CHPT 1 Flashcards
liabilities included on the balance sheet are
Accounts payable, Notes Payable and Wages Payable
what appears on both the income statement and the statement of Retained Earnings
Net Income
Net Income distributed as dividends can be found on
the statement of Retained Earnings
What does a trial balance represent
the order of accounts on a trial balance is as follows: Assests, Liabilities, Stockholders Equity, Dividends, revenues and expenses
Accounts receivable is what type of account
Accounts receivable is an asset reported on the balance sheet
Income Statement (statement of operations)
the heading of the income statement identifies who, what and when, the name of the business, the title of report and the time period covered by financial statement.
A company like apple will translate all any foreign currency into a US dollar- basically assuming all business was done in the us
this is known as the unit of measure assumption
how is net income calculated?
Revenue-Expenses= Net Income
how can I calculate retained earnings?
Retained Earnings = Beginning period retained earnings + net income - stock dividends
Assest Formula
Assests=Liabilities + Stockholders Equity
Net Income Formula
Net Income = Revenue - Expenses
How do you calculate Ending Retained Earnings?
Ending RE= Beginning RE + Net Income - Dividends
How do you calculate Ending Cash?
Ending Cash = Beginning Cash + CF from Operating Activities + CF from investing activities + CF from Financing Activities.
What account is Amounts owed to suppliers
Accounts Payable
A business’s right to collect on Account
Accounts Receivable
What type of account is Currency and bank account balances
Cash
What type of account is common stock issued to shareholders?
Common stock
what type of account are Warehouses, Stores and offices
buildings
What type of account is merchandise held for sale
Inventory
What type of accounts Amounts owed for promissory notes
Notes Payable
What type of account is Accumulated profits for the company
Retained Earnings
What financial statement indicates that a corporation will have sufficient resources to pay its liabilities
Balance Sheet
What statement indicates that a corporation has gained a profit
Income Statement
