ADAPTIVE LEARNING: Accounting and Financial Statements

(1) Stockholders and investors (2) Lenders and suppliers (3) Government agencies

(1) Evaluating a firm's health to determine if the firm is profitable (2) Evaluating a firm's credit ratings (3) confirming taxes and regulatory compliance

(1) Collection (2) recording (3)Classification (4) Summarization (5) Reporting (6)Analysis

(1) Finding unorganized business transactions (2) Creating Journal entries (3) Creating an accounting ledger (4) Running a trial balance (5) Issuing financial statements (6) Conducting a ration analysis

(1) Collection (2) Recording (3) Classification (4) Summarization (5) Reporting (6) Analysis

(1) Locate and sort record s (2) Log daily transactions in journals (3) organize journal entries in categories (4) test the accuracy of the ledger (5) issue financial statements (6) Assess the firm's financial condition

(1) Private= (2) Public = (3) Not-for-profit =

(1) internal accountants who work for a single organization (2) Accountants who provide accounting services to clients on a fee basis (3) Accountants who work for government organizations

What are public accountants

- Accountants who provide accounting services to clients on a free basis

The purpose of financial accounting is to record and review a company's financial information and then submit the findings to which of the following groups?

- Decision makers outside an organization - The federal government

Which activities are part of the collection step in the six-step accounting process?

- Locating Various business expenses in the organization - sorting expenses into the categories

What is the definition of financial accounting?

- Preparing information and analyses for people outside an organization

How are public and private accountants different?

- Public accountants work with many clients, whereas private accountants work for a single organization

Th purpose of financial accounting is to record and review a company's financial information and then submit then findings to which of the following groups?

- The federal government - Decision makers outside an organization

Which role(s) do accountants play in business organizations?

- They record financial information and ensure its accuracy - They prepare budgets and check compliance or deviation

What purpose does managerial accounting serve?

- To prepare and monitor department and company-wide budgets - To inform decision makers inside an organization - To manage and control inventory and production costs

According to the generally accepted accounting principles (GAAP), what are the characteristics of financial statements?

- consistent - relevant - comparable - reliable

Which activities are part of the recording step of the accounting process?

- double-entry bookkeeping is used to check for errors - Financial data are entered into a journal or record book.

What purposes does financial accounting have?

- to prepare and file taxes and other documents for government agencies - To inform decision makers outside an organization - To perform audits to ensure accuracy of the financial information

What are the steps of the accounting process in order?

1. collection 2. Recording 3. Classification 4. Summarization 5. Reporting 6. Analysis

Order the steps of the accounting process from the first at the top to the last at the bottom.

1. collection 2. recording 3. Classification 4. Summarization 5. Reporting 6. Analysis

What is the definition of transaction?

A business deal that involves the buying, selling, or exchanging.

What is a trial balance?

A measure of the accuracy of financial information

What is a journal?

A record book or part of a computer program containing the daily record of a firm's transactions

What is the accounting process?

A six-step process that converts information about individual transactions into financial statements

What is a ledger?

A specialized record book or computer program that contains summaries of all journal entries

Which activity takes place during the summarization step of the accounting process?

A trial balance is run to check for accuracy.

What is an annual report?

A year-end summary of a firm's financial condition and outlook for the future

What are not-for-profit accountants?

Accountants who work for governments and nonprofit organizations

The process of converting information about individual transactions into financial statements for analysis is called the ______ process

Accounting

What is the definition of a credit?

An entry recording a sum received

Assessing a firm's financial condition is part of which step of the accounting process?

Analysis

A year-end report that shows a firm's financial condition and outlook for the future is known as a(n)______ report

Annual

Organizing journal entries in categories within a ledger is part of which step of the accounting process?

Classification

Locating and sorting records is part of what step of the accounting process?

Collection

In order to ensure that data can be compared with other companies' data and with prior, financial information must be___

Comparable

In order to ensure that the same assumptions and procedures are always used, financial information must be______

Consistent

What are expenses?

Costs incurred as part of a company's operating activities

An entry recording a sum received is known as a(n)______

Credit

The process of recording a transaction in two different accounts is known as a(n)

Debit

Managerial Accounting primarily serves _______

Decision makers inside an organization

Managerial accounting primarily serves ______

Decision makers inside an organization

The process of recording a transaction in two different accounts is known as________ - entry bookkeeping

Double

Which group would find managerial accounting information useful?

Employees

Costs incurred as part of a company's operating activities are known as

Expense

When accountants analyze items in a balance sheet, what do they obtain that is helpful for managing a business?

Financial rations that indicate the company's performance

What does GAAP stand for?

Generally Accepted Accounting Principles

What are private accountants:

Internal accountants working for a single organization

Why is comparability in financial information important?

It allows users to compare data with other companies' data and within prior data from the company.

Why is consistency in financial information important?

It ensures that the information is always based on the same assumptions and procedures

Why is reliability in financial information important?

It makes the information accurate, objective and verifiable

A record book or part of a computer program containing the daily record of a firm's transactions is known as a(n)

Journal

A specialized record book or computer program that contains summaries of all journal entries is known as a(n)

Leger

Kurt is a production manager who uses sales forecasts to set a production levels. What type of accounting information would benefit him most.

Managerial accounting

Irina has determined that as of September 30, her firm had $2,000 in retained earnings and $25,000 in common stock. In what section of the company's balance sheet would that data be listed?

Owners' equity

What is the definition of managerial accounting

Preparing information and analyses for managers and other decision makers

Farsheed works in the accounting department of an automotive company. What type of accountant is he?

Private

What occurs during the analysis step of the accounting process?

Ratios are calculated and evaluated.

Logging daily transactions in journals is part of which step of the accounting process? Multiple choice question.

Recording

What is a necessary procedure in the double-entry accounting system? Multiple choice question. Making

Recording each transaction as both a debit and a credit

In order to help users understand the company's financial statues and performance, financial information must be_____

Relevant

In order to ensure accuracy, objectiveness, and verifiability, financial information must be ____

Reliable

Issuing financial statements is part of which step of the accounting process?

Reporting

Which group benefits more from financial accounting information than managerial accounting information

Stockholders

What is a fiscal year?

The 12-month period designated for the purpose of annual financial reporting

What is the definition of double-entry bookkeeping? Multiple choice question.

The process of recording a transaction in two different accounts

What is the definition of a debit?

The recording or entry of debt in an account

Why is it important to use a double-entry accounting system?

To check for errors

A business deal that involves the buying, selling, or exchanging of something, usually goods or services, is called a(n)_______

Transaction

What occurs during the classification step of the accounting process? Multiple choice question.

Transactions are transferred to a ledger.

The recording or entry of debt in an account is known as a(n)

debit

Why is relevancy in financial information important?

it helps users understand the company's financial and performance

What are the four characteristics of financial statements, according to the generally accepted accounting principles (GAAP)?

relevant, reliable, consistent, and comparable

Issuing financial statements is part of which step of the accounting process?

reporting

What is the definition of a debit?

the recording or entry of debt in an account

A measure of the accuracy of financial information is known as a(n)

trail