAAP is? | auditing. |
An independent accountant who performs financial audits is a | Certified Public Accountant (CPA). |
To become a CPA, an individual must? | Have a certain number of college credits in accounting course,demostrate good personal character, pass Uniform CPA exam and fulfill experience requirements and follow code of ethics. |
The entity that has final authority over the financial reporting of publicly owned corporations is the | Securities and Exchange Commission (SEC). |
The financial statements submitted by a corporation to the SEC include the auditor's report. The auditor's report: | confirms that the financial information is prepared in conformity with generally accepted accounting principles. |
The group of accounting educators who perform research to determine the possible effects on financial reporting and the economy and then offer their opinions about proposed FASB statements is the | American Accounting Association (AAA). |
The balance sheet is also called | the statement of owner's equity the income statement the statement of operations the statement of financial position |
When the owner invests cash in a business, | Assets and Equity increase assets increase and owner's equity decreases. liabilities decrease and owner's equity increases. assets and owner's equity increase |
When the owner withdraws cash for personal use | Owners equity decreases |
Types of Accounting Information | Tax,Financial,and Managerial |
Created by:
Bjones1283
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