Chapter 1 - College Accounting: A Practical Approach Flashcards
What is a sole proprietorship?
One owner
What is a partnership?
At least two owners
What is a corporation?
Owned by shareholders
What is a No-For-Profit?
No owners - for the benefit of society
What are some examples of external stakeholders?
Lenders
Shareholders
Government
Customers
Investors
Communtiy
What are some examples of internal stakeholders?
Officers
Controllers
Managers
Internal Auditors
Sales Staff
What are some examples of duties that a Financial Accountant handles?
Statement preparation and analysis
Auditing
Regulatory Issues
Planning
What are some examples of duties that a Managerial Accountant handles?
Cost accounting
Budgeting
Internal Auditing
Management Consulting
General Accounting
What are some duties that the Tax Accountant handles?
Tax preparation
Tax planning
Tax regulatory compliance
Tax consulting
What are some of the duties of other accounting related professionals nals?
Analysts
Appraisers
Underwriters in Insurance e
Planners
Traders
Managers of Accounting
Consultants
What is the general accounting designation?
CPA
What does CPA stand for?
Chartered Professional Accountant
What is a CA?
Chartered Accountant
What is a CMA
Certified Management Accountant
What is a CGA?
Certified General Accountant
What are the 6 main accounting standards?
Analyzing
Recording
Classifying
Summarizing
Reporting
Interpreting
What accounting Standard is the following:
“Looking at what happened and how it affected the business”
Analyzing
What accounting standard is the following?
“Putting the information into an accounting system”
Recording
What accounting standard is the following?
“To group all the same activities together”
Classifying
What accounting standard is the following?
“Creating totals based on a category or date”
Summarizing
What accounting standard is the following?
“Issue reports that tell the result of the accounting functions”
Reporting
What accounting standard does the following fall under?
“Examining reports and providing feedback to users”
Interpreting
What does “GAAP” stand for?
Generally Accepted Accounting Principles
What are the guidelines set forth that must be followed in the accounting process that ensures everyone is preparing and interpreting reports the same way called?
GAAP
What does IFRS stand for?
International Financial Reporting Standards
When is IFRS used?
When your company has shares listed on stock exchanges
What is the word used to describe the moral principles that guide conduct of individuals in the industry?
Ethics
What is the following called:
Assets = Liabilities + Owners Equity
Accounting equation
Items of value owned by a company are called…
Assets
Obligations made by a company are called…
Liabilities
An owners investment into their company is called…
Capital
Is capital always cash?
NO
Who’s portion of the assets are the liabilities?
Creditors
Who owns the Owners Equity portion of the assets?
Owners
What are equities?
Financial claims against the assets
Can the accounting equation be stated in different ways?
YES
When the make up of assets is changed but the total assets stays the same, this is called?
Shift in assets
What report is the breakdown of the accounting equation?
Balance Sheet
What 3 bits of information are listed in the header and what order do they come in?
Company Name
Report Name
Date
What does a single line mean on the reports?
Subtotalling
What does a double line on a report mean?
Total
What should always be aligned on reports to avoid errors?
Numbers
Can a balance sheet tell you if the company will turn a profit?
NO
On a balance sheet, where do you put the $?
Top lines and totals
What do we call the amount earned when a 0service is rendered or a sale is made?
Revenue
What does revenue increase?
Owners Equity
When do you record revenue?
When is is earned (not necessarily when paid)
Define an expense
Costs faced to run the business
How is the owners equity effected when an expense is incurred?
Decreases owners equity
Define Net Income
When revenue is greater than expenses
If expenses are greater than revenue, what is this considered?
Net Loss
What are withdrawals?
Assets the owner(s) withdraw for personal use
How is owners equity effected when a withdrawal occurs?
Decreases owners equity
What is the difference between the accounting equation and the expended accounting equation?
Expended lists the actual accounts that are under each classification
What order do the financial statements come in?
- Income Statement
- Statement of Owners Equity
- Balance Sheet
Which report will show the net loss or net income?
Income statement
Which financial report shows a period of time?
Income Statement
Which financial statement shows a moment of time?
Balance Sheet d
Where are the $ signs place on an income report?
Top of the column and totals
Are withdrawals on the income statement?
NO
What is the inside column of an income statement used for?
Subtotalling
What accounts are shown on the income statement?
Revenue & Expenses
What changes are reflected on the Statement of Owners Equity?
Changes to the owners capital
What increases owners capital?
Owners investment & Net income
What decreases owners capital?
Withdrawals and net loss
What are external users?
People not directly involved in running the organization?
Who are internal users?
People directly involved in running the business
What type of accountant is usually on staff?
Managerial accountant
What accounts are a subdivision of owners equity?
Revenue
Expenses
Withdrawals
Capital
Does net income / loss show the amounts listed on account?
YES
