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HBX Core Financial Accounting Exam 2024/2025 Questions With Completed & Verified Solutions.
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HBX Core Financial Accounting Exam 2024/2025 Questions With Completed & Verified Solutions.
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HBX Core Financial AccountingAssets=?
Liabilities + owner's equity
assets should balance liabilities and owner's equity
what are Assets?
resources like cash or equipment that are controlled by the organization
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Liabilities
loan from a bank, wages, accounts payable to supplier: Any obligation that needs to be paid to a
third bank.
Owner's equity
control the business and make decisions, discretionary (not obligatory)
Owners' Equity = Assets - Liabilities.
transactions
taking it out a loan, paying invoices, selling merchandise
all transactions affect balance sheet
, Revenue
value that company is producing
The Matching Principle
The matching principle requires that a company match its expenses to the related revenues in
the accounting period to which they relate.
Suppose the Spicy Maya Hot Chocolate sold by Cardullo's was purchased for $8 from their
supplier.
assets go down, owner's equity go down
Buying on credit: IOU
Short term financing, like burrowing money from bank: 30 day pay day.
increase in assets, increase in Liabilities
then once they pay it both go down
Methods of accounting
cash-- recorded and cash: small businesses
accrual-- mostly all companies use, when merchandise is delivered revenue is recorded
Realization principle
if business performs the work it can recognized revenue even if it did not receive the cash.
long questions
so like yoga membership is 1200, when should this revenue be recognized?
evenly throughout the year!
liabilities increase!
Gift Cards
Assets go up, liabilities go up!
Memberships for the business
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