Accounting 4A

If equity is $30,000 and liabilities are $19,000, then assets must equal:

$49,000

Rosalind Company reported revenues of $111,500, expenses of $92,545, and net income of $18,955 for the year. Assets totaled $200,000 at the beginning of the year and $246,000 at the end of the year. The company's return on assets for the year (round the percent to one decimal) is:

8.5% (200,000+246,000)/2 = t 18955/t = 8.5%

Business Entity Assumption

A business is accounted for separately from other business entities, including its owner.

Measurement Principle

Accounting Information is based on actual cost

Identity which items belong on the statement of retained earnings.

Dividends, beginning of retained earnings, ending retained earnings

External Transactions

Exchanges of value between two entities

Internal Transactions

Exchanges within an entity.

Customers

External Users

Labor Union

External Users

Suppliers

External Users

Pressure

In the fraud triangle, when a person feels incentive to commit fraud, this is referred to as ________

The four basic financial statements are:

Income Statement, Statement of retained earnings, Balance sheet, and Statement of cash flows.

Marketing Managers

Internal Users

Purchasing Managers

Internal Users

Going Concern Assumption

Presumes that the business will continue operating in the future.

Revenue Recognition Principle

Revenue is recognized when goods are provided to the customer at the amount expected to be received

Identity which items belong on the income statement

Revenue, expenses, and net income

Time Period Assumption

The life of the company can be divided into specific time periods.

Private

The majority of accounting opportunities are in _____ accounting

During its first year of operations, Mario Lupo formed Lupo Company as a corporation and personally invested $15,000 in the business in exchange for common stock. Lupo company also paid dividends of $2,000. The company earned $35,000 of revenues and $23,000 of expenses. At the end of the year, the company's equity totaled:

$25000 (15,000-2,000+35,000-23000)

Expense Recognition Principle

A company records the expenses incurred to generate the revenue reported

Full Disclosure Principle

A company reports the details behind financial statements that would impact user's decisions

Identify which items belong on the statement of cash flows.

Cash flows from investing, operating and financing activities

Identify which items belong on the balance sheet.

Cash, accounts receivable, and common stock.

Events

Happenings that affect the accounting equation

Analyze the following transaction and select the best answer. Tyler invests $2,000 cash in exchange for common stock, to begin a new company, Tyler's Tayloring. This transaction will:

Increase of equity by $2,000

On January 31st, Jean Consulting Company recieves a bill for that month's utilities in the amount of $500. Jean sets it aside because she does not plan to pay the bill until its due date of February 15. What effect, if any, does this event have on the company's accounting equation as of January 31?

The business must record this event, which would increase liabilities and decrease equity on January 31st.

FASB (Financial Accounting Standards Board)

The organization that is primarily responsible for developing GAAP for us by all U.S companies is the:

Monetary Unit Assumption

Transactions and events are expressed in monetary, or money, units.

Managerial Accounting

_________ includes opportunities in general accounting, cost accounting and internal auditing

Accounting

an information and measurement system that identifies, records, and communicates relevant, reliable, and comparable information about an organization's business activities

Return on assets measures a company's ability to generate an adequate return on its investment in:

assets

Recordkeeping

the recording of transactions and events, either manually or electronically