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ACCT203 > CH1: Acct in business > Flashcards

CH1: Acct in business Flashcards

1
Q

Identifying activity

A

-observing sales
-acquiring knowledge
-identifying prices& quantity

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2
Q

recording activity

A

-recording
-logging
-Inputting
-entering
-measuring
-registering

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3
Q

communicating activity

A

-reporting
-analyzing
-interpreting
-preparing

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4
Q

Accting vs recordkeeping

A

acct- an info system that record, relays important info

recordkeeping-recording transactions

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5
Q

Internal users

A

Directly manages the organization
-managers
-CEO
-Employees
-customers

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6
Q

external users

A

does not directly in the organization and has limited acess to acct info
-shareholders
-creditors
-labor unions
-Board of directors

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7
Q

Types of accounting
External?
Internal?

A

1) Financial
2) managerial

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8
Q

financial accounting duties

A

-external auditing
-reviewing financial statements

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9
Q

Managerial accounting duties

A

-cost accounting
-budgeting
-internal auditing
-consulting with treasurer on cash flows

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10
Q

Tac accounting

A

-investigating tax fraud
-tax consulting
-enforcing tax laws
-estate planning

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11
Q

process for making ethical decisions

A

1) identify ethical concerns
2) analyze options
3) Make ethical decision

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12
Q

what are the three factors that push one to commit fraud (fraud triangle)?

A

-opportunity
-rationalization
-pressure

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13
Q

ethics

A

beliefs that distinguish right from wrong

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14
Q

what is prevention?

A

a more effective way to stop fraud than detection

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15
Q

what is an audit

A

examines whether financial statements are prepared using GAAP

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16
Q

what are internal controls

A

procedures to reduce fraud (physcial controls, etc)

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17
Q

what is GAAP

A

Set of accounting rules and practices
(generally accepted acct principles)

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18
Q

Who sets the GAAP rules?

A

FASB (financial acct standards board)

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19
Q

what is the SEC

A

govt agency that enforces proper use of GAAP
(security and exchange commission)

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20
Q

what is ISAB

A

international group that issues IFRS

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21
Q

Sabernes-Oxley

A

a U.S. law to protect investors by preventing fraudulent accounting

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22
Q

what are public accountants

A

acct. professionals who provide services to many clients

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23
Q

what are the assumptions of accting? What are the principles of accting?

A

ASSUMPTIONS
-going concern
-time period
-monetary
-business entitity

PRINCIPLES
-full disclosure
-measurement (cost)
-expense recognition
-revenue recogniton

24
Q

measurement (cost) principle

A

acct info is based on actual cost (cash or equal to cash value)

25
Q

Revenue recognition principle

A

revenues is recognized when goods/services are provided and at the amt expected to be recieved

26
Q

expense recognition principle

A

recording expenses incurred to generate revenue reported

27
Q

full disclosure principle

A

a company reporting the details behind financial statements in the notes that would affects users decisions

28
Q

going concern assumption

A

acct info presumes that the business will continue operating instead of being closed

29
Q

monetary unit assumption

A

transactions/ events are expressed in monetary units

30
Q

time period assumption

A

the life of a company can be divided into time periods (ex months)

31
Q

business entity assumption

A

A business is accounted for separately from other business entities and its owner

32
Q

sole propitiorship

A

-1 owner
-owner is liable
-no additional business taxes
-not a separate legal entity
-ends in owner deathc/choice

33
Q

partnership

A

-2+ owners
-no additional business taxes
-partners are liable
-not a separate legal entity
-ends in partner death/choice

34
Q

corportation

A

-1+ owners (shareholders)
-additional business taxes
-limited liability (shareholders not responsible)
-separate legal entity
-bus life is indefinite

35
Q

LLC (limited liability corporation)

A

-1+ (called members)
-no additional business taxes
-limited liability (some members not responsible)
-seperate legal entity
-indefinite

36
Q

Assets

A

resources that a company owns
-cash
-accounts receivable
-supplies
-equipment
-land

37
Q

Liabilities

A

creditors claims on assets
-wages to workers
-accts payable

38
Q

equity

A

owners claims on assets
-common stock
-dividends
-revenues
-expenses

39
Q

Accounting equation

A

Assets= Liabilities+ equity

40
Q

Acct equation expanded

A

Assets = Liabilities +common stock-dividends + revenues - expenses

41
Q

commonstock

A

inflows of cash and other assets for stock

42
Q

dividends

A

outflows of cash/assets to shareholders

43
Q

revenues

A

increase in equity from sales

44
Q

expenses

A

decrease in equity from costs

45
Q

net income

A

when revenue exceeds expenses

46
Q

net loss

A

when expenses exceed revenue

47
Q

order of financial sheets

A

1-income statement
2-statement of retained earnings
3-balance sheet
4-statement of cash flows

48
Q

What goes on the income sheet

A

Revenues
-expenses
=net income/loss

49
Q

What goes on the statement of retained earnings

A

beginning retained earning
+net income
-dividends
=ending retained earnings

50
Q

What goes on the income sheet?

A

revenue
-expenses
-net income/net loss

51
Q

What goes on the balance sheet

A

LEFT SIDE
Assets
-cash
-acct receivable
-supplies
-land
-total assets =x

RIGHT SIDE
Liabilities
=total liabilities

Equity
-common stock
-retained earnings
-total equity

=total equity + liabuilities

52
Q

how to find net income (loss) given assets and liabilites from beginning and ending year

A

1-find the equity for the beginning and ending.

2-use beginning equity and subtract any dividends expenses and add any revenues etc.

3) subtract ending equity from the balance

53
Q

what goes in operating activities

A

expenses in cash
income in cash

54
Q

what goes in investment activtities

A

purchase of assets
sale of assets

55
Q

what goes in financial activities

A

stock payments
dividend payments

56
Q

how to find end of year equity given financial statement info sheet

A

beginning year equity
+stock issuances
+net income
-dividends
=end of year equity

ACCT203 (10 decks)

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