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Financial Accounting Exam 1 Questions And Answers
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Financial Accounting Exam 1 Questions And Answers...
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Financial Accountin g Exam 1 Quest ions And Ans wers 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 coll ected. 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 a ccounting period. Statement of Retained Earnings - Answer Reports the way that net income and th e 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 Incom e. 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 e arn 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) ---------------------------------------- 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 o f 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 th at determines the financial statements that public companies must provide to stockholders, and the rules that they must use in producing those statements.The benefits of buying summaries with Stuvia:
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