Financial Statements
What are the three categories for The Statement of Cash Flow?
Operating
Investing
Financing
What is the difference between Notes Payable & Accounts Payable?
Notes Payable is formal and typically deals with a creditor (ie. bank). Accounts Payable is More personal with no interest.
What is a liability?
The amount owed to creditors.
What is Accounts Receivables?
When you are owed the payment of money.
Purchased equipment for $500 cash
Dr. Equipment $500
Cr. Cash $500
1) Income Statement
2) Statement of Retained Earnings
3) Balance Sheet
4) Statement of Cash Flows.
Stockholders' equity represents what?
Claim of ownership
Distinguish the difference between "current" and "non-current".
Current: within 1yr
Non-Current: over 1yr
In the accounting equation, assets have to equal what?
Liabilities plus Stockholder's Equity
How do you record a $2,000,000 purchase of a building on account?
Dr. Building $2,000,000
Cr. Accounts Payable $2,000,000
What does GAAP and IFRS stand for?
Generally Accepted Accounting Principal
&
International Financial Reporting Standards
Does Stockholders Equity have a current section?
No.
What liability doesn't end with "payable"?
Deferred (Unearned) Revenue
Cash, Accounts Receivable, Inventory, Equipment, Land
On the accounting equation, write the transaction:
Your friend paid you back $300 that was loaned
A = L + SE
Cash $300
A/R $(300)
What is the formula to find Net Income?
Net Income =
Assets + Liabilities - Common Stock - old Retained Earnings
What is the normal balance of an Expense account?
Debit.
What is the Current Ratio formula?
Current Assets / Current Liabilities
During the month you bought supplies of $500, and used $200 worth of your supplies during this period. Write the T-account for supplies to find the ending balance.
Supplies T-account:
Beg. Balance Dr. $500
Cr. $200
End Balance Dr. $300
You bought equipment of $2,000. You paid $200 cash, with the balance on a note. What is the journal entry?
Dr. Equipment $2,000
Cr. Cash $200
Cr. Note Payable $1,800
Which statement does ending Retained Earnings come from?
Statement of Retained Earnings
If the total Stockholders' Equity is $3,000, Expense is $500, Common Stock is $1,200, and Dividends is $2,500.
How much is Retained Earnings?
Total Stockholder's $3,000
Common Stock $(1,200)
Retained Earnings $1,800
Services or products you haven't delivered and still owe to recognize revenue already received.
Calculate the net profit margin from the information provided below.
Total Assets = $210,000
Total Liabilities = 115,000
Common Stock = 21,000
Dividends = 6,100
Expenses = 91,000
Beginning Retained Earnings = 26,000
Answer: .37 or 37%
How would you record the purchase of 100,000 shares of stock at the price of $500,000 on credit?
Dr. Common Stock $100,000
Cr. Cash 100,000