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Accounting > Accounting Final > Flashcards

Accounting Final Flashcards

1
Q

Cash flows from operating activities:

In flows

A

Sale of good or services

Collection of interest and dividends

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2
Q

Cash flows from operating activities:

Outflows

A

For inventory
For operating expenses
For interest
For income taxes

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3
Q

Cash flows from investing activities

In flow

A

Sale of investments
Sale of long term assets
Collection of notes receivable

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4
Q

Cash flows from investing activities

Our flow

A

Purchase of investments
Purchase of long term assets
Lending with notes receivable

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5
Q

Cash flows for financing activities

In flow

A

Issue a bond or notes payable

Issue a stock

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6
Q

Cash flows for financing activities

Out flow

A

Repayment of bond or note payable
Acquisition of treasury stock
Payment of dividends

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7
Q

What is an outflow?

A

We paid cash

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8
Q

What is an inflow

A

We receive cash

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9
Q

What is the accounting equation

A

Asset=Liabilities + stockholders equity

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10
Q

Operation deals primarily with what

A 
Current asset
Current liabilities 
 -interest 
 -taxes
 -net income
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11
Q

Financing deals primarily with what

A

Long term assets

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12
Q

Financing deals primarily with what

A

Long term liabilities

Stockholders equity

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13
Q

What are non cash activities?

A

Significant investing or financing activities that do not affect cash

Ex)
Purchase long term asset by issuing stock or debt

Conversion of bond payable to common stock

Exchange of long term asset

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14
Q

Who owns a corporation?

A

The stock holders

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15
Q

Who runs the corporation?

A

The president and CEO

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16
Q

Who puts check and balances on the President and CEO so that they don’t take advantage of stockholders or people?

A

The chairman and Board of Directors

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17
Q

What are the advantages of the corporate form

A 
Separate legal existence 
Limited liability of stockholder
Transferable ownership rights 
Ability to acquire capital 
Continuous life
Corporate management
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18
Q

What are the disadvantages of corporate form

A

Corporate management
Government regulations
Additional taxes

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19
Q

What are stockholders rights

A

Right to vote

Right to receive dividends

Right to share in distribution of assets

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20
Q

Advantage and disadvantages of corporation

A

Ad

  • limited liability
  • raise capital and transfer ownership

Dis

  • additional taxes
  • more paperwork
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21
Q

What are the classes of stock

A

Preferred and common

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22
Q

Preferred stock is what

A

Stock with special characteristics

Get preference if dividend and liquidation

No voting rights

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23
Q

Common stock get what

A

Voting rights and risidual claims to profits

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24
Q

When do you account for stocks

A

Issuance of stock and stock repurchase

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25
Q

What does issuing a stock do

A

Increases assets and increase common stock for par value and additional paid in capital for difference

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26
Q

Stock repurchase is what

A

When company repurchase own stock

Called treasury stock

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27
Q

What belongs on the balance sheet

A

Assets

Liability’s

Stockholder Equity

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28
Q

What belongs on the income statement

A

Revenues and expenses

29
Q

What is a current asset or liability

A

It is an asset or liability that would be:
Used paid or received in a year

Used within a year

30
Q

What is a long term asset or liability

A

Ones that are used paid or received

Longer than a year

31
Q

What is the accounting equation

A

Asset = Liabilities + Stockholder Equity

Stockholder Equity=
retained earnings + common stock

Retained earnings= Net income - Dividends

Net income= revenue - expenses

32
Q

What does financial accounting do

A

Helps decision makers outside the company

33
Q

What does Managerial accounting do

A

Helps decision makers within the company

34
Q

What is disclosure

A

Providing financial info to outside users

35
Q

What is a sole proprietorship

A

Business owned by one person

36
Q

What is a partnership

A

Business owned by two or more people

37
Q

What is a corporation

A

Business that is legally separated from its owners

Stockholder (owners) have limited liability

38
Q

What are the fundamental activities of profit firm

A

Make goal
Obtain financing (for goal)
Make investments
Conduct operations

G FEO

39
Q

What are investing activity

A

Acquiring and disposing of assets used to produce and sell product or service

40
Q

Short term assets are what

A

Resources that are used up quickly

Ex. Inventory

41
Q

What are long term asset

A

Resources used over long periods of time

Ex. Equipment

42
Q

What are operating activities

A

Activities that include production promotion or selling of things

43
Q

Financing activities are what

A

Getting money

Debt financing) borrow money from
(Equity financing) get money form owners (stockholder

44
Q

What are the four financial statements that accountants use

A

Balance sheet
Statement of cash flow
Statement of equity
Income statement

45
Q

What reports a companies financial position at a point in time?

A

Balance sheet

  • “it is a snap shot”
46
Q

What financial statement shows performance over a period of time?

A

Statements of cash flows

Statement of equity

Income statement

  • “it is a movie”
47
Q

What are auditors

A

People hired by company to see if financial stammers are following GAAP
(General accepted accounting principles)

48
Q

What are the roles of auditor

A

See if management follow GAAP when make financial statement

Provide credibility to financial statement
So that investor and credit can make decision

49
Q

What is GAAP

A

General accepted accounting principles

Accounting rules and standards for financial reporting

50
Q

What is the purpose of GAAP

A

Insure financial reporting is transparent and consistent for one org to another

51
Q

What are elements of high quality accounting info

A

Quality Accounting standards (follow GAAP)

Quality auditing standards (public company audited)

Regular oversight and monitoring (SEC)

Basically

Relevant-reliable- comparable

52
Q

What is an asset

A

Companies resources

53
Q

What is liability and stockholders equity

A

They are claims to resources of a company

54
Q

What does DEAD CURLS stand for

A

Debit: Expense - Asset - Dividends
(Increase on debit/ decrease credit)

Credit: Unearned revenue - Revenue - Liability - Stockholder Equity
(Increase on credit/ decrease debit)

55
Q

On the t account what side is the debit and credit

A

Debit left

Credit right

56
Q

What is a contra account

A

It’s account is opposite of its regulars account

Cash is asset (increase on debit acct)

Accumulated depreciation is contra-asset
(Increase on credit)

57
Q

What is deferred revenue

A

You take cash from costumer but did not perform service yet

58
Q

Is defered revenue a revenue account

A

No it is a liability account

59
Q

What is done for the accounting cycle

A

Analyzing journalize post

60
Q

What is the general income statement formate

A

Revenue - COG (cost of goods sold)
= Gross profit - Expense
= Net income

61
Q

What are the 4 types of adjustments

A

Deferred revenue / deferred expense

Accrual revenue / accrual expense

62
Q

What are adjusting entries

A

Adjustments to accounts (revenue and expenses) at the end of the year

63
Q

What is the rule about adjusting entries

A

Never involves cash

Effects at least one balance sheet and one income statement

64
Q

What is a common trend regarding adjustment entries

A

Expenses are debited and revenues are credited
Ex.
Supplies exp Salaries exp
- supply Salary pay

Rent exp. interest rec
-prepaid rent Interest rev

Unearned rev. Interest exp.
- service rev. Interest pay.
Depreciation exp
- Accumulated depreciation

65
Q

What are closing entries

A

Temporary accounts that are closed into retained earnings at end of the year

66
Q

What does RED is dead mean

A

Revenue - expenses - dividends

Are temporary accounts and most be closed into retained earnings (so zeroed)

67
Q

What is the entry close for revenue

A

Revenue

- retained earnings

68
Q

What is the entry close for expense

A

Retained earning

- expenses (all of them)

69
Q

What is the entry close for dividends

A

Retained earning

- dividends

Accounting (2 decks)

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