The Accounting Equation
When is the accounting equation used?
When you want to make sure you assets are equal to liabilities and equity.
What are the rules of credit and debit?
Assets are increased by debits and decreased by credits. Liabilities are increased by credits and decreased by debits. Equity accounts are increased by credits and decreased by debits. Revenues are increased by credits and decreased by debits.
Is there a specific job for journalzing transactions?
Kind of, your book keepers job isnt to do this but it is in his job discription.
what is a Financial Statement?
Financial statements are written records that convey the business activities and the financial performance of a company.
what does G.A.A.P stand for?
Agree or disagree? The clear-cut relationship between a company's liabilities, assets and equity are the backbone to double-entry bookkeeping and is why we have the accounting equation.
That statement was true.
Why is the rules of credit and debit important to know?
The use of debits and credits in a two column transaction recording format is the most essential of all controls over accounting accuracy.
How often is journaling done?
every other 3 to 4 day.
True or false, a personal car payment can be a financial statement.
True
why is it important to use gap while logging transactions ect.
The ultimate goal of GAAP is to ensure a company's financial statements are complete, consistent, and comparable.
What is the accounting equation?
Assets = Liabilities + Equity
What will happen if you log your rules of debits and credits wrong?
If an accounting transaction is said to be unbalanced, and will not be accepted by the accounting software.
Why is journalizing your transactions important?
to keep well organized.
a dog is a Financial Statement?
False.
why is G.A.A.P essential to accounting?
to create a consistent, clear, and comparable method of accounting.
The accounting equation is a formula that shows the sum of what?
That a company's liabilities and shareholders' equity are equal to its total assets
where will the rules of debit and credit be used?
used when changing the ending balances in the general ledger accounts when accrual basis accounting is used. if is inst it will be unbalanced and wont make sense.
are you required to keep your Journalizing transactions?
no you are not required to keep or make journalizing transactions.
one main reason we have Financial statements.
(1 of 3 right answers) These three statements are informative tools that traders can use to analyze a company's financial strength and provide a quick picture of a company's financial health and underlying value.
Is G.A.A.P used world wide?
This method is only used in the united states.
Why would it be important to use the accounting equation?
because it forms the foundation for all financial statements.
How are the rules of debits and credits applied or used in business transactions?
what does it mean to journalize transactions?
Journalizing transactions is the process of keeping a record of all your business transactions, tracking them in chronological order, and generally includes the date, the account you're debiting or crediting and a brief description of the transaction that occurred.
what are Financial Statements important?
Financial statements provide a snapshot of a corporation's financial health, giving insight into its performance, operations, and cash flow.
Is G.A.A.P required by law?
not mandatory for all businesses, but SEC requires publicly traded and regulated companies to follow G.A.A.P for the purpose of financial reporting.