Financial Statements
The financial statement that presents on a company's results of operations
What is the Income Statement?
The accounting equation
The term for when revenue or expenses are earned or incurred first, and cash is exchanged later is known as _____
The term for when revenue or expenses are earned or incurred later, and cash is exchanged first is known as _____
What is an Accrual and Deferral?
Any inflow or outflow of cash for revenues and expenses will generally be this kind of cash flow activity
What is an Operating activity?
These are examples of stakeholders that are interested in accounting information. (Name at least 3)
What is investors, creditors, government regulators, financial analysts, attorneys, management, employees?
Known as a SNAPSHOT of the business's assets, liabilities, and equity
What is the Balance Sheet
When a company borrows cash from a bank, these are the two elements affected in the accounting equation
What is Assets (cash) and Liabilities (note payable)?
A company that earns revenue on account would increase revenue and increase this account ______
When a company incurs a general operating expense they would increase expense and increase this account ________
What is Accounts Receivable and Accounts Payable?
Any outflow for purchase, or inflow of sale, of a long term asset is this kind of activity
What is an investing activity?
This is the accrual concept of aligning incurred expenses against revenues earned during the period
What is the matching concept?
Prepared "during a specific period of time"
What is the Income Statement, Statements of Equity, and Statement of Cash Flows?
This is the section of the balance sheet always affected by adjusting entries
What is stockholders' equity?
A company that prepays its rent for a 12 month lease beginning in the next month engaged in this type of transaction?
(Accrual or Deferral?)
What is a deferral transaction?
When a company borrows cash from a bank (operating, investing, or financing)
When a company pays interest in cash (operating, investing, or financing)
What is a financing activity and operating activity?
This account is a distribution of earnings and not classified as an expense even though it reduces retained earnings
Classified as a financing activity in the statement of cash flows
What is a dividend?
Two statements containing Net Income as a line item
What is the Income Statement and Statement of Changes in Equity?
A company receives cash for an 8 month contract for services beginning on October 1st for $50,000. This is how much revenue will be recognized on December 31st in an adjusting entry
What is $18,750?
A company records revenues on account for $100,000 during the year. Their beginning and ending Accounts Receivables balance is $15,000 and $20,000, respectively. This is how much cash was collected during the year -
What is $95,000?
When a company's total inflow is $500,000, operating outflow is $600,000, investing inflow is $320,000, this is their financing inflow/outflow
What is an inflow of $780,000?
Items on the balance sheet are known as permanent accounts that carry balances year-to-year on a company's general ledger
The items on this statement contain temporary accounts that are closed to Retained Earnings at the end of every year
What is the Income Statement?
The ordering of preparing the financial statements
What is Income Statement, Statement of Changes in Equity, Balance Sheet, Statement of Cash Flows
A company receives a cash payment for services to be performed in the following year. The company forgets to record the adjusting entry for earned revenue throughout the period. As a result of this mistake net income, operating cash flows, and stockholders' equity will be -
(Overstated, understated, or not impacted) 3 answers)
What is understated net income, not impacted operating cash flows, and understated equity?
This is total net income for the current year given the information below:
Received $60,000 cash for monthly services beginning on May 1st
Paid cash for $24,000 cash for 12 month insurance policy with coverage beginning on October 1st
Signed a lease contract on December 1st for $12,000. Cash is due at the start of the lease on January 1st
What is $34,000?
When given the following information below, ______ amount is the company's total operating cash inflow/outflow assuming operations began in the current year
Sales on account: $12,000
Salary expenses accrued: $8,000
Ending Accounts Receivable: $3,000
Ending Salaries Payable: $1,000
What is $2,000 operating inflow?
What is recording transactions, recording adjusting entries, preparing financial statements, and recording closing entries?