Accounting Notes - Test 8/3/23 Flashcards
Accounting is the language of…
Business
Assets = ________ + Capital
Liabilities
T-Accounts always debit on the ______
left
T-accounts always credit on the __________
Right
What increases an asset AND an expense?
Debit
What increases a liability, equity, and revenue accounts?
Credit
What decreases an asset?
Credit
What decreases liability, equity, and revenue?
Debit
What you earn is called?
Revenue or Fees Income
What you OWE is called
Accounts Payable
What account keeps track of what people owe you?
Accounts Receivable
What you pay for is called an ___________
Expense
What is the purpose of the SEC, Sarbanes Oxley Act, FASB, and the IASC?
Regulatory agencies to insure that companies are following GAAP (Generally Accepted Accounting Principles) to hold businesses accountable.
The Securities & Exchange Committee, SEC, was created when?
1933
What Act was created in 2002
Sarbanes Oxley
What does FASB stand for?
Federal Accounting Standards Board
What are the three types of accounting?
Public, government, managerial
The four users of financial information are: Users, Banks, Investors and _________
Government
These three documents, the Balance Sheet, Income Statement, and Statement of Equity are what kind of statements?
Financial Statements
What kind of statement uses revenue and expense?
Income Statement
What statement reports changes in the owner’s financial interest during a reporting period?
Statement of Owner Equity
There are 8 steps in the accounting cycle. What is the first one?
Analyze daily business transactions
How often is a trial balance created?
Monthly
When are adjusting entries made?
At the end of the accounting period
If the accounting period is 30 days, what are the tasks that must be done every 30 days?
Trial balance, journalizing and posting adjusting entries, journalizing and post-closing entries to the ledgers, and preparing a post-closing trial balance.
Accounts Payable are debts that we
OWE
Accounts Receivable are debts we
OWN
Liabilities increase with a CREDIT and decrease with
A debit
Assets increase with a DEBIT and decrease with
A credit
