DEFINITIONS
The definition of an expense is
a decrease in assets or an increase in liabilities leading to a decrease in owner's equity
This method is the most accurate to record inventory
Identified Cost
The assumption that represents the income statement
Accrual Assumption
Name the three sections of the CFS
Operating, Investing and Financing Activities
The Balance Sheet best reflects which equation
The accounting equation
An obligation to pay a debt
Liability
FIFO assumes what
First inventory purchased is the first inventory sold
Gross profit is calculated from
Sales less Cost of Sales
Name the correct section GST on purchase of an asset would appear in
Operating
The only difference between current and non current is
12 months
The residual value after deducting liabilities from the total assets is called what
Owner's Equity
When the owner takes inventory out of the business this is called
Drawings
Inventory loss is recorded where in the Income Statement
After Gross Profit
The section interest paid on a loan would appear in
Operating
Net profit impact the Balance where?
Net profit increases Owner's equity
Something that gives a future economic benefit and is controlled by the business is called what
An Asset
Inventory donated to a raffle or a fundraiser is what
Advertising expense
Inventory gain is what kind of account.
Revenue account
Loan repayments would be recorded in which section
Financing
Long term loans are split between which sections
Current and non current liabilities
How do Sales meet the definition of revenue?
An increase in assets leading to an increase in owners equity
This document records sales returns and purchase returns
Credit Note
The format of the Income Statement is supported by this qualitative characteristic
Understandability
Name the account and location in the CFS when the owner takes cash out
Drawings, Financing Activities
Name the accounts that would appear under owner's equity
Capital at start
less drawings, plus net profit, plus contributions =
Capital at end