Financial Accounting Exam 1 misc.

Time period assumption

A broad principle that requires identifying the activities of a business with specific time periods such as months, quarters, or years is the

Matching principle

A company records the expenses incurred to generate the revenues reported.

Full disclosure principle

A company reports details behind financial statements that would impact users' decisions.

Chart of accounts

A list of all accounts used by a company and the identification number assigned to each account is called a

A ledger

A record containing all accounts (with amounts) for a business.

Adjusting entries

Affect both income statement and balance sheet accounts.

General accounting principle

Derived from long-used and generally accepted accounting practices.

$3,800

During the month of February, Hoffer Company had cash receipts of $9,300 and cash disbursements of $10,700. The February 28 cash balance was $2,400. What was the January 31 beginning cash balance?

Business entity assumption

Every business is accounted for separately from its owner or owners.

Accrued expenses

Expenses incurred but unpaid that are recorded during the adjusting process with a debit to an expense and a credit to a liability are:

Going-concern assumption

Financial statements reflect the assumption that the business continues operating.

Cost principle

Information is based on actual costs incurred in transactions.

Production managers

Internal users of accounting information include:

Unearned revenues

Liabilities created when a customer pays in advance for products or services before the revenue is earned.

Profit margin

Net income divided by net sales.

Return on Assets

Net income/Average total assets

Revenue recognition principle

Revenue is recorded only when the earnings process is complete.

30.1%

Stride Rite has total assets of $515 million. Its total liabilities are $155 million. Its equity is $360 million. Calculate the debt ratio.

A debit

The left-hand side of a T-account.

Posting

The process of transferring general journal information to the ledger is

Revenue recognition principle

The question of when revenue should be recognized on the income statement (according to GAAP) is addressed by the

primary purpose of accounting

To identify, record, and communicate business transactions.

A liability on the balance sheet

Unearned revenue is reported on the financial statements as

Specific accounting principle

Usually created by a pronouncement from an authoritative body.

Cash

What account would not be impacted by adjusting journal entries?

Fees Earned

Which of the following accounts would be closed at the end of the accounting period? Unearned Consulting Fees Retained Earnings Fees Earned Accounts Receivable Land

Land

Which of the following assets is not depreciated? Buildings Computers Land Store fixtures Vehicles

$2,625

a. Received $1,800 cash for services provided to a customer during July. b. Received $3,100 cash investment from Barbara Hanson, the owner of the business. c. Received $1,200 from a customer in partial payment of his account receivable, which arose from sales in June. d. Provided services to a customer on credit, $825. e. Signed a promissory note for a $9,600 bank loan. f. Received $1,700 cash from a customer for services to be rendered next year.