ACC 224 -- Exam 1
Income Statement
A financial statement showing the revenue and expenses for a fiscal period.
Statement of Cash Flows
A financial statement that provides financial information about the cash receipts and cash payments of a business for a specific period of time.
Balance Sheet
A financial statement that reports assets, liabilities, and owner's equity on a specific date.
Unearned Revenue
A liability representing a company's obligation to provide goods or services to customers in the future.
Financial Statement
A summary of all the transactions that have occurred over a particular period.
A = L + SE
Accounting Equation
Credit
An arrangement to receive cash, goods, or services now and pay for them in the future.
Debit
Any transaction that increases the assets of a firm or reduces liabilities.
Accrued Expense
Expenses incurred but not yet paid in cash or recorded.
Financial Accouting
External users of accounting information
1. income statement 2. statement of changes in stockholder's equity 3. blance sheet 4. statement of cash flows
Four Financial Statements
GAAP
Generally Accepted Accounting Principles, Accounting rules that are used universally
Financial Accounting Standards Board
Group that has the primary responsibility for establishing generally accepted accounting principles
IASB
International Accounting Standards Board, board that consists of accountants from different countries that develop accounting rules
Accounts Receivable
Money an organization's customers owe the organization.
The General Journal
Most often used by a business each entry represents a different bus transaction which is recorded only once
Prepaid Items
On a closing statement, items that have been paid in advance by the seller, such as insurance premiums and some real estate taxes, for which he or she must be reimbursed by the buyer.
Accounting is an information system that reports on the economic activities and financial condition of a business or other roganization
Role of Accounting in Society
Revenue and Expenses
Types of Transactions
Accouting Period
a company's operations that occurred over a span of time called this
Transaction
a particular kind of event that involves transferring something of value between two entities.
Trial Balance
a proof of the equality of debits and credits in a general ledger
Accounts Payable
amounts that a firm currently owes to other parties
Accounting Event
an economic occurrence that changes an enterprise's assets, liabilities or stockholder's equity.
Net income
if revenue exceed expenses, the difference is called this.
Net Loss
if the expenses are greater than revenues, the differences is this.
Adjusting Entries
journal entries recorded to update general ledger accounts at the end of a fiscal period
Income statements
match revenue (benefits) with the expenses (sacrifices) that were incurred to generate the revenue
Horizontal Financial Statements Model
shows a set of financial statements horizontally across a single page of paper
Managerial accounting information
the accounting information needed by internal users, stakeholders such as managers and employees who work within a business, is provided by this.
Revenue
the economic benefit a company derives from providing goods and services to its customers is called this.
Matching concept
the practice of pairing revenues with expenses on the income statement is called this.
Adjusting the Accounts
updating the accounts at the end of the period
The Closing Process
verify contract fulfillment; exchange consideration and title; pay expenses; sign final documents; arrange for recording the transaction
Double-Entry bookkeeping
when all transactions affect the accounting equation in at least two places.
