ACG 2021 Block 1 Practice Questions and Correct Answers
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Course
ACG 2021
Institution
ACG 2021
Accounting Equation Assets = Liabilities + Stockholder's Equity
Expanded Accounting Equation Assets = Liabilities + Stockholder's Equity
Stockholder's Equity is broken down into Common Stock + Retained Earnings.
Retained Earnings is then broken down into Revenues - Expenses - Dividends
Net ...
ACG 2021 Block 1 Practice Questions
and Correct Answers
Accounting Equation ✅Assets = Liabilities + Stockholder's Equity
Expanded Accounting Equation ✅Assets = Liabilities + Stockholder's Equity
Stockholder's Equity is broken down into Common Stock + Retained Earnings.
Retained Earnings is then broken down into Revenues - Expenses - Dividends
Net Income ✅Revenues - Expenses = Net Income
Order of making financial statements ✅Income Statement > Statement of
Stockholder's Equity/Retained Earnings > Balance Sheet > Statement of Cash Flows
Which piece of information comes out from each financial statement and is used for the
next? ✅Income Statement produces the Net Income > Net Income is used to find the
Retained Earnings in the Statement of Stockholder's Equity > The Stockholder's Equity
is used in the Balance Sheet > Cash from the Balance sheet is used for the Statement
of Cash Flows
How to find Income Statement ✅Revenues - Expenses = Net Income
How to find Statement of Stockholder's Equity ✅Common Stock + Retained Earnings =
Stockholder's Equity
Retained Earnings = Beginning RE + Net Income - Dividends
How to format/find the Balance Sheet ✅Assets (Including cash) = Liabilities +
Stockholders' Equity
How to find/format the Statement of Cash Flows ✅Cash Flows from operating activities
+ Cash Flows from investing activities + Cash Flows from financing activities = Change
in cash
What is considered Operating Activities? ✅Cash receipts and payments from selling
goods and services
What is considered Investing Activities? ✅Purchasing and selling long-term assets
What is considered Financing Activities? ✅Issuing stock and borrowing
, Asset definition ✅a resource that you own. Cash is an asset. Supplies are an asset.
Liability definition ✅amounts that you owe
Stockholder's Equity definition ✅the owner's claim to the resources
Revenue Definition ✅the amounts earned from selling products or services to
customers
Expenses Definition ✅the costs of providing products and services
Difference between "notes" and "accounts" (i.e. notes payable/receivable, accounts
payable/receivable) ✅Notes payable/receivable are more formal than accounts
payable/receivable. Accounts are usually more of a short-term loan
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