Vocabulary
Net Income =
Revenues - Expenses
What are buildings, copyrights, supplies, prepaid expenses, accounts receivables, and property, plant, and equipment?
Assets
What does an expense do to stockholder's equity?
It lowers equity
What is the journal entry when Walmart paid cash for $1,000 worth of supplies on March 3rd?
3/3 Dr Supplies 1,000
Cr Cash 1,000
What is the order of the financial statements?
1. Income Statement
2. Retained Earnings Statement
3. Balance Sheet
4. Cash Flows Statement
Current Ratio
Current Assets/Current Liabilities
The liabilities for Walmart are $82,000 and the stockholders' equity is $120,000. What is the amount of Walmart's assets?
$202,000
After making journal entries, what are the next two steps?
Posting to the General Ledger
Trial Balance
Blue Bunny pays salaries of $4,000 for the current month. What is the journal entry?
Dr Salaries Payable 4000
Cr Cash 4000
Any prepaid expense is considered what?
Ex: Prepaid insurance, prepaid rent.
An asset
GAAP
What is Generally Accepted Accounting Principles - Common set of rules and conventions that have been developed to guide the preparation of financial statements.
How does paying a dividend affect the stockholder's equity?
Decreases
What are the steps to the accounting cycle?
1. Analyze Transactions
2. Journalize Transactions
3. Post to the Ledger
4. Prepare a Trial Balance
What does the journal entry look like when Target buys $1,400 worth of Blue Bunny (Inventory) on credit?
Dr Inventory 1,400
Cr Accounts Payable 1,400
Copyright or a patent is considered what?
An intangible asset
SEC
What is Securities and Exchange Commission - has the power to set accounting rules for publicly traded companies.
If the ending retained earnings for 2013 is $19,500, Dividends are $7,400, Net income is $11,100, what are the beginning retained earnings?
$15,800
Debit
Assets, Expenses, and Dividends have a normal debit balance.
What does the journal entry look like when Target pays forward $500 for a purchase made on credit to Blue Bunny?
Dr Accounts Payable 500
Cr Cash 500
If Mark reports: Cash = $7,500, Inventory = $3,900, Accounts Payable = $5,900, Accounts Receivable = $3,100, Common Stock =$6,000, Property, plant, and equipment = $10,500, Interest Payable = $1,600, Retained Earnings = $11,500. What are the current assets?
$14,500
Cash + Inventory + Accounts Receivable
Transposition error
When the numbers are recorded incorrectly, ex: 348 is changed to 384.
If Cash = $13,300, Accounts Payable = $104,700, Accounts Receivable = $6,700, Common Stock = $23,700, and Long-Term Investments = $481,400. What is the current ratio?
0.1910
Current Ratio = Current Assets/Current Liabilities so (13,300+6,700)/104,700 = 0.1910
Expenses and Dividends ____ retained earnings, affecting stockholder's equity the same way.
Decrease
UWG provides $4,000 services on account. Make the journal entry for UWG.
Dr Accounts Receivable 4000
Cr Service Revenue 4000
What does Stockholder's Equity break into?
Contributed Capital (Common Stock) and Retained Earnings and then. . . .
Retained Earnings = Beginning R/E + Revenues - Expenses - Dividends