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Describe unearned Revenue
money received by an individual or company for a something that hasn't been given yet
When do businesses do their entry adjustments?
at the end of each fiscal period
Advantages to having a maintained statement of cash flows alongside using accrual basis accounting are?
your able to see all the cashing coming in and out as well as the long term finances
Define cash flows from operating activities
indicates the amount of money a company brings in from its ongoing, regular business activities, such as manufacturing and selling goods or providing a service to customers
What 2 accounts need to be equal for every transaction?
Debits and Credits
What is the advantage accrual accounting has over cash accounting?
Accrual accounting gives a better indication of business performance
The 3 main business activities that the statement of cash flows are aligned with are what?
Operating activities, Investing activities and Financing activities
Define cash flows from Investing Activities
a section of the cash flow statement that shows the cash generated or spent relating to investment activities
Describe example of a Prepaid Expense
An example would be prepaid insurance. It's paid for being being used
Differences between cash and accrual basis of accounting are what?
The difference is the timing
The 2 things that the statement of cash flows does are what?
Cash flow from operations and Cash flow from investment
measures the movement of cash between a firm and its owners, investors and creditors
What is the purpose of a Trial Balance
To make sure the Debit and Credit column totals of the general ledger match
what are 4 key terms that an income statement focuses on?
They are Revenue, expenses,gains and losses
What does a balance sheet show? (hint there are 3 things)
A balance sheet is a statement of a business's assets, liabilities, and owner's equity as of any given date
Define Fiscal year
a year as reckoned for taxing or accounting purposes
what are 3 steps to fix accounts when trial balance comes out unequal?
Double check your math, make sure everything is put in the right way and to find the number of money that its off by
What does an income statement show?
revenues, expenses and profitability over a period of time
What is a balance sheet?
business revenue and matching expenses when they are made
Am I going to fail this test?
Yes