Chapter 1 - 4 Flashcards
1
Q
Accounts Payable
A
Current Liabilities
Balance Sheet
2
Q
Accounts Receivable
A
Current Assets
Balance Sheet
3
Q
Accumulated Depreciation - Building
A
Property Plant & Equipment (PPE)
Balance Sheet
4
Q
Accumulated Depreciation - Equipment
A
Property Plant & Equipment (PPE)
Balance Sheet
5
Q
Accumulated Depreciation - Furniture
A
Property Plant & Equipment (PPE)
Balance Sheet
6
Q
Bonds Payable
A
Long Term Liabilities
Balance Sheet
7
Q
Building
A
Property Plant & Equipment (PPE)
Balance Sheet
8
Q
Cash
A
Current Assets
Balance Sheet
9
Q
Common Stock
A
Stockholders Equity
Balance Sheet
10
Q
Copyrights
A
Intangible Assets
Balance Sheet
11
Q
Cost of goods sold
A
Expense
Income Statement
12
Q
Current Maturities of Longterm Debt
A
Current Liabilities
Balance Sheet
13
Q
Deferred Income Tax
A
Longterm Liabilities
Balance Sheet
14
Q
Delivery/Freight-Out Expense
A
Expense
Income Statement
15
Q
Depreciation Expense
A
Expense
Income Statement
16
Q
Dividend Income
A
Revenue
Income Statement
17
Q
Dividends
A
Dividend
Statement of Retained Earnings
18
Q
Equipment
A
Property Plant & Equity (PPE)
Balance Sheet
19
Q
Franchises
A
Intangible Assets
Balance Sheet
20
Q
Furniture
A
Property Plant & Equipment (PPE)
Balance Sheet
21
Q
Goodwill
A
Intangible Assets
Balance Sheet
22
Q
Income Tax Expense
A
Expense
Income Statement
23
Q
Income Tax Payable
A
Current Liabilities
Balance Sheet
24
Q
Insurance Expense
A
Expense
Income Statement
25
Interest Expense
Expense
Income Statement
26
Interest Payable
Current Liabilities
Balance Sheet
27
Interest Revenue
Revenue
Income Statement
28
Inventory
Current Assets
Balance Sheet
29
Land
Property Plant & Equipment (PPE)
Balance Sheet
30
Lease Liabilities
Current Liabilities
Balance Sheet
31
Longterm Notes Payable
Longterm Liabilities
Balance Sheet
32
Salaries & Wages Expense
Expense
Income Statement
33
Salaries & Wages Payable
Current Liabilities
Balance Sheet
34
Sales
Revenue
Income Statement
35
Sales Revenue
Revenue
Income Statement
36
Service Revenue
Revenue
Income Statement
37
ST Investments
Current Assets
Balance Sheet
38
ST Notes Payable
Current Liabilities
Balance Sheet
39
ST Notes Receivable
Current Assets
Balance Sheet
40
Stock Investments
Longterm Investments
41
Supplies
Current Assets
Balance Sheets
42
Supplies Expense
Expense
Income Statement
43
Trademarks/Names
Intangible Assets
44
Unearned Revenue
Current Liabilities
Balance Sheet
45
Utilities Expense
Expense
Income Statement
46
What is the basic accounting question?
Assets = Liabilities + Stockholder’s Equity
47
What is the expanded accounting equation?
Assets = Liabilities + Common Stock + Beg. Retained Earnings + Revenue - Expenses - Dividends
48
What makes Debits increase and Credits decrease?
Expenses, Assets, and Dividends
49
What makes Credits increase and Debits decrease?
Liabilities, Equity, and Revenues
50
What is the normal account balance for Cash?
Debit
51
What is the normal account balance for Dividends?
Debit
52
What is the normal account balance for Accounts Payable?
Credit
53
What is the normal account balance for Accounts Receivable?
Debit
54
What is the normal account balance for Common Stock?
Credit
55
What is the normal account balance for Retained Earnings?
Credit
56
What is the normal account balance for Revenues?
Credit
57
What is the normal account balance for Accumulated Depreciation?
Credit
58
What is the normal account balance for Unearned Service Revenue?
Credit
59
What is the normal account balance for Prepaid Insurance/Rent/Other?
Debit
60
What is the normal account balance for Building?
Debit
61
What is the normal account balance for Expenses?
Debit
62
What is the normal account balance for Wages Payable?
Credit
63
What is the normal account balance for Patent?
Debit
64
What is the normal account balance for Supplies?
Debit
65
How does Net Income impact Stockholders Equity?
Retained Earnings Increase
Stockholders Equity Increase
66
How does Net Loss impact StockHolders Equity?
Retained Earnings Decrease
Stockholders Equity Decrease
67
How do you calculate Ending Retained Earnings?
Beginning Retained Earnings + Net Income - Dividends
68
Sole Proprietorship
Owned and Controlled by one person
69
Partnership
Two or more owners
70
Corporation
Separate legal entity incorporated by a group of shareholders who share ownership & pursuer a common goal
71
What are the advantages of a Sole Proprietorship?
- Easy to set up
- Lower taxes
- Owner control
72
What are the disadvantages of a Sole Proprietorship?
- Personal Liability
- Hard to transfer ownership
73
What are the advantages of a Partnership?
- Easy to set up
- Lower taxes
- Shared control
- Broader resources
74
What are the disadvantages of a Partnership?
- Personal Liability
- Hard to transfer
75
What are the advantages of a Corporation?
- No personal liability
- Easy to transfer ownership
- Easy to raise funds
76
What are the disadvantages of a Corporation?
- Harder to set up
- Higher taxes
77
How do you calculate Income Statement?
Revenue - Expense = Net Income or Net Loss
78
Accural-Basis Accounting
Transactions are recorded in the periods in which the events occur
79
When are Revenues recognized when using Accrual-Basis Accounting?
When the performance obligations are satisfied, even if cash is NOT received
80
When are Expenses recognized when using Accrual-Basis Accounting?
When incurred (financially obligated) even when cash is NOT paid
81
Adjusting Entries - Deferrals - Prepaid Expenses
Expenses paid in cash and recorded as assets before they are used or consumed
82
Adjusting Entries - Deferrals - Unearned Revenues
Cash received and recorded as liabilities before revenue is earned
83
Adjusting entries - Accruals - Accrued Revenues
Revenues for services performed but not received in cash or recorded
84
Adjusting entries - Accruals - Accrued Expenses
Expenses incurred but not yet paid in cash or recorded
85
How do you record Depreciation?
Dr. Depreciation Expense
Cr. Accumulated Depreciation
86
Accumulated Depreciation
Contra-Asset
Normal Balance is a Credit
87
How do you determine Interest Cost?
Interest = Face Value of a Note x Annual Interest Rate x Time in Terms of One Year
88
Something is too high
It is overstated
89
Something is too low
It is Understated
90
Prepaid Expenses accounts before adjustment
Assets overstated
Expenses understated
91
What is the adjusting entry of Prepaid Expenses?
Dr. Expenses
Cr. Assets or Contra Assets
92
Unearned Revenues accounts before Adjustment
Liabilities overstated
Revenues understated
93
What is the adjusting entry for Unearned Revenues
Dr. Liabilities
Cr. Revenues
94
Accrued Revenues accounts before adjustment
Assets understated
Revenues understated
95
Adjusting entry for Accrued Revenues
Dr. Assets
Cr. Revenues
96
Accrued expenses account before adjustment
Expenses understated
Liabilities understated
97
Adjusting entry for Accrued expenses
Dr. Expenses
Cr. Liabilities
98
Step 1 of preparing a Financial Statement
Prepare a Trial Balance
99
Step 2 of preparing a Financial Statement
Prepare adjusting entries
100
Step 3 of preparing a Financial Statement
Prepare an adjusted trial balance
101
Step 4 of preparing a Financial Statement
Prepare Income Statement
102
Step 5 of preparing a Financial Statement
Prepare the retained earning statement
103
Step 6 of preparing a Financial Statement
Prepare the Balance Sheet
104
Step 7 of preparing a Financial Statement
Prepare the closing entries
