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Accounting Terms
Ratio Analysis
Analyzing Transactions
Debit and Credit Procedures
Trial balance
100

What are the 4 types of financial statements?

Income Statement

Retained Earnings Statement

Balance Sheet

Statement of Cash Flow

100

What are the 3 types of ratios?

Profitable

Liquidity 

Solvency

100
On October 1, cash of $10000 is invested in Sierra corporation by investors in exchange for $10000.

 

What 2 accounts will you use?

Cash and Common Stock

100

What accounts are Debits?

Assets

Dividends

Expenses

100
What is the order of accounts listed in a trial balance?

Assets

Liabilities

Stockholder's Equity

Revenues

Expenses 

200

What shows the amount and causes of change during a  period?

Retained Earning Statement 

200

What is the formula for Earnings Per Share?

EPS= (Net Income - Preferred Dividends) / (Weighted-Average Common Shares Outstanding)

200
On October 20th Clarkson company paid a $500 dividend. What 2 accounts will you use?

Cash and Dividends

200

What accounts are credits?

Liabilities 

Common Stock

Revenue 

Retained Earnings

200

What is one purpose of trial balances?

-To prove debits equal credits

- To uncover errors in journalizing and posting

-Useful in preparation of financial statements

300

What financial statement reports assets and claims to assess at a SPECIFIC point in time?

Balance Sheet

300

What does Free Cash Flow equal?

Net cash provided by operating activities - capital expenditures - cash dividends 

300

Analyzing business transactions is part of what system?

Accounting Information systems

300

When debits increase what decreases?

Credits

300
What is the basic Accounting Equation?

Assets = Liabilities + Stockholder's Equity

400

What result do you have when revenue exceeds expenses?

Net Income

400

What is the formula for Working Capital, and what type of ratio is it?

Working Capital= current assets - current liabilities 

It is a liquidity ratio

400
On October 2nd, Sierra received a $1200 cash advance from a client.


What accounts will you use?

Cash and Unearned Service Revenue 

400

When credits increase what decreases?

Debits

400

If you were completing a trial balance, would you debit or credit notes payable? Why?

Credit it because it's a liability

500

What does GAAP stand for, and what does is mean?

General Accepted Accounting Principles

- A set of accounting rules and practices that have authoritative support 

500

For 2017 Stone Rock Corporation reported a net income of $26,000; net sales $400,000; and average shares outstanding of $6,000. Their preferred stock dividends were $2000. What is the 2017 earnings per share?

(26000-2000) /6000 =$4.00

500

On October 9th Sierra company hired 4 new employees  to begin work on October 15th.

What accounts will you use?

No account, because no accounting transaction has occurred.

500

Debits must equal what?

Credits 

500

A trial balance will not balance if?

a $100 cash dividend is debited to the dividends account for $1000 & credited to cash for $100