Accounting Terms
What are the 4 types of financial statements?
Income Statement
Retained Earnings Statement
Balance Sheet
Statement of Cash Flow
What are the 3 types of ratios?
Profitable
Liquidity
Solvency
What 2 accounts will you use?
Cash and Common Stock
What accounts are Debits?
Assets
Dividends
Expenses
Assets
Liabilities
Stockholder's Equity
Revenues
Expenses
What shows the amount and causes of change during a period?
Retained Earning Statement
What is the formula for Earnings Per Share?
EPS= (Net Income - Preferred Dividends) / (Weighted-Average Common Shares Outstanding)
Cash and Dividends
What accounts are credits?
Liabilities
Common Stock
Revenue
Retained Earnings
What is one purpose of trial balances?
- To uncover errors in journalizing and posting
-Useful in preparation of financial statements
What financial statement reports assets and claims to assess at a SPECIFIC point in time?
Balance Sheet
What does Free Cash Flow equal?
Net cash provided by operating activities - capital expenditures - cash dividends
Analyzing business transactions is part of what system?
Accounting Information systems
When debits increase what decreases?
Credits
Assets = Liabilities + Stockholder's Equity
What result do you have when revenue exceeds expenses?
Net Income
What is the formula for Working Capital, and what type of ratio is it?
Working Capital= current assets - current liabilities
It is a liquidity ratio
What accounts will you use?
Cash and Unearned Service Revenue
When credits increase what decreases?
Debits
If you were completing a trial balance, would you debit or credit notes payable? Why?
Credit it because it's a liability
What does GAAP stand for, and what does is mean?
General Accepted Accounting Principles
- A set of accounting rules and practices that have authoritative support
For 2017 Stone Rock Corporation reported a net income of $26,000; net sales $400,000; and average shares outstanding of $6,000. Their preferred stock dividends were $2000. What is the 2017 earnings per share?
(26000-2000) /6000 =$4.00
On October 9th Sierra company hired 4 new employees to begin work on October 15th.
What accounts will you use?
No account, because no accounting transaction has occurred.
Debits must equal what?
Credits
A trial balance will not balance if?
a $100 cash dividend is debited to the dividends account for $1000 & credited to cash for $100