Requirements and assumptions
The assumption that states that financial statements need to be stated in dollars so that companies can easily be compared
Monetary Unit Assumption
A business or individual that buys goods or services from a manufacturer, wholesaler, or distributor and sells them to consumers
retailer
How many students are there in this class period?
6. 23
8. 16
Paid cash for insurance
Decrease cash, Increase prepaid-insurance
When is revenue recognized:
A. When the company receives payment for their work
B. When the company agrees to perform the work
C. When the company completes the work that it agreed to do
C
A company that performs tasks for the benefit of their customers, rather than selling physical products?
Service Company
Bought supplies on account
Increase supplies, increase AP
Assumption that the business will survive and operate indefinitely
Going concern
What are the two levels of corporate tax?
A branch of accounting that helps managers make decisions about a company's performance
Sold services on account to Maine south
Increase Sales/revenue, increase AR
The assumption that business and owner financial information are kept separately
Business Entity
What are the two business types that have unlimited personal liability?
Sole Proprietorship, Partnership
Type of accounting that provides information for on external stakeholders, such as investors, creditors, and regulators with a key focus on the profitability of the company
Financial accounting
Received cash on account from Maine South.
Increase Cash, Decrease AR
What are the three requirements needed to be a CPA?
150 credit hours (Equal to 5 years, students usually do a Masters or come in with AP credits)
Sit for and pass all four parts of the CPA exam.
Earn appropriate accounting experience (1 year)
What is a type of business that has limited liability and avoids double taxation of earnings?
S Corp, LLC
What are three of the four financial statements we will cover in this class?
Income Statement
Balance Sheet
Statement of Changes in Owners Equity
Cash Flow Statement
Joey Flames withdrew equity in the form of cash, $350.00
Decrease cash decrease capital