Accounting Basics
What is the language of business?
Accounting
Which statement shows a company’s revenue and expenses?
Income statement
What are resources a company owns called?
called?Assets
Do assets increase with a debit or credit?
Debit
Company involved in a massive energy accounting scandal in 2001
Enron
What do accountants prepare to show financial performance?
Financial statements
Which statement shows a company’s financial position at a point in time?
Balance sheet
Money owed by a company is called what?
Liabilities
Do liabilities increase with a debit or credit?
Credit
Accounting firm that collapsed after the Enron scandal
Arthur Andersen
What accounting method records revenue when earned, not when cash is received?
Accrual accounting
Which statement reports cash inflows and outflows?
Statement of cash flows
What represents the owner's claim to assets?
Equity
A credit increases this equity account.
Capital / Owner’s equity
Retail chain involved in a 2015 accounting scandal for overstated income
Toshiba
What is the equation used in accounting?
Assets = Liabilities + Equity
What is the bottom line on the income statement called?
Net income
Land, buildings, and equipment are what type of asset?
Fixed (long-term) assets
Does revenue increase with a debit or credit?
Credit
Ponzi scheme run by this famous financier
Bernie Madoff
What is an organization that audits public companies in the U.S.?
The SEC (Securities and Exchange Commission)
The statement showing changes in owners' value over time is called what?
Statement of owner’s equity
Accounts receivable is which type of asset?
Current asset
Expenses increase with a debit or credit?
Debit
Biggest corporate fraud in India’s history (2009)
Satyam Computers