Exam (elaborations)
ACG 2021 Exam 1_ Chapters 1, 2, & 3 (1)
- Course
- Institution
ACG 2021 Exam 1_ Chapters 1, 2, & 3 (1)
[Show more]
Seller
Follow
modockochieng06
Content preview
ACG 2021 Exam 1: Chapters 1, 2, & 3The purpose of Financial Accounting - ANS-To measure business activities of a company and
communicate that information to external parties for decision-making purposes
Auditors - ANS-trained individuals hired by a company as an independent party to express a
professional opinion of the accuracy of that company's financial statements
Accrual-basis Accounting - ANS-record revenue when we earn them and record expenses with
related expenses, regardless of when cash is received or paid
Cash-basis Accounting - ANS-record revenues at the time cash received and expenses at the
time cash is paid.
GAAP - ANS-Generally Accepted Accounting Principles: the rules of financial accounting
Revenue Recognition Principal - ANS-record revenue in the period in which we earn it
Matching Principal - ANS-recognizing expenses in the same period as the revenues they help
generate
Accounting Equation - ANS-A = L + SE
A company's assets = that company's liabilities and stock-holders' equity
Assets - ANS-resources owned by a company
(cash, land, equipment, accounts receivable...)
Liabilities - ANS-amounts owed to creditors
(accounts payable, notes payable)
Stockholders' Equity - ANS-owners' claims to resources
(common stock, retained earnings)
Revenues - ANS-the amounts earned from selling products or services to customers
Expenses - ANS-the costs of providing products and services
Net Income - ANS-the difference between revenues and expenses
, Account - ANS-summary of the effects of all transactions related to a particular item over a
period of time.
Chart of Accounts - ANS-a list of all account names used to record transactions of a company.
Operating Cycle - ANS-the average time between purchasing or acquiring inventory and
receiving cash proceeds from its sale.
General Ledger - ANS-all accounts used to record the company's transactions
Journal - ANS-a chronological record of all the transactions affecting a firm
Posting - ANS-the process of transferring the debit and credit informations from the journal to
individual accounts in the general ledger
Trial Balance - ANS-a list of all accounts and their balances at a particular date, showing the
total debits and credits
Adjusting Entries - ANS-to record events that have occurred but that have not been recorded,
such as recording insurance expense at the end of the month from a prepaid policy
Adjusted Trial Balance - ANS-list of all accounts and their balances after we have updated
account balances for adjusting entries.
Financial Statements - ANS-periodic reports published by the company for the purpose of
providing interval of time to external parties
Income Statement - ANS-Revenues + Expenses = Net Income
(financial statement that reports the company's revenues and expenses over an interval of time)
Statement of Stockholders' Equity - ANS-Common Stock + Retained Earnings
(financial statement that summarizes the changes in stockholders' equity over an interval of
time)
Balance Sheet - ANS-Accounting Equation used to check all balances (Assets, Liabilities, S.E.)
(financial statement that presents the financial position of the company on a particular date)
Statement of Cash Flows - ANS-financial statement that measures activities involving cash
receipts and cash payments over an interval of time.
Operating
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 modockochieng06. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $7.99. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
67096 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now