Financial Accounting in Society
Identify, record, analyze, and communicate information about the economic events that affect organizations.
What is Accountants?
Economic resources that will be used to produce revenue.
What is an Asset?
The only financial statement dated at a point in time.
What is the Balance Sheet?
An increase in Cash and an increase in Common Stock.
What is issuance of stock?
Cash collected from providing services.
What is an Operating Activity?
Privately funded organization with the primary authority for establishing accounting standards in the U.S.
What is the Financial Accounting Standards Board (FASB)?
Amounts owed to creditors.
What is a Liability?
Provides information about the core operations of the business including revenues and expenses.
What is the Income Statement.
Paid Cash to purchase land.
What is a decrease to Cash and an increase to Land?
Cash received from borrowing money at a bank.
What is a Financing Activity?
Measurement rules established by the FASB in the U.S. Financial statements issued to the public must follow these rules.
What is Generally Accepted Accounting Principles (GAAP)?
Certificates that evidence ownership in a company.
What is Common Stock?
The 2 sources of Stockholders' Equity.
What is Common Stock and Retained Earnings?
Borrowed cash from the bank.
What is an increase to Cash and an increase to Note Payable?
Cash paid to purchase Land.
What is an Investing Activity?
Government agency that enforces reporting rules for Public Companies. Mostly relies on GAAP but sometimes establishes different reporting rules.
What is Security Exchange Commission (SEC)?
Providing goods and services causing an increase in assets or decrease in liabilities.
What is Revenue?
The primary accounting equation.
What is Assets = Liabilities + Stockholders' Equity?
Paid Cash for Utilities used.
What is a decrease to Cash and a decrease to Retained Earnings for Utilities Expense?
Cash received from issuing Common Stock.
What is a Financing Activity?
The 2 primary external users (readers) of financial statements.
What is investors and creditors?
Costs of assets consumed or services used in generating revenue.
What is an Expense?
The 3 cash activities reported on the Statement of Cash Flows.
What are Operating, Investing, and Financing Actitivies?
Provided services for cash.
What is an increase to Cash and an increase to Retained Earnings for Service Revenue?
Cash paid for salaries.
What is an Operating Activity?