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Financial Statement Applications Illinois Tech > Ch. 2 (IFSA) Financial Reporting Mechanics > Flashcards

Ch. 2 (IFSA) Financial Reporting Mechanics Flashcards

1
Q

___

Sales of goods and services to customers: (R)
Costs of providing the goods and services: (X)
Income tax expense: (X)

Assets (A), Liabilities (L), Owners’ Equity (E), Revenue (R), and Expenses (X)

A

Operating activities

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2
Q

Operating activities

Sales of goods and services to customers: (_)
Costs of providing the goods and services: (X)
Income tax expense: (X)

Assets (A), Liabilities (L), Owners’ Equity (E), Revenue (R), and Expenses (X)

A

Revenue (R)

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3
Q

Operating activities

Sales of goods and services to customers: (R)
Costs of providing the goods and services: (_)
Income tax expense: (X)

Assets (A), Liabilities (L), Owners’ Equity (E), Revenue (R), and Expenses (X)

A

Expenses (X)

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4
Q

Operating activities

Sales of goods and services to customers: (R)
Costs of providing the goods and services: (X)
Income tax expense: (_)

Assets (A), Liabilities (L), Owners’ Equity (E), Revenue (R), and Expenses (X)

A

Expenses (X)

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5
Q

___

Purchase or sale of assets, such as property, plant, and equipment: (A)
Purchase or sale of other entities’ equity and debt securities: (A)

Assets (A), Liabilities (L), Owners’ Equity (E), Revenue (R), and Expenses (X)

A

Investing activities

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6
Q

Investing activities

Purchase or sale of assets, such as property, plant, and equipment: (_)
Purchase or sale of other entities’ equity and debt securities: (A)

Assets (A), Liabilities (L), Owners’ Equity (E), Revenue (R), and Expenses (X)

A

Assets (A)

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7
Q

Investing activities

Purchase or sale of assets, such as property, plant, and equipment: (A)
Purchase or sale of other entities’ equity and debt securities: (_)

Assets (A), Liabilities (L), Owners’ Equity (E), Revenue (R), and Expenses (X)

A

Assets (A)

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8
Q

___

Issuance or repurchase of the company’s own preferred or common stock: (E)
Issuance or repayment of debt: (L)
Payment of distributions (i.e., dividends to preferred or common stockholders): (E)

Assets (A), Liabilities (L), Owners’ Equity (E), Revenue (R), and Expenses (X)

A

Financing activities

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9
Q

Financing activities

Issuance or repurchase of the company’s own preferred or common stock: (_)
Issuance or repayment of debt: (L)
Payment of distributions (i.e., dividends to preferred or common stockholders): (E)

Assets (A), Liabilities (L), Owners’ Equity (E), Revenue (R), and Expenses (X)

A

Owners’ Equity (E)

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10
Q

Financing activities

Issuance or repurchase of the company’s own preferred or common stock: (E)
Issuance or repayment of debt: (_)
Payment of distributions (i.e., dividends to preferred or common stockholders): (E)

Assets (A), Liabilities (L), Owners’ Equity (E), Revenue (R), and Expenses (X)

A

Liabilities (L)

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11
Q

Financing activities

Issuance or repurchase of the company’s own preferred or common stock: (E)
Issuance or repayment of debt: (L)
Payment of distributions (i.e., dividends to preferred or common stockholders): (_)

Assets (A), Liabilities (L), Owners’ Equity (E), Revenue (R), and Expenses (X)

A

Owners’ Equity (E)

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12
Q

Ideally, an analyst would prefer that most of a company’s profits (and cash flow) come from its ___.

A

operating activities

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13
Q

The accounts used in a company’s accounting system will be set forth in ___.

A

a chart of accounts

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14
Q

___ will be set forth in a chart of accounts.

A

The accounts used in a company’s accounting system

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15
Q

Any account that is offset or deducted from another account is called ___.

A

a contra account

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16
Q

Common Accounts - ___

Cash and cash equivalents
Accounts receivable, trade receivables
Prepaid expenses
Inventory
Property, plant, and equipment
Investment property
Intangible assets (patents, trademarks, licenses, copyright, goodwill)
Financial assets, trading securities, investment securities
Investments accounted for by the equity method
Current and deferred tax assets

A

Assets

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17
Q

___ is called a contra account.

A

Any account that is offset or deducted from another account

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18
Q

Common Accounts - Assets

___
Accounts receivable, trade receivables
Prepaid expenses
Inventory
Property, plant, and equipment
Investment property
Intangible assets (patents, trademarks, licenses, copyright, goodwill)
Financial assets, trading securities, investment securities
Investments accounted for by the equity method
Current and deferred tax assets

A

Cash and cash equivalents

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19
Q

Common Accounts - Assets

Cash and cash equivalents
___
Prepaid expenses
Inventory
Property, plant, and equipment
Investment property
Intangible assets (patents, trademarks, licenses, copyright, goodwill)
Financial assets, trading securities, investment securities
Investments accounted for by the equity method
Current and deferred tax assets

A

Accounts receivable, trade receivables

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20
Q

Common Accounts - Assets

Cash and cash equivalents
Accounts receivable, trade receivables
___
Inventory
Property, plant, and equipment
Investment property
Intangible assets (patents, trademarks, licenses, copyright, goodwill)
Financial assets, trading securities, investment securities
Investments accounted for by the equity method
Current and deferred tax assets

A

Prepaid expenses

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21
Q

Common Accounts - Assets

Cash and cash equivalents
Accounts receivable, trade receivables
Prepaid expenses
___
Property, plant, and equipment
Investment property
Intangible assets (patents, trademarks, licenses, copyright, goodwill)
Financial assets, trading securities, investment securities
Investments accounted for by the equity method
Current and deferred tax assets

A

Inventory

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22
Q

Common Accounts - Assets

Cash and cash equivalents
Accounts receivable, trade receivables
Prepaid expenses
Inventory
___
Investment property
Intangible assets (patents, trademarks, licenses, copyright, goodwill)
Financial assets, trading securities, investment securities
Investments accounted for by the equity method
Current and deferred tax assets

A

Property, plant, and equipment

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23
Q

Common Accounts - Assets

Cash and cash equivalents
Accounts receivable, trade receivables
Prepaid expenses
Inventory
Property, plant, and equipment
___
Intangible assets (patents, trademarks, licenses, copyright, goodwill)
Financial assets, trading securities, investment securities
Investments accounted for by the equity method
Current and deferred tax assets

A

Investment property

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24
Q

Common Accounts - Assets

Cash and cash equivalents
Accounts receivable, trade receivables
Prepaid expenses
Inventory
Property, plant, and equipment
Investment property
___
Financial assets, trading securities, investment securities
Investments accounted for by the equity method
Current and deferred tax assets

A

Intangible assets (patents, trademarks, licenses, copyright, goodwill)

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25
Q

Common Accounts - Assets

Cash and cash equivalents
Accounts receivable, trade receivables
Prepaid expenses
Inventory
Property, plant, and equipment
Investment property
Intangible assets (patents, trademarks, licenses, copyright, goodwill)
___
Investments accounted for by the equity method
Current and deferred tax assets

A

Financial assets, trading securities, investment securities

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26
Q

Common Accounts - Assets

Cash and cash equivalents
Accounts receivable, trade receivables
Prepaid expenses
Inventory
Property, plant, and equipment
Investment property
Intangible assets (patents, trademarks, licenses, copyright, goodwill)
Financial assets, trading securities, investment securities
___
Current and deferred tax assets

A

Investments accounted for by the equity method

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27
Q

Common Accounts - Assets

Cash and cash equivalents
Accounts receivable, trade receivables
Prepaid expenses
Inventory
Property, plant, and equipment
Investment property
Intangible assets (patents, trademarks, licenses, copyright, goodwill)
Financial assets, trading securities, investment securities
Investments accounted for by the equity method
___

A

Current and deferred tax assets

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28
Q

Common Accounts - ___

Accounts payable, trade payables
Provisions or accrued liabilities
Financial liabilities
Current and deferred tax liabilities
Reserves
Minority interest
Unearned revenue
Debt payable
Bonds (payable)

A

Liabilities

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29
Q

Common Accounts - Liabilities

___
Provisions or accrued liabilities
Financial liabilities
Current and deferred tax liabilities
Reserves
Minority interest
Unearned revenue
Debt payable
Bonds (payable)

A

Accounts payable, trade payables

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30
Q

Common Accounts - Liabilities

Accounts payable, trade payables
___
Financial liabilities
Current and deferred tax liabilities
Reserves
Minority interest
Unearned revenue
Debt payable
Bonds (payable)

A

Provisions or accrued liabilities

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31
Q

Common Accounts - Liabilities

Accounts payable, trade payables
Provisions or accrued liabilities
___
Current and deferred tax liabilities
Reserves
Minority interest
Unearned revenue
Debt payable
Bonds (payable)

A

Financial liabilities

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32
Q

Common Accounts - Liabilities

Accounts payable, trade payables
Provisions or accrued liabilities
Financial liabilities
___
Reserves
Minority interest
Unearned revenue
Debt payable
Bonds (payable)

A

Current and deferred tax liabilities

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33
Q

Common Accounts - Liabilities

Accounts payable, trade payables
Provisions or accrued liabilities
Financial liabilities
Current and deferred tax liabilities
___
Minority interest
Unearned revenue
Debt payable
Bonds (payable)

A

Reserves

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34
Q

Common Accounts - Liabilities

Accounts payable, trade payables
Provisions or accrued liabilities
Financial liabilities
Current and deferred tax liabilities
Reserves
___
Unearned revenue
Debt payable
Bonds (payable)

A

Minority interest

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35
Q

Common Accounts - Liabilities

Accounts payable, trade payables
Provisions or accrued liabilities
Financial liabilities
Current and deferred tax liabilities
Reserves
Minority interest
___
Debt payable
Bonds (payable)

A

Unearned revenue

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36
Q

Common Accounts - Liabilities

Accounts payable, trade payables
Provisions or accrued liabilities
Financial liabilities
Current and deferred tax liabilities
Reserves
Minority interest
Unearned revenue
___
Bonds (payable)

A

Debt payable

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37
Q

Common Accounts - Liabilities

Accounts payable, trade payables
Provisions or accrued liabilities
Financial liabilities
Current and deferred tax liabilities
Reserves
Minority interest
Unearned revenue
Debt payable
___

A

Bonds (payable)

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38
Q

Common Accounts - ___

Capital, such as common stock par value
Additional paid-in capital
Retained earnings
Other comprehensive income

A

Owners’ equity

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39
Q

Common Accounts - Owners’ equity

___
Additional paid-in capital
Retained earnings
Other comprehensive income

A

Capital, such as common stock par value

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40
Q

Common Accounts - Owners’ equity

Capital, such as common stock par value
___
Retained earnings
Other comprehensive income

A

Additional paid-in capital

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41
Q

Common Accounts - Owners’ equity

Capital, such as common stock par value
Additional paid-in capital
___
Other comprehensive income

A

Retained earnings

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42
Q

Common Accounts - Owners’ equity

Capital, such as common stock par value
Additional paid-in capital
Retained earnings
___

A

Other comprehensive income

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43
Q

Common Accounts - ___

Revenue, sales
Gains
Investment income (e.g., interest and dividends)

A

Revenue

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44
Q

Common Accounts - Revenue

___
Gains
Investment income (e.g., interest and dividends)

A

Revenue, sales

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45
Q

Common Accounts - Revenue

Revenue, sales
___
Investment income (e.g., interest and dividends)

A

Gains

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46
Q

Common Accounts - Revenue

Revenue, sales
Gains
___

A

Investment income (e.g., interest and dividends)

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47
Q

Common Accounts - __

Cost of goods sold
Selling, general, and administrative expenses (SG&A; e.g., rent, utilities, salaries, advertising)
Depreciation and amortization
Interest expense
Tax expense
Losses

A

Expense

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48
Q

Common Accounts - Expense

___
Selling, general, and administrative expenses (SG&A; e.g., rent, utilities, salaries, advertising)
Depreciation and amortization
Interest expense
Tax expense
Losses

A

Cost of goods sold

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49
Q

Common Accounts - Expense

Cost of goods sold
___
Depreciation and amortization
Interest expense
Tax expense
Losses

A

Selling, general, and administrative expenses (SG&A; e.g., rent, utilities, salaries, advertising)

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50
Q

Common Accounts - Expense

Cost of goods sold
Selling, general, and administrative expenses (SG&A; e.g., rent, utilities, salaries, advertising)
___
Interest expense
Tax expense
Losses

A

Depreciation and amortization

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51
Q

Common Accounts - Expense

Cost of goods sold
Selling, general, and administrative expenses (SG&A; e.g., rent, utilities, salaries, advertising)
Depreciation and amortization
___
Tax expense
Losses

A

Interest expense

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52
Q

Common Accounts - Expense

Cost of goods sold
Selling, general, and administrative expenses (SG&A; e.g., rent, utilities, salaries, advertising)
Depreciation and amortization
Interest expense
___
Losses

A

Tax expense

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53
Q

Common Accounts - Expense

Cost of goods sold
Selling, general, and administrative expenses (SG&A; e.g., rent, utilities, salaries, advertising)
Depreciation and amortization
Interest expense
Tax expense
___

A

Losses

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54
Q

___ are the unsold units of product on hand.

A

Inventories (sometimes referred to as inventory stock)

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55
Q

Inventories are ___.

A

the unsold units of product on hand (sometimes referred to as inventory stock)

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56
Q

___ are amounts customers owe the company for products that have been sold as well as amounts that may be due from suppliers (such as for returns of merchandise).

A

Trade receivables (also referred to as commercial receivables , or simply accounts receivable )

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57
Q

Trade receivables (also referred to as commercial receivables , or simply accounts receivable ) are ___.

A

amounts customers owe the company for products that have been sold as well as amounts that may be due from suppliers (such as for returns of merchandise)

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58
Q

___ represent amounts owed to the company from parties other than customers.

A

Other receivables

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59
Q

Other receivables represent ___.

A

amounts owed to the company from parties other than customers

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60
Q

___ are very liquid short - term investments, usually maturing in 90 days or less.

A

Cash equivalents

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61
Q

Cash equivalents are ___.

A

very liquid short - term investments, usually maturing in 90 days or less

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62
Q

___ presents a company’s financial position at a particular point in time using the following equation:

Assets = Liabilities + Owners’ equity

A

The balance sheet

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63
Q

The balance sheet presents ___ using the following equation:

Assets = Liabilities + Owners’ equity

A

a company’s financial position at a particular point in time

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64
Q

The balance sheet presents a company’s financial position at a particular point in time using the following equation:

___ = Liabilities + Owners’ equity

A

Assets

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65
Q

The balance sheet presents a company’s financial position at a particular point in time using the following equation:

Assets = ___ + Owners’ equity

A

Liabilities

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66
Q

The balance sheet presents a company’s financial position at a particular point in time using the following equation:

Assets = Liabilities + ___

A

Owners’ equity

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67
Q

The balance sheet presents a company’s financial position at a particular point in time using the following equation:

___

A

Assets = Liabilities Owners’ + equity

68
Q

___ = Contributed capital + Retained earnings

A

Owners’ equity

69
Q

Owners’ equity = ___ + Retained earnings

A

Contributed capital

70
Q

Owners’ equity = Contributed capital + ___

A

Retained earnings

71
Q

___ presents the performance of a business for a specific period of time. The equation reflected in it is the following:

Revenue - Expenses = Net income (loss)

A

The income statement

72
Q

The income statement presents ___. The equation reflected in the income statement is the following:

Revenue - Expenses = Net income (loss)

A

the performance of a business for a specific period of time

73
Q

The income statement presents the performance of a business for a specific period of time. The equation reflected in the income statement is the following:

___ - Expenses = Net income (loss)

A

Revenue

74
Q

The income statement presents the performance of a business for a specific period of time. The equation reflected in the income statement is the following:

Revenue - ___ = Net income (loss)

A

Expenses

75
Q

The income statement presents the performance of a business for a specific period of time. The equation reflected in the income statement is the following:

Revenue - Expenses = ___

A

Net income (loss)

76
Q

When ___, it reports net income.

A

a company’s revenue exceeds its expenses

77
Q

When a company’s revenue exceeds its expenses, it reports ___.

A

net income

78
Q

When ___, it reports a net loss.

A

a company’s revenues are less than its expenses

79
Q

When a company’s revenues are less than its expenses, it reports ___.

A

a net loss

80
Q

___

Assets 2,000
Liabilities 500
Owners’ equity 1,500
2,000

A

Balance Sheet

81
Q

Balance Sheet

___ 2,000
Liabilities 500
Owners’ equity 1,500
2,000

A

Assets

82
Q

Balance Sheet

Assets ___
Liabilities 500
Owners’ equity 1,500
2,000

A

2,000

83
Q

Balance Sheet

Assets 2,000
___ 500
Owners’ equity 1,500
2,000

A

Liabilities

84
Q

Balance Sheet

Assets 2,000
Liabilities ___
Owners’ equity 1,500
2,000

A

500

85
Q

Balance Sheet

Assets 2,000
Liabilities 500
___ 1,500
2,000

A

Owners’ equity

86
Q

Balance Sheet

Assets 2,000
Liabilities 500
Owners’ equity ___
2,000

A

1,500

87
Q

Balance Sheet

Assets 2,000
Liabilities 500
Owners’ equity 1,500
___

A

2,000

88
Q

___

Revenue 250

Expense 50
Net income 200

A

Income Statement

89
Q

Income Statement

___ 250

Expense 50
Net income 200

A

Revenue

90
Q

Income Statement

Revenue ___

Expense 50
Net income 200

A

250

91
Q

Income Statement

Revenue 250

___ 50
Net income 200

A

Expense

92
Q

Income Statement

Revenue 250

Expense ___
Net income 200

A

50

93
Q

Income Statement

Revenue 250

Expense 50
___ 200

A

Net income

94
Q

Income Statement

Revenue 250

Expense 50
Net income ___

A

200

95
Q

___ are linked together through the retained earnings component of owners’ equity.

A

The balance sheet and the income statement

96
Q

The balance sheet and the income statement are linked together through ___ of owners’ equity.

A

the retained earnings component

97
Q

___ = Beginning retained earnings + Net income - Dividends

A

Ending retained earnings

98
Q

Ending retained earnings = ___ + Net income - Dividends

A

Beginning retained earnings

99
Q

Ending retained earnings = Beginning retained earnings ___ - Dividends

A

+ Net income (Revenues - Expenses)

100
Q

Ending retained earnings = Beginning retained earnings + Net income ___

A
  • Dividends
101
Q

Ending retained earnings = ___

A

Beginning retained earnings + Net income - Dividends

102
Q

___ represent the earnings (i.e., net income) not distributed as dividends to owners.

A

Retained earnings

103
Q

Retained earnings represent the earnings (i.e., net income) ___.

A

not distributed as dividends to owners

104
Q

___

Beginning retained earnings 250
Plus net income 200
Minus dividends 0
Ending retained earnings 450

A

Statement of Retained Earnings

105
Q

Statement of Retained Earnings

___ 250
Plus net income 200
Minus dividends 0
Ending retained earnings 450

A

Beginning retained earnings

106
Q

Statement of Retained Earnings

Beginning retained earnings ___
Plus net income 200
Minus dividends 0
Ending retained earnings 450

A

250

107
Q

Statement of Retained Earnings

Beginning retained earnings 250
___ 200
Minus dividends 0
Ending retained earnings 450

A

Plus net income

108
Q

Statement of Retained Earnings

Beginning retained earnings 250
Plus net income ___
Minus dividends 0
Ending retained earnings 450

A

200

109
Q

Statement of Retained Earnings

Beginning retained earnings 250
Plus net income 200
___ 0
Ending retained earnings 450

A

Minus dividends

110
Q

Statement of Retained Earnings

Beginning retained earnings 250
Plus net income 200
Minus dividends ___
Ending retained earnings 450

A

0

111
Q

Statement of Retained Earnings

Beginning retained earnings 250
Plus net income 200
Minus dividends 0
___ 450

A

Ending retained earnings

112
Q

Statement of Retained Earnings

Beginning retained earnings 250
Plus net income 200
Minus dividends 0
Ending retained earnings ___

A

450

113
Q

In assessing the financial impact of each event and converting these events into accounting transactions, the following steps are taken:

  1. ___
A

In assessing the financial impact of each event and converting these events into accounting transactions, the following steps are taken:

  1. Identify which accounts are affected, by what amount, and whether the accounts are increased or decreased.
  2. Determine the element type for each account identified in Step 1 (e.g., cash is an asset) and where it fits in the basic accounting equation. Rely on the economic characteristics of the account and the basic definitions of the elements to make this determination.
  3. Using the information from Steps 1 and 2, enter the amounts in the appropriate column of the spreadsheet.
  4. Verify that the accounting equation is still in balance.
114
Q

In assessing the financial impact of each event and converting these events into accounting transactions, the following steps are taken:

  1. ___
A

In assessing the financial impact of each event and converting these events into accounting transactions, the following steps are taken:

  1. Identify which accounts are affected, by what amount, and whether the accounts are increased or decreased.
  2. Determine the element type for each account identified in Step 1 (e.g., cash is an asset) and where it fits in the basic accounting equation. Rely on the economic characteristics of the account and the basic definitions of the elements to make this determination.
  3. Using the information from Steps 1 and 2, enter the amounts in the appropriate column of the spreadsheet.
  4. Verify that the accounting equation is still in balance.
115
Q

In assessing the financial impact of each event and converting these events into accounting transactions, the following steps are taken:

  1. ___
A

In assessing the financial impact of each event and converting these events into accounting transactions, the following steps are taken:

  1. Identify which accounts are affected, by what amount, and whether the accounts are increased or decreased.
  2. Determine the element type for each account identified in Step 1 (e.g., cash is an asset) and where it fits in the basic accounting equation. Rely on the economic characteristics of the account and the basic definitions of the elements to make this determination.
  3. Using the information from Steps 1 and 2, enter the amounts in the appropriate column of the spreadsheet.
  4. Verify that the accounting equation is still in balance.
116
Q

In assessing the financial impact of each event and converting these events into accounting transactions, the following steps are taken:

  1. ___
A

In assessing the financial impact of each event and converting these events into accounting transactions, the following steps are taken:

  1. Identify which accounts are affected, by what amount, and whether the accounts are increased or decreased.
  2. Determine the element type for each account identified in Step 1 (e.g., cash is an asset) and where it fits in the basic accounting equation. Rely on the economic characteristics of the account and the basic definitions of the elements to make this determination.
  3. Using the information from Steps 1 and 2, enter the amounts in the appropriate column of the spreadsheet.
  4. Verify that the accounting equation is still in balance.
117
Q

Recording a basic accounting system

  1. Capitalize ___ (OE) Contributed Capital 150,000
A

(A) Cash 150,000

118
Q

Recording a basic accounting system

  1. Capitalize (A) Cash 150,000 ___
A

(OE) Contributed Capital 150,000

119
Q

Recording a basic accounting system

  1. Investments ___ (A) Other Assets 100,000 Investments
A

(A) Cash (100,000)

120
Q

Recording a basic accounting system

  1. Investments (A) Cash (100,000) ___
A

(A) Other Assets 100,000 Investments

121
Q

Recording a basic accounting system

  1. Pay Landlord ___ (A) Other Assets 1,000 Prepaid Rent (A) Other Assents 2,000 Rent Deposit
A

(A) Cash (3,000)

122
Q

Recording a basic accounting system

  1. Pay Landlord (A) Cash (3,000) ___ (A) Other Assents 2,000 Rent Deposit
A

(A) Other Assets 1,000 Prepaid Rent

123
Q

Recording a basic accounting system

  1. Pay Landlord

(A) Cash (3,000)
(A) Other Assets 1,000 Prepaid Rent ___

A

(A) Other Assets 2,000 Rent Deposit

124
Q

Recording a basic accounting system

  1. Buy equipment ___ (A) Other Assets 6,000 Office equipment
A

(A) Cash (6,000)

125
Q

Recording a basic accounting system

  1. Buy equipment (A) Cash (6,000) ___
A

(A) Other Assets 6,000 Office equipment

126
Q

Recording a basic accounting system

  1. Sell subscription___ (L) 1,200 Unearned fees
A

(A) Cash 1,200

127
Q

Recording a basic accounting system

  1. Sell subscription (A) Cash 1,200 ___
A

(L) 1,200 Unearned fees

The company has not yet actually earned the subscription fees because it has an obligation to deliver newsletters in the future. So, this amount is recorded as a liability called unearned fees (or unearned revenue).

128
Q

Recording a basic accounting system

  1. Buy books ___ (L) 10,000 Accounts payable
A

(A) Other Assets 10,000 Inventory

129
Q

Recording a basic accounting system

  1. Buy books on credit (A) Other Assets 10,000 Inventory ___
A

(L) 10,000 Accounts payable

130
Q

Recording a basic accounting system

  1. Advertise
  • ___
  • (OE) Expense (600)
A

(A) Cash (600)

131
Q

Recording a basic accounting system

  1. Advertise (A) Cash (600) ___
A

(OE) Expense (600)

132
Q

Recording a basic accounting system

  1. Borrow ___ (L) 12,000 Bank debt
A

(A) Cash 12,000

133
Q

Recording a basic accounting system

  1. Borrow (A) Cash 12,000 ___
A

(L) 12,000 Bank debt

134
Q

Recording a basic accounting system

  1. 9 Sell books on account ___ (A) Other Assets (100) Inventory (OE) Revenue 125 (OE) Expense (100)
A

(A) Other Assets 125 Accounts receivable

135
Q

Recording a basic accounting system

  1. 9 Sell books on account (A) Other Assets 125 Accounts receivable ___(OE) Revenue 125 (OE) Expense (100)
A

(A) Other Assets (100) Inventory

136
Q

Recording a basic accounting system

  1. 9 Sell books on account (A) Other Assets 125 Accounts receivable (A) Other Assets (100) Inventory ___ (OE) Expense (100)
A

(OE) Revenue 125

137
Q

Recording a basic accounting system

  1. Sell books on account
  • (A) Other Assets 125 Accounts receivable
  • (A) Other Assets (100) Inventory
  • (OE) Revenue 125
  • ___
A

(OE) Expense (100)

138
Q

Recording a basic accounting system

  1. Cash sale ___ (A) Other Assets (200) Inventory (OE) Revenue 250 (OE) Expense (200)
A

(A) Cash 250

139
Q

Recording a basic accounting system

  1. Cash sale (A) Cash 250 ___ (OE) Revenue 250 (OE) Expense (200)
A

(A) Other Assets (200) Inventory

140
Q

Recording a basic accounting system

  1. Cash sale (A) Cash 250 (A) Other Assets (200) Inventory ___ (OE) Expense (200)
A

(OE) Revenue 250

141
Q

Recording a basic accounting system

  1. Cash sale (A) Cash 250 (A) Other Assets (200) Inventory (OE) Revenue 250 ___
A

(OE) Expense (200)

142
Q

___ requires that revenue be recorded when earned and that expenses be recorded when incurred, irrespective of when the related cash movements occur.

A

Accrual accounting

143
Q

Accrual accounting requires that ___.

A

revenue be recorded when earned and that expenses be recorded when incurred, irrespective of when the related cash movements occur

144
Q

___ arises when a company receives cash prior to earning the revenue.

A

Unearned (or deferred ) revenue

145
Q

Unearned (or deferred ) revenue arises when ___.

A

a company receives cash prior to earning the revenue

146
Q

___ arises when a company earns revenue prior to receiving cash but has not yet recognized the revenue at the end of an accounting period.

A

Unbilled (or accrued) revenue

147
Q

Unbilled (or accrued) revenue arises when ___.

A

a company earns revenue prior to receiving cash but has not yet recognized the revenue at the end of an accounting period

148
Q

___ arises when a company makes a cash payment prior to recognizing an expense.

A

Prepaid expense

149
Q

Prepaid expense arises when ___.

A

a company makes a cash payment prior to recognizing an expense

150
Q

___ arise when a company incurs expenses that have not yet been paid as of the end of an accounting period.

A

Accrued expenses

151
Q

Accrued expenses arise when ___.

A

a company incurs expenses that have not yet been paid as of the end of an accounting period

152
Q

___ record increases of asset and expense accounts or decreases in liability and owners’ equity accounts.

A

Debits

153
Q

Debits record ___.

A

increases of asset and expense accounts or decreases in liability and owners’ equity accounts

154
Q

___ record increases in liability, owners’ equity, and revenue accounts or decreases in asset accounts.

A

Credits

155
Q

Credits record ___.

A

increases in liability, owners’ equity, and revenue accounts or decreases in asset accounts

156
Q

___ is a document or computer file in which business transactions are recorded in the order in which they occur (chronological order).

A

A journal

157
Q

A journal is a document or computer file in which ___.

A

business transactions are recorded in the order in which they occur (chronological order)

158
Q

___ is the collection of all business transactions in an accounting system sorted by date.

A

The general journal

159
Q

The general journal is ___.

A

the collection of all business transactions in an accounting system sorted by date

160
Q

___ is a document or computer file that shows all business transactions by account.

A

A ledger

161
Q

A ledger is a document or computer file that ___.

A

shows all business transactions by account

162
Q

___ is a document that lists account balances at a particular point in time.

A

A trial balance

163
Q

A trial balance is a document that ___.

A

lists account balances at a particular point in time

164
Q

___, a final product of the accounting system, are prepared based on the account totals from an adjusted trial balance.

A

The financial statements

165
Q

The financial statements, a final product of the accounting system, are prepared based on ___.

A

the account totals from an adjusted trial balance

Financial Statement Applications Illinois Tech (16 decks)

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