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Accounting > Chapter 3 > Flashcards

Chapter 3 Flashcards

1
Q

_____ Activities: Acquire capital from investors and creditors

A

Financial

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2
Q

______ Activities: Invest in productive resources (ie. equipment)

A

Investing

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3
Q

_____ Activities: generate wealth (manufacturing and selling tv sets)

A

Operating

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4
Q

Assets=

A

Liability + Equity

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5
Q

“Probable future economic benefits obtained or controlled by a business”

A

Asset

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6
Q

Probable future sacrifice of future economic benefits

A

Liability

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7
Q

Residual interest in the assets of a business that remains after deducting liabilities (Net assets, net worth)

A

Owners Equity

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8
Q

Net Income =

A

Revenue - Expenses + Gains - Losses

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9
Q

Revenue -Expenses + Gains - Losses=

A

Net Income

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10
Q

increase in owner’s equity resulting from central operating activities

A

revenue

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11
Q

decrease in owner’s equity resulting from central operating activities

A

expense

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12
Q

increase in owners’ equity resulting from peripheral activities

A

gain

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13
Q

decrease in owners’ equity resulting from peripheral activities

A

loss

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14
Q

______ summarizes financial position as of a point in time:

A

Balance Sheet

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15
Q

______ summarizes financial performance for a period of time

A

Income Statement

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16
Q

______ summarizes cash inflows and outflows for a period of time

A

Cash Flow statement, bitch

17
Q

Net Cash Flows=

A

Operating +/- Investing +/- Financing net cash flows

18
Q

Cash Flows consumed or generated by sales of goods and services

A

Operating

19
Q

cash flows consumed or generated by acquisition or disposition of non-current assets

A

Investing

20
Q

Cash flows provided by or paid to capital providers

A

Financing

21
Q

The balance sheet and income statement are linked via

A

RETAINED EARNINGS BICHHHH!!!!

22
Q

Assets = Liabilities + CC + RE where CC= and RE=?

A 
CC= Contributed Capital
RE= Retained Earnings
23
Q

Asset:

Debit or Credit?

A

Debit

24
Q

Expense:

Debit or Credit?

A

Debit

25
Q

Liability:

Debit or Credit?

A

Credit

26
Q

Equity:

Debit or Credit?

A

Credit

27
Q

Revenue:

Debit or Credit?

A

Credit

28
Q

Accrual Accounting:

A

reports on effects of events that ultimately have cash effect

29
Q

Cash Flow accounting:

A

Reports cash receipts and disbursements as they occur.

30
Q

Adjusting Entries are required for: (3)

A
  1. Recognizing revenue for the period
  2. Matching expenses with revenues they helped generate
  3. Adjusting entries are required every time financial statements are prepared to comply with GAAP

Accounting (3 decks)

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