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