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Libby/Libby/Hodge Financial Accounting, 11th Edition
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Libby/Libby/Hodge Financial Accounting, 11th Edition
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Libby/Libby/Hodge Financial Accounting, 11th Edition
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Libby/Libby/Hodge Financial Accounting, 11th Edition
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TEST BANK FOR Financial Accounting 11th Edition Robert Libby, Patricia Libby, Frank Hodge 2024 A+
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Libby/Libby/Hodge Financial Accounting, 11th Edition SolutionManual
Accounting - ANSWER: System that collects and processes (analyzes, measures, and
records) financial information about an organization and reports that information to
decision makers.
Accounting entity - ANSWER: Is the organization for with financial data are to be
collected.
The four basic statements: - ANSWER: 1. Balance Sheet
2. Income Statement
3. Statement of Retained Earnings
4. Statement of Cash flows
Balance Sheet - ANSWER: Reports the amount of assets, liabilities and stockholders'
equity of an accounting entry at a point in time.
Income Statement - ANSWER: Reports the revenues less the expenses of the
accounting period.
Statement of Retained Earnings - ANSWER: Reports the way that net income and the
distribution of dividends affected the financial position of the company during the
accounting period.
Statement of Cash Flows - ANSWER: Reports inflows and outflows of cash during the
accounting period in the categories of operating, investing, and financing.
Basic Accounting Equation - ANSWER: Assets = Liabilities + Stockholders' Equity
Assets - ANSWER: Are the economic resources owned by the company. Each of these
economic resources is expected to provide future benefits to the firm.
Liabilities - ANSWER: Are the company's debts or obligations. Which will be paid with
assets or services.
Stockholders' Equity (Owners' Equity) - ANSWER: Indicates the amount of financing
provided by owners of the business and earnings. Is the sum of the contribute capital
+ the retained earnings.
Accounting Period - ANSWER: Is the time period cover by the financial statements.
Elements of the Income Statement - ANSWER: Revenues, Expenses and Net Income.
, Revenues - ANSWER: Earnings from the sale of goods or services to costumers.
Revenues are reported whether or not have yet been paid for.
Expenses - ANSWER: Represent the dollar amount of resources the entity used to
earn revenue during the period.
Net Income ("the bottom line") - ANSWER: Is the excess of total revenues over total
expenses.
Net Loss - ANSWER: If total expenses exceed total revenues.
Retained Earning Equation - ANSWER: Ending Retained Earnings = (Beginning of
Retained Earnings + Net Income) - Dividends
The Cash Flow Statement Equation - ANSWER: +/- Cash flow from Operating
Activities (CFO)
+/- Cash flow from Investing Activities (CFI)
+/- Cash flow from Financing Activities (CFF)
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Change in Cash
Cash Flow from Operating Activities, and examples - ANSWER: CFO- Are cash flow
that are directly related to earning income. Example, collecting cash from costumers,
pay salaries, pay bills, pay to suppliers.
Cash Flow from Investing Activities, and examples - ANSWER: CFI- Are cash flow
related to the acquisition or sale of the company's productive assets. Example, the
purchase of additional equipment.
Cash Flow from Financing Activities, and examples - ANSWER: CFF- Are cash flow
directly related to the financing of the enterprise itself. Example, the payment of
money to investors and creditors.
Notes - ANSWER: "Footnotes" provide supplemental information about the financial
condition of a company.
GAAP - ANSWER: Generally Accepted Accounting Principles, are the measurement
rules used to develop the information in financial statements.
SEC - ANSWER: Security and Exchange Commission, is the U.S government agency
that determines the financial statements that public companies must provide to
stockholders, and the rules that they must use in producing those statements.
FASB - ANSWER: Financial Accounting Standards Board, is the private sector body
given the primary responsibility to work out the detailed rules that become GAAP.
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