Introduction
Area of accounting aimed at serving external users
What is financial accounting?
These are items owned that have monetary value
What are assets?
These 3 items are found at the very top of the balance sheet (in order).
What are 1) Name of business, 2) Name of the financial statement and 3) Statement date?
The Debit-Credit rule states...Debits go on the _____, Credits go on the ______.
What are: Debits=Left, Credits=Right ?
Shows the company's revenues and expenses
What is the income statement?
Managerial Accounting is aimed to provide information for
Who are internal users.
A = L + OE
What is the Accounting Equation?
Assets = Liabilities + Owners Equity
The main owner's equity account is called this.
What is capital?
These are used to collect written evidence of business transactions...
What are: Source Documents?
In addition to an owner, these people also have claims against a company's assets.
Who are creditors?
The three legal forms a business may take
What are 1)sole proprietorships, 2)partnerships and 3)corporations?
The amount of liabilities if assets are $2,000 and owner's equity is $500
What is $1,500.
A bank loan would be listed under this category on the balance sheet.
What is the liabilities section?
This principle states that: what a company owns must = what it owes + funds contributed by owners.
What is: Double-Entry Bookkeeping?
The effect on equity when an owner withdraws cash from the business
What is decreases?
The person who examines financial statements to verify that they are prepared according to GAAP...
Who are Auditors or CPAs?
This is the difference between total assets and total liabilities.
What is Owner's Equity?
Accounts Receivable(AR) is classified on the Balance Sheet as an...
What is an asset?
This Principle states: a company is required to match expenses with revenue.
What is the Matching Principle?
Creditors claims on assets are called:
What are liabilities?
This involves testing business records and procedures for accuracy.
What is auditing?
Account on the balance sheet that represents the amount owed for purchasing supplies on credit
What is Accounts Payable(AP)?
A balance sheet is prepared in order to show this.
What is a company's financial position?
This GAAP Principle states that accounting information should be based on the actual cost
What is the Cost Principle?
The effect on assets when a company receives cash on their accounts receivable.
What is no effect? One assets (cash) goes up and another asset (A/R) decreases.