Exam (elaborations)
ACCT 229 TAMU Unit 1 (Ch 1-4) Questions and Answers 2024
- Course
- Institution
ACCT 229 TAMU Unit 1 (Ch 1-4)
[Show more]
Content preview
ACCT 229 TAMU Unit 1 (Ch 1-4)business - answerall activities necessary to provide the members of an economic
system with goods and services
3 forms of business organization - answer-sole proprietorship
-partnership
-corporation
sole proprietorship - answerone owner
advantage: easy to form
disadvantage: unlimited liability by the owner
partnership - answertwo or more owners; profits or losses are divided among the
owners
advantage: easy to form
disadvantage: unlimited liabilitiy
corporation - answerbusiness incorporated under the laws of a particular state. must file
a charter and bylaws with the state. board of directors make decisions, shareholders all
have partial ownership
disadvantage: startup effort
advantages of corporation - answer-limited liability for all owners
-continuity of life - theoretically goes on forever
-ease in transfer of ownership (stock)
-can raise large amounts of money through selling shares of stock
3 types of business activities - answerfinancing, investing, operating
Financing - answer-how a company pays for growth/expansion/startup
- ex. issuing shares of common stock or borrowing money from bank
investing - answer-purchasing resources to be used in day to day operations
-ex. land, buildings, equipment, patents, etc
operating - answer-activities that earn revenue and generate expenses
-ex. selling goods, paying rent, paying utilities, etc
purpose of accounting - answerto identify, measure, and communicate information
about a company that is useful in making economic decisions
, 2 types of user group - answerexternal and internal
external user group - answer-ex. investors, shareholders, creditors, IRS
-needed info: stewardship (profitable or not?), valuation, liquidity
-how they get info: quarterly and annual financial statements
internal user group - answer-ex. managers, directors, CEO/CFO
-needed info: budget, planning/forcasting
-how they get info: financial statements, managerial accounting
4 types of financial statements - answer1. balance sheet
2. income statement
3. statement of retained earnings
4. statement of cash flows
balance sheet - answer-shows the financial position of the company at a SINGLE
POINT in time
-uses THE accounting equation
THE accounting equation - answerAssets = Liabilities + Stockholder's Equity
Assets - answerresources that will produce a future economic benefit, held by the
company
-ex. cash, accounts receivable, buildings, land, etc
liabilities - answerdebt owed to creditors, suppliers, employees, or customers
-ex. (anything) payable, unearned revenue
equity - answerfinancing provided by owners and operations of the company
= Retained earnings + common stock
common stock - answerinvestments made by owners
retained earnings - answercumulative earnings of the company that have been retained
(reinvested; not paid out)
RE beginning balance (Jan 1)
+Net Income
- Dividends
= RE end balance (Dec 31)
The income statement - answer-shows the results of the company's operations for a
PERIOD of time
- finds net income
net income - answer=Revenues - Expenses
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller jw638729. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $14.99. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
67474 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now
