Framework
__________ are the rules/procedures that govern how financial accounting works here in the United States.
GAAP (Generally Accepted Accounting Principles)
False
True/False: Cash is a credit account.
False
One function of the _________ is to issue guidance on GAAP.
FASB (Financial Accounting Standards Board)
How would a company record a journal entry for paying employees for work done in the current month?
Hint: which accounts are credited/debited?
Debit salaries expense; credit cash
Name three examples of assets.
Cash, accounts receivable, supplies, equipment, land, buildings, notes receivable, interest receivable, etc.
The ______ has the legal authority over GAAP compliance by publicly-traded companies in the United States.
SEC (Securities and Exchange Commission)
How would a company record a transaction where they are taking out a loan to pay for the purchase of equipment?
Hint: which accounts are credited/debited?
Debit equipment; credit notes payable
100 bonus points - what do we accrue on the note?
__________ is the only liability account that does not have the word "payable" in it.
deferred revenue
An __________ is a tool that is used to help assess how well financial statements comply with GAAP.
audit
How would a company record where they are paying for supplies on account?
Hint: which accounts are credited/debited?
Debit supplies; credit accounts payable
We can only record revenue when it is _______, or when the work is actually done.
earned
Write the accounting equation, net income formula, and retained earnings formula.
This is an all-or-nothing question - no partial points.
Assets = Liabilities + Stockholders' Equity (Common Stock + Retained Earnings)
Net Income = Revenues - Expenses
Beginning Retained Earnings + Net Income - Dividends = Ending Retained Earnings
How would a company record services provided to customers which are billed at a later time?
Hint: which accounts are debited/credited?
Debit accounts receivable; credit service revenue
Current assets/liabilities can be distinguished from long-term assets/liabilities depending on if their term is less than or greater than _____ _______.
Hint: point in time (day, month, etc...)
one-year