Accounting 101
These are the 4 main sheets prepared by accountants
1. Balance Sheet
2. RE/owner's equity
3. Income Statement
4. Cash flow statement
What are items owned by the company that have monetary value called?
assets
What is the main goal of financial management?
to manage money efficiently
Income earned from the sale of an item is called
revenue
Which degree focuses more on investments and financial markets?
Finance and Investment
This is the purpose of accounting
1)identify, 2)record and 3)communicate financial information
Name 1 way the fundamental accounting equation can be stated.
1) Assets-Liabilities=Owner's Equity
2) Assets=Owner's Equity+Liabilities
3) Assets- Owner's Equity = liabilities
Which usually has higher risk: saving money or investing money?
investing
What do we call money the business pays out, like rent or salaries?
expenses
"What are the main jobs a finance and investment graduate can work?"
Investment Analyst
Portfolio Analyst
Financial Advisor
Banking Officer
Risk Analyst
Treasury Analyst
Asset Management
the types of business organizations
1)sole proprietorships, 2)partnerships and 3)corporations?
Which of the following is an asset: cash, rent payable, or loan?
cash
Why do investors expect higher returns for higher risk?
Because there is a higher chance of loss
When you buy something and agree to pay for it later, what is it called?
buying on credit, accounts payable
"What are the main jobs an accounting and finance graduate can work?"
Accountant
Auditor
Management Accountant
Financial Analyst
Finance Officer
Budget Analyst
Accounts Payable / Receivable Officer
Name 3 accounting certifications
Certified Public Accountant (CPA), Certified Management Accountant (CMA), Chartered Global Management Accountant (CGMA), Certified Internal Auditor (CIA), and Certified Fraud Examiner (CFE)
If assets are 100,000 and liabilities are 60,000, what is equity?
40,000
What is interest?
Money earned or paid for using money
when the business has more revenue than expenses, what is that called?
profit
How many ACCA exemptions does the Accounting and Finance degree provide?
8
Name 2 differences between financial accounting & managerial accounting
Financial Accounting:
Used by external users (investors, banks, government)
Follows accounting standards and rules
Focuses on past performance
Produces financial statements
Information is usually annual or quarterly
Managerial Accounting:
Used by internal users (managers)
No strict rules or standards
Focuses on planning and future decisions
Used for budgeting, costing, and control
Information can be frequent and detailed
The term used to explain how quickly a company can convert assets into cash.
liquidity
What is the difference between simple interest and compound interest?
Compound interest earns interest on interest
What is equity?
The owner’s share in the business
What is the difference between the Accounting and Finance degree versus the Finance and Investment degree?
Accounting and Finance:
Focuses on financial reporting, accounting rules, and business finance
Finance and Investment:
Focuses on investments, financial markets, and money management