Acc 301 test 1
balance sheet format
Assets: Current Assets Long-term Investments PPE Intangible Liabilities & Shareholder's Equity: Current Liabilities Long-term Debt Stockholder's Equity
DEALOR
Dividends Expenses Assets Liabilities Owner's Equity Revenue
who develops accounting standards
FASB
net income equation
Revenues - Expenses = Net Income
what does SEC stand for
Securities and Exchange Commission
accounting equation
assets= liabilities equity
closing entries
bringing the balance to 0
current assets (5)
cash short-term investments accounts receivable inventory prepaid expenses
salvage value equation
cost- salvage value/ # of useful years
income summary
difference between revenue and expenses
intangibles (5)
goodwill patents trademark franchises copyright
goal of accounting
help users make rational decisions
relevance
info must be able to make a difference in the decision
the accounting cycle
journalization posting trial balance adjustments adjusted trial balance financial statements closing entries post-closing trial balance reversing entries
long term liabilities (3)
long term debt obligations capital lease deferred income taxes
earnings per share equation
net income - preferred dividends / weighted average common shares outstanding
if you sell an unrecognized gain or loss it will go to the ______
non-operating section
current liabilities (6)
notes payable accounts payable accrued compensation unearned revenue income tax payable current maturities LT debt
income statement format
operating section non operating section income tax irregular items net income earnings per share
types of adjusting entries (4)
prepayments: prepaid expenses unearned revenues accruals: accrued revenues accrued expenses
what does SEC do
regulates the market to prevent crashes
what are the two most fundamental qualities
relevance and faithful representation
temporary accounts
revenue, expenses, dividends, income summary
Multi-Step Income Statement
sales cost of goods sold operating expenses other gain/loss income taxes irregular items
long term investments (4)
securities tangible fixed assets special funds non consolidated funds
income statement
shows company's revenue for a period of time
balance sheet
snapshot of financial status to see what they owe and own
a liability is
something that is owed
liability
something the company owes to its creditors
how to calculate income tax
tax rate x income at end of non operating section
equity
the difference between assets and liabilities, ownership assets in the company
faithful representation
the numbers and descriptions have to match what actually happened
how many steps are in the accounting cycle
10
