Financial Statements
This financial statement shows a company’s revenues and expenses over a period of time.
Income Statement
This is the first step in the accounting cycle.
Analyze Transactions
Debits are always recorded on this side of a T-account.
This principle records assets at their original purchase price
Historical Cost Principle
The Sarbanes–Oxley Act assigns primary responsibility for internal controls to this group
Management
The equation for this statement is: Assets = Liabilities + Stockholders’ Equity.
Balance Sheet
Adjusting entries are completed only at this time.
At the end of the accounting period
Which type of common accounts are decreased by a debit?
Liabilities
The assumption that a company will continue to operate long enough to meet obligations.
Going Concern Assumption
Having the same employee prepare and sign checks violates this control principle
Segregation of duties
Decreases the statement of retained earnings
Net Loss & Dividends
The last step of the accounting cycle is to do this.
Close the Accounts
Which type of common accounts are decreased by a credit?
Assets
The principle that expenses should be recorded in the same period as the revenues they help generate.
Matching Principle
Procedures for proper approval of transactions are called ____
Authorization controls
This statement reports cash changes from operating, investing, and financing activities.
Statment of Cash Flow.
This step involves the general ledger.
Posting
Revenues and stockholders’ equity normally have this type of balance.
Normal Credit Balance
The importance of an omission or misstatement that could influence a decision maker is called ___
Materiality
The foundation of an internal control system is the control
Environment.
The accumulated net income of a company that has not been distributed to owners in the form of dividends
Retained Earnings
This type of accounting recognizes revenues when earned and expenses when incurred.
Accrual-basis accounting
Recording a payment of salaries decreases these two accounting elements.
Assets and Stockholders’ Equity
When two estimates are equally likely, accountants select the least optimistic. This is called ___
Conservatism
Internal control systems aim to ensure these three objectives: operations, reporting, and ____
Compliance