Role of Accounting/Ethics
Financial accounting provides _____ users with information
External
Name an asset account
Cash
Account Receivable
Land
Supplies
ETC.
Financial statement should be measured in what unit? (unit of measure concept)
Equity = ?
=Assets - Liabilities
Assets = ?
Liabilities + Equity
Managerial Accounting provides _____ users with information
Internal
Name a Liability account
Account Payable
First Health is what type of business?
Service
What two items increase equity?
Owner's Investment & Revenue
Assets are 600 and liabilities are 502. What is Equity?
98
Name 2 external users for financial statements
investors
Creditors/banks
Government
Purchased supplies on account (Element & Account & Increase/Decrease)
Asset - Supplies - increase
Liability - Account payable - increase
A warehouse was listed at 140,000. The first company offer was 120,000. A second company offered 125,000 and a third company swooped in at the last minute for $129,000. The third buyer overpaid since it was appraised at 112,000. For what price would the third buyer record the purchase of the warehouse?
129,000
What two items decrease owner's equity?
Owner's withdrawal and expenses
Year 1: Assets: 873; Liabilities: 298
If Assets increase by 50 and liabilities decrease by 18 in Year 2, what is equity?
643
True/False: Bankruptcy is the only consequence of unethical handling of financial statements.
False: Executives plead guilty, large fines
Company A paid $500 to company B for an invoice. You are Company A. (Element - Account - Increase/Decrease)
Asset - Cash - Decrease
Liability - Account Payable - Decrease
FALSE
Net income (Loss) = ?
Revenues - Expenses
What does GAAP stand for?
Generally Accepted Accounting Principles, created by Financial Account Standards Board (FASB)
Certification required to work in public accounting
CPA: Certified Public Accountant
We collected $450 for past revenue that was on account (Element - Account - Incease/Decrease)
Asset - Cash - increase
Asset - Account Receivable - decrease
Burt's Bees is what type of business?
Manufacturing
What is the owner's investment account called?
Owner's Capital
What does IFRS stand for?
International Financial Reporting Standards created by International Accounting Standards Board (IASB)