accounting

Place the four steps to completing closing entries in order, Close the Income Summary and transfer the balance to the Retained Earnings account. Close all Expense accounts and transfer the balances to the Income Summary. Close all Revenue accounts and transfer the balances to the Income Summary. Close Drawings and transfer the balance to the Retained Earnings account.

3,2,1,4

Number the steps of balancing a T-account in order. Add all of the numbers on the credit side, Record the results as the final line on the normal balance side of the account, Determine whether the account normally carries a debit or credit balance, Add the numbers on the debit side, Subtract the non-balance side from the balance side.

3,5,1,2,4

Place the steps of the accounting cycle in order from 1 to 7. Trial Balance, Financial Statements, Source Documents, Closing Entries, Journal, Ledger, Adjusted Trial Balance

4,6,1,7,2,3,5

A financial analysis helps important people at a company understand [A] What the numbers on the financial statements mean to the company.[B] What the numbers on the financial statements are.[C] That there are four elements to a financial statement.

A

Debits and credits are system of false used to record transactions. (Check one) A) math B) notation C) language D) signs

A

Liquidity is[A] A company's ability to maintain positive cash flow while paying immediate obligations.[B] A company's ability to stay in business in the long-run without major loss.[C] A company's ability to pay debt in the long-term.[D] A company's ability to earn money and grow.

A

Sole proprietorship

A business owned by one person who typically runs and manages the business.

LLC

A new type of business structure that combines the benefits of a partnership and corporation.

The Statement of Cash Flows helps [A] Investors, [B] Creditors, [C] Other parties:

A,B,C

Which of the following errors will the trial balance NOT catch? A) Transactions that were not recorded in the journal B) Transactions recorded in the wrong accounts C) Transactions for which the debit and credit were switched

A,B,C

Accounting includes (Check all that apply) A) Logging financial transactions B) Interviewing clients C) Making deliveries D) Running reports E) Interpreting reports F) Building maintenance

A,D,E

Corporation

An organization that is made up of many owners who normally are not active in the decision-making and operations of the business.

A transaction is

Any event or activity that can be measured in terms of money.

The accounting equation

Assets = Liabilities + Equity.

A Balance Sheet is comprised of the elements in the accounting equation

Assets, Liabilities, and Equity.

Stability is [A] A company's ability to maintain positive cash flow while paying immediate obligations. [B] A company's ability to stay in business in the long-run without major loss. [C] A company's ability to pay debt in the long-term [D] A company's ability to earn money and grow.

B

The objective of a financial statement is to provide A) Employee satisfaction B) Company performance C) Financial position D) Customer satisfaction E) Changes in financial position:

B,C,E

Is a financial statement that provides information about a company's present condition.

Balance Sheet

Solvency is [A] A company's ability to maintain positive cash flow while paying immediate obligations.[B] A company's ability to stay in business in the long-run without major loss.[C] A company's ability to pay debt in the long-term. [D] A company's ability to earn money and grow.

C

Profitability is [A] A company's ability to maintain positive cash flow while paying immediate obligations. [B] A company's ability to stay in business in the long-run without major loss. [C] A company's ability to pay debt in the long-term.[D] A company's ability to earn money and grow.

D

Mark each item with either a D or an A, depending on whether the item would be a deferral or accrual item: Depreciation, Past-due expenses, Salaries, Office supplies, Unearned revenue, Unbilled revenue:

D,A,A,D,D,A

Trial balances proves

Debit values = Credit values

List a common error that can causes a trial balance to be incorrect

Error in the journal entry - which could be error in numeric value or omission of part of a journal entry

Adjusting entries are made throughout the accounting period to even out the debit and credit balance. True or False

False

An Income Statement is a financial tool that provides information about a company's future performance. True or False

False

Other factors that contribute to a company's financial analysis include past performance, present performance, and comparative performance. True or False?

False

GAAP stands for

Generally Accepted Accounting Principles .

What are the four major financial statements?

Income Statement, Balance sheet, Statement of Cash Flows, Statement of Owners Equity

What is a closing entry?

Journal entries made at the end of an accounting cycle, to set the balance of temporary accounts to zero for the next accounting period.

What taxes need to be properly reported and paid?

Local, State, Federal, & Employee

Blank use accounting information to measure performance. Business owners use accounting information to create budgets and make business decisions. Blank use accounting information to make investment decisions.

Managers & Stakeholders

Income Summary is a temporary account that will contain

Net Income.

Deferral

Revenues and expenses that are matched to dates after the transaction has occurred.

Accrual

Revenues and expenses that are recorded before the transaction has occurred.

Accounting is

The process of keeping track of a business's finances

A trial balance is a list of all general ledger accounts contained in the ledger of a business. True or False?

True

Accounting affects the different types of businesses because taxes are handled differently, it does not affect the ability to gain money, and it can affect initial and recurring costs. True or False?

True

Accounting shows how much money the business has, how much it owes, and how much is owed by others. True or False?

True

Each account that is used can be classified as an asset. True or False?

True

In the double-entry method, each transaction must change two accounts. True or False?

True

The Statement of Cash Flows is concerned with the flow of cash in and out of the business during a specific period. True or False

True

Partnership

Two or more people who share the ownership of a single business.

Ledger

a collective term for the accounts of a business. They are also often referred to as T-accounts

A financial statement is

a formal record of the financial activities of a business.

Trial Balance

a sheet that displays all of the accounts and tests whether or not the entire debit balances equal the total of all the credit balances

Every transaction relates to an

account

Assets

an item of value owned by a company.

Journal

chronological (date-ordered) records of transactions, which are the first basic entry of debit and credit for each transaction

Notes Payable

debt, such as bank loans

Source Documents

documents that serve as proof of a transaction

For the trial balance to be correct, the debits and credits must be

equal.

Adjusted Trial Balance

involve bringing an asset or liability account to its proper amount and updating the corresponding revenue or expense account

Retained Earnings

is a permanent account that is a reflection of the money a company has earned

Debits are always recorded on the blank side and credits are always recorded on the blank side.

left & right

Revenue

money earned from selling products and services

Cash

money on hand or in bank

Accounts Receivable

money owed to business for service or merchandise

Expenses

money paid for products and services

Accounts Payable

money the business owes

Closing Entries

must be made to close out the revenue and expense accounts and bring them to zero so that the cycle can begin again

The final number on the Income Statement is

net income.

Liabilities

obligations of the business to transfer something of value to another party.

The Statement of Owner's Equity

reports how much the company is worth at the time the balance sheet is issued

The temporary accounts that need to be set to zero are

revenue, expense, drawing.

Financial Statements

statement prepared using the corrected account balances (such as balance sheet and income statement)

Equity

the value of a company to its owner(s).

Contributions

value of assets contributed by the owner

Merchandise

value of property the company has for sale