Vocab
Why don't we adjust for inflation?
Monetary Unit Assumption
On Aug 1st. SI Inc. prepaid rent for the next 12 months for $600. What is the journal entry on Aug 1st
Dr. Prepaid Rent Expense 600
Cr. Cash 600
What makes something a current asset or noncurrent asset
Used in 1 year
What is the difference between a gain and loss
Name three accounts in the financing section of the statement of cash flows
C/S
T/S
Long Term Debt
Dividends Paid
What is the revenue recognition principle?
Revenue is recognized when earned
SI Inc employees earned $50,000 of wages to be paid next year. What will the Dec 31st entry be?
Dr. Wages Expense 50,000
Cr. Wages Payable 50,000
A stock buyback, on SHE side of B/S
What is the EPS formula?
(net Income - Prefered Dividends)/ Weighted Average of common shares outstanding
If A/R increased during the year, how will this affect the statement of cash flows (both section and amount)
Decrease in cash flows
What are the 2 fundamental qualities of accounting
Relevance and Faithful Representation
On Aug 1st. SI Inc. prepaid rent for the next 12 months for $600. What is the journal entry on Dec 31st
Dr. Rent Expense 250
Cr. Prepaid Rent 250
How does one find Retained Earnings?
Begining R/E + N/I - Dividends
Which prinicple/assumtion requires us do make non controlling interest adjustments?
Economic Entity
What are the steps in making the operating section of the SOCF?
Net Income
+ Non Cash Expenses
- Gains + Losses
+ Increase in Liabilities/ Decrease in Assets
- Decrease in Liabilities/ Increase in Assets
What is comprehensive income?
Change in equity (net assets) of an entity during a period from transactions and other events and circumstances from nonowner sources
On May 1st, SI Inc. received $5,000 for services to be performed over the next 2 years. What is the Dec 31st entry
Dr. Unearned Revenue 1,667
Cr. Revenue 1,667
(5,000*8/24)
Using the balance sheet, what are the current total assets for 2021?
85,000
cash, a/r, inventory
Which types of accounting events do you have to retroactivly change?
Errors and Principles
Using the balance sheet in front of you, how much was paid in dividends this year
5,000
Name and describe the four enchasing qualities of accounting
Comparability- Look similar to others
Verifiability- Your numbers work, and can be verified
Timeliness- Is useful right now
Understandability- People can read them and make sense
Using the information in Question 1, what is the journal entry to close income summary
Dr. Income Summary 74,500
Cr. Retained Earnings 74,500
100-20-1-4.5
Using the balance sheet, how should Long Term Debt be split up across current and non current?
Current Portion of LTD- 9,000
LTD (Non Current) - 81,000
What is net income after disposing of discontinued operations for the year using question 3)
$530,000
Using the balance sheet in front of you, what is the cash flows from operating activities
41,000