Accounting

Question 1

Accounting Equation

Answer 1

Assets = Liabilities + Owners Equity
(Always balances out)

Question 2

Assets

Answer 2

Property owned by a person or company
Ex: Cash, Building, Equipment, Land

Question 3

Liabilities

Answer 3

A thing for which someone is responsible for debt or financial obligation
Ex: Accounts Payable, Loans Payable, Wages Payable

Question 4

Owners Equity

Answer 4

Ownership
Ex: Stock, Retained Earning

Question 5

Revenue

Answer 5

Income (Unit Sales x Price Per Unit

Question 6

Expenses

Answer 6

The cost required for something

Question 7

Who do income statements get reported to?

Answer 7

Income Statements are reported to the Securities and Exchange Commission (SEC)

Question 8

SEC

Answer 8

Independent, federal agency responsible for protecting investors, maintaining fair and ordering functioning of securities markets and facilitating capital.

Question 9

The income statement consists of:

Answer 9

Revenue, expenses gains and losses.
The equation is:
Revenues - Expenses = Net Income (Profit)

Question 10

Statement Cash Flow

Answer 10

Allows investors to understand how a company’s operations are running, where its money is coming from and how money is being spent.

Question 11

What does a statement cash flow consist of

Answer 11

• Operating
• Investing
• Financing
  (Creditors use this to determine how much cash is available for the company to fund its operating expenses and pay its debts).