Accounting 200 Chapter 1 & 2 quiz
Asset
Anything of value that is owned, expected to benefit the company
Where does accounts payable go?
Balance Sheet under liabilities
Where does accounts receivable go?
Balance sheet under Assets
Where does inventory go?
Balance sheet under assets
Where does Notes payable go?
Balance sheet under liabilities
Where does Common stock go?
Balance sheet under stockholders equity
Income statement
a report of revenue, expenses, and net income or loss from operations for a specific period -Revenues -expenses -net income
Operating
activities related to running the business to earn profit (from everyday activities)
Expenses
all costs of doing business that are necessary to earn revenues ex. rent, salaries, insurance
Debit
an amount recorded on the left side of a T account
credit
an amount recorded on the right side of a T account
Where does equipment go?
balance sheet under assets
Where does prepaid rent go?
balance sheet under assets
Where does wages payable go?
balance sheet under liabilities
Financing
borrowing from the bank, repaying loans, receiving cash from stockholders for company stock Activities: 1. borrowing from creditors= long term liabilities (loans) 2. amounts received from its owners(stock holders) (contributions)
original cost
cost of an asset at the time of purchase
Revenues
earned by selling goods or services to customers
retained earnings
equity earned by the company -profits that have accumulated over a period of time
Common stock
equity paid in by stockholders
stock holders equity
owners claim on the business Common Stock & retained earnings
Statement of Retained Earnings
Reports the way that net income and the distribution of dividends affected the financial position of the company during the accounting period. -beginning balance of retained earnings + net income(or - net loss) - dividends = ending balance of retained earnings
Where does retained earnings at the beginning go?
Statement of retained earnings being added
Where does dividends go?
Statement of retained earnings being subtracted
Where does income tax expense go?
Income statement under expenses
Where does interest expense go?
Income statement under expenses
Where does office expenses go?
Income statement under expenses
Where does salaries and wages expenses go?
Income statement under expenses
Where does utilities expense go?
Income statement under expenses
Where does service revenue go?
Income statement under revenue
Where does Cash (balance on January 1, 2016) go?
On statement of cash flows but is not part of O,I,F
Where does Cash (balance on December 31, 2016) go?
-On statement of cash flows but is not part of O,I,F -Balance Sheet under Assets
Journal Entries
-date included for every transaction -debit first then credit below and indented -debits must equal total credits
Financial statements
1. Income Statement 2. Statement of Retained Earnings 3. Balance Sheet 4. Statement of Cash Flows
Liabilities
Amounts owed to creditors
Accounting
A system of analyzing, recording, and summarizing the results of a business's activities and then reporting the results to decision makers.
Investing
Activities involving buying and selling resources with long lives (more than 24 months), investing in others or lending to others ex. buildings, land, tools, equipment
Financial statements rules they follow
USA- GAAP: General Accepted Accounting Principles Outside USA - IFRS: International financial reporting standards
Balance Sheet
reports the amount of assets, liabilities, and stockholders' equity of an accounting entity at a specific point in time -Assets = liabilities + stockholders equity
Statement of Cash Flows
reports the operating, investing, and financial activities that caused increases and decreases in cash during the period.
Net Income (same thing as profit)
revenues - expense
fair value
the value of an asset today
Notes payable
when a company borrows and asset and has to sign a promise to repay
