Show Me the Money, Daddy
This is what GAAP stands for?
What are the Generally Accepted Accounting Principles
This is the basic accounting equation.
What is Assets = Liabilities + Stockholders’ Equity?
A company earns $15,000 in revenue and has $9,000 in expenses. This is its net income.
What is $6,000?
An expense that has been incurred but not yet paid is called this.
What is an accrued expense?
A company receives $2,000 cash for services performed immediately. This is the journal entry.
What is debit Cash $2,000 and credit Service Revenue $2,000?
This type of accounting information user includes lenders and investors outside the business
What are external users
This account represents money a company owes to a lender under a written agreement.
What is Notes Payable?
Current assets are $30,000 and current liabilities are $15,000. This is the company's current ratio.
What is 2.0?
A company has $1,000 of supplies available at the beginning of the period, purchases another $500, and has $300 remaining at the end. This is the supplies expense.
What is $1,200?
A company purchases $800 of supplies for cash. This is the effect on the accounting equation.
What is an $800 increase in Supplies and an $800 decrease in Cash, with no immediate change in total assets?
The three components of the fraud triangle
What are Pressure, opportunity, and rationalization.
Cash received before a company provides a service is recorded in this type of account.
What is a liability, specifically Unearned Revenue?
Total liabilities are $50,000 and total assets are $200,000. This is the company's debt ratio.
What is 25%?
A company received $6,000 in advance for services. By the end of the period, $2,000 worth of those services have been completed. This is the amount of revenue that should be recognized.
What is $2,000?
This is the first step in the accounting cycle.
What is analyzing business transactions?
This accounting assumption treats a business as separate from its owner.
What is the business entity assumption?
Insurance paid in advance that benefits future periods is initially recorded in this account category.
What are assets, specifically Prepaid Insurance?
Net income is $20,000 and total revenue is $100,000. This is the company's profit margin.
What is 20%?
A company purchases equipment for $12,000 with a useful life of four years and no salvage value. Using straight-line depreciation, this is the annual depreciation expense.
What is $3,000?
A company has earned $500 of interest revenue that it has not yet received in cash. This is the adjusting entry.
What is debit Interest Receivable $500 and credit Interest Revenue $500?
Under this principle, revenue is recorded when it is earned, not necessarily when cash is received.
What is the revenue recognition principle?
: A company has liabilities of $40,000 and stockholders’ equity of $60,000. According to the accounting equation, how much are its total assets?
What are $100,000?
Beginning retained earnings are $25,000, net income is $12,000, and dividends are $4,000. This is ending retained earnings.
What are $33,000?
Employees have earned $2,500 in salaries that will not be paid until the next accounting period. Name the adjusting entry.
What is debit Salaries Expense $2,500 and credit Salaries Payable $2,500?
This is the entry to close Expenses at the end of the year.
What is Debit Income Summary and Credit Expenses?