ACCOUNTING CHAPTER 1
Current Liabilities- CLASSIFICATION
Balance Sheet. Accounts Payable and Interest Payable.
Long-Term Assets- CLASSIFICATION
Balance Sheet. Building, Land, Patent and Note Receivable from customer due in 5 years.
Current Asset- CLASSIFICATION
Balance Sheet. Cash, Interest Receivable and Inventory
Owner's Equity- CLASSIFICATION
Balance Sheet. Common Stock and 1000 Shares in Microsoft Stock.
Balance Sheet
A financial statement designed to show the ending amounts of a company's assets, liabilities, and owners' equity.
Which of the following is the ratio for calculating the current ratio?
Current Assets / Current Liabilities
What does GAAP stand for? Explain
Generally Accepted Accounting Principles
Current Assets
Something that you own. An asset likely to be used or consumed within one year.
Statement of Owner's Equity
The financial statement designed to show the changes to owners' equity during a specified time period.
Net Income
An increase in the owners' equity as a result of the firm's ongoing operations.
What is the accounting equation?
Assets = Liabilities + Owner's Equity (ALOE)
If the Debt to Equity Ratio is greater than 1 it means
The company is using more of its assets to finance its debt
Wal-Mart is an example of which of the following?
merchandising firm
The Debt to Equity Ratio is measure with which of the following?
Total Liabilities / Total Stockholders' Equity
A business owned by two or more individuals whose personal possessions are at risk if the business fails is called a:
partnership
A business owned by one person whose personal possessions are at risk if the business fails is called a:
sole proprietorship
Long-Term Liabilities- CLASSIFICATION
Balance Sheet. Note Payable (due in 10 years)
Describe the three primary ownership structures and discuss the advantages and disadvantages of each.
Sole Proprietorship, Partnership and Corporation
Current Liabilities
A liability likely to be paid or otherwise discharged within one year.
Current Ratio
A measure of company liquidity; the relationship between current assets and current liabilities. Current assets divided by current liabilities.
Return on Sales Ratio
A measure of company profitability; the relationship between net income and sales.
dept to equity ratio
A measure of company solvency and its ability to meet its long-term obligations. Total liabilities/total equity.
Revenue- CLASSIFICATION
Income Statement
Expense- CLASSIFICATION
Income Statement. Salary Expense and Interest Expense.
Which of the following would best describe the type of business Disney operates?
Service, Merchandising, and Manufacturing
Statement of Cash Flows
The financial statement designed to show the cash inflows and cash outflows of the company for a period of time.
The accounting concept requiring that an accounting system reflect information relating only to those economic events pertaining to a particular entity is the:
business entity concept
The accounting concept which assumes that, absent any information to the contrary, the business will continue into the foreseeable future is the:
going concern concept
The accounting concept which asserts that money is the common measurement unit for economic activity is the:
monetary unit concept
The accounting concept requiring that the profits of a business be determined at regular intervals throughout the life of the business is the:
periodicity concept
A law firm is an example of which of the following?
service firm