Fundamentals of Accounting
If a liability increases, which side of the T-Account is it recorded?
Credit side
Focuses on reporting information to external users
Financial Accounting
Revenue and Expenses are found within which financial report?
Income Statement
If equity decreases, which side of the T-Account is it recorded?
Debit side
Focuses on reporting information to internal users
Managerial Accounting
Assets and Liabilities are found within which financial report?
Balance Sheet
How are transactions listed in the General Journal? (in what way are they ordered)
Chronological order
If you add the Income Ratio and Expense Ratio, are they supposed to total a specific percentage? If so, what is it?
100%
Capital and Drawing are found within which financial report?
Statement of Owner's Equity
What are the 3 financial reports that companies have to prepare?
income statement, balance sheet, statement of owner's equity
How do you calculate the Income Ratio?
Net Income / Sales
If you calculate Sales minus Expenses and it equals a positive number, what is that positive number referred to as?
Net Income
A columnar accounting form used to summarize the general ledger information needed to prepare financial statements
Work Sheet
How do you calculate the Expense Ratio?
Total Expenses / Sales
If you Sales minus Expenses and it equals a negative number, what is that negative number referred to as?
Net Loss