Accounting Basics
Assets = Liabilities + Equity
What is the the accounting equation?
Account used to record the owner's investment in the business.
What is the Owner Capital account?
The first products received are the first products sold.
What is first in first out (FIFO)?
Resources a company owns or controls?
What are assets?
The approach to preparing F/S based on recording revenues when products and services are delivered and expenses when incurred.
A framework for spotting high-risk fraud situations.
What is the Fraud Triangle?
Name three current assets.
What are cash, A/R, equipment, inventory, supplies,etc?
Buyer pays the freight?
What is FOB shipping point?
Creditors claims on assets.
What are liabilities?
This is when you record expenses.
What is when they are incurred?
Lenders, shareholders, and customers are these users not directly involved in running the organization.
What are External Users?
The 3 account categories with a normal credit balance.
What are liabilities, owner capital/equity, and revenue?
DAILY DOUBLE: The last products received are the first products sold.
What is last in first out (LIFO)?
Amounts to be paid in the future for goods or sesrvices already acquired.
What is accounts payable?
This is when you record revenue.
What is when it is earned?
Officers, managers, sales staff, and controllers are users involved directly in managing operations.
What are internal users?
The original book of entry for a transaction.
What is the General Journal?
Inventory should be recorded at this in order to be in accordance with GAAP.
What is lower of cost or market (LCM)?
Prepaid insurance is this type of account.
What is an asset?
The expense of allocating the cost of equipment to the periods in which it is used.
What is Depreciation Expense?
A common set of accounting rules, standards, and procedures issued by the Financial Accounting Standards Board.
What is Generally Accepted Accounting Principles (GAAP)?
Transferring journal entries to the ledger is called _______.
What is posting?
Beginning inventory + Purchases - Ending inventory = this.
What is cost of goods sold?
The total amount of money owed to your business falls under this account.
What is accounts receivable?
The two types of adjusting journal entries.
What are accruals and deferrals?