Exam (elaborations)
Accounting Principles and Formulas exam questions and answers
- Module
- ACCOUNTING PRONCIPLES
- Institution
- Oxford University (OX)
Accounting Principles and Formulas exam questions and answers
[Show more]
Content preview
Accounting Principles and Formulasexam questions and answers
Basic Accounting Equation - answer Assets = Liabilities + Owner's Equity
Business Entity - answer The financial statements report about a single business. Every business
gets its own set of books. Accountants do not mix in the owner's personal financial information.
Current - answer "Current" liabilities are those debts that must be paid within one year or one
operating cycle, whichever is longer.
Current Ratio - answer Current Assets/Current Liabilities = Current Ratio
Debt Ratio - answer Total Liabilities/Total Assets = Debt Ratio
Alternate Debt Ratio - answer 100% - Equity Ratio = Debt Ratio
Double Entry Accounting - answer Recording business transactions twice: once to show where
the money came from, and another time to show where the money went.
Equity Ratio - answer Total Equity/Total Assets = Equity Ratio
Alternate Equity Ratio - answer 100% - Debt Ratio = Equity Ratio
Liability Account - answer Payable or Deferred
Equity Account - answer Owner's name, Withdrawal, Dividend, Stock.
, Income Account - answer Sales, Income, or Revenue
Expense Account - answer Expense (every expense account should be marked with "exp." at the
end)
Asset Account - answer Receivable, Prepaid, Investment, Inventory (many asset accounts merely
have the name of the asset without any special identifying word)
Book value of a long-lived asset - answer Purchase Price - Accumulated Depreciation = Book
Value
Ending owner's equity formula - answer Equity (beginning) + Net Income - Withdrawal = Equity
(ending)
Gross Profit (GP) - answer Sales - CGS = GP
Income Statement Formula - answer Sales - CGS = GP
GP - Expenses = Net Income
Cash flow statement formula - answer Cash from operations
+ Cash from investment activities
+ Cash from financing activities
= Total change in cash
+ Cash - beginning of period
= Cash - end of period.
Conservative Principle - answer The accounting principle that requires accountants to resolve
financial statement uncertainty in the least favorable way.
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 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 BRAINBOOSTERS. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for £12.22. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
75632 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy revision notes and other study material for 14 years now