Accounting
What is the accounting equation?
Assets = Liabilities + Stockholders' Equity
True or False — You should spend equal time on every exam problem.
False - Prioritize the one's you know for sure and double check calculations
I always equal, but I’m never the same. What am I?
Debits & Credits
You buy coffee with your debit card for $4. What is the journal entry?
Debit: Coffee Expense
Credit: Cash
Do dividends increase or decrease retained earnings?
Decrease
What’s the best first step when you don’t know a multiple choice answer?
Eliminate one's you know are wrong!
I increase with credits, decrease with debits, and I represent what you owe. Who am I?
Liability
You pay $150 for a 5 month gym membership upfront. Is this an asset or expense?
Asset. Prepaid gym membership...
Which financial statement shows assets, liabilities, and equity?
Balance Sheet
Why is showing your work important for the on-paper portion?
Hazelbaker gives away partial credit.
I measure what’s left after subtracting liabilities from assets. Who am I?
Stockholders' Equity
You put $100 of groceries on a credit card. What liability account is affected?
Accounts Payable.
Under accrual basis accounting, when is revenue recorded?
When the services or goods were provided.
What’s one way to double-check your balance sheet before moving on?
Make sure that Assets = Liabilities + S/E
I am made at the end of the year, and I show what happens to accruals and deferrals. What am I?
Adjusting Entry
Your paycheck of $500 is deposited directly into your bank account. What is the journal entry?
Debit: Cash
Credit: Revenue/Income
What makes an asset/liability current or non-current?
Non-current: Expected to last over a year
Current: More liquid, expected to last less than a year.
What’s a smart exam strategy for adjusting entry problems?
Identify what’s missing, remember that adjusting entries happen at the end of the year (December 31)
I begin the year with zero, but gain an amount over time. Net Income would be impossible without me. What am I?
Revenues and Expenses.
You buy a $1,200 laptop that you’ll use for 3 years of school. Should this be recorded as a current asset on the balance sheet, and why?
No, it is a long term asset we own and is expected to last us over 1 year.