Exam 1 Financial Accounting

Question 1

Cost

Answer 1

Actual money paid

Question 2

Partnership

Answer 2

Owned by 2 individuals or more

Liable to creditors

Question 3

What does GAAP stand for

Answer 3

Generally Accepted Accounting Principles

Question 4

What are the 2 Ethics of Accounting?

Answer 4

Relevant Information

Reliable Information

Question 5

What is on the left side of a t account?

Answer 5

Debit

Question 6

What 2 things does paid in capital consist of?

Answer 6

Common Stock

Retained Earnings

Question 7

Retained Earnings =

Answer 7

Beginning Balance + Net Income or - Net Loss - Dividends = End Balance

Question 8

Net Income

Answer 8

Revenue- Expenses = profit or loss

Question 9

What are the 4 forms of business?

Answer 9

Proprietorship
Partnership
Corporation
Limited Liability

Question 10

What are the 4 users of accounting?

Answer 10

Individuals
Investors / Creditors
Taxes
Non Profit

Question 11

Going Concern

Answer 11

Continue indefinitely

Question 12

Entity

Answer 12

Separate

Question 13

What is the lengthier accounting equation?

Answer 13

Assets = Liabilities + Common Stock - Dividends - Revenue + Expenses

Question 14

What is on the right side of the t account?

Answer 14

Credits

Question 15

What 3 things are increased by credit? (LCR)

Answer 15

Liabilities
Common Stock
Revenue

Question 16

Accounting Equation

Answer 16

Asset = Liability + Capital

Question 17

What 3 things are increased by debits?(ADE)

Answer 17

Assets
Dividends
Expenses

Question 18

What does FASB stand for?

Answer 18

Financial Accounting Standards Board

Question 19

Reliability

Answer 19

Objective Evidence

Question 20

Accounting System consists of which 4 things (MAPC)

Answer 20

Measuring activities
Accounting used to make decisions
Processes Data
Communicates Decisions

Question 21

Asset

Answer 21

Something of value that has a future benieft

Question 22

Limited Liability Company

Answer 22

Not liable

Question 23

FASB states that accounting should be what 4 things?

Answer 23

Relevant
Reliable
Comparable
Consistent

Question 24

Who was GAAP created by?

Answer 24

FASB

Question 25

Proprietorship

Answer 25

Owned by 1 individual

Liable to creditors

Question 26

Corporation

Answer 26

Stockholders not liable

Has a state charter

Question 27

Monetary Unit

Answer 27

U.S. Money

Question 28

Statement of cash flow consist of what 3 things?

Answer 28

Operating income
Investing
Financing

Question 29

Operating income =

Answer 29

Revenue - Expenses + Depreciation

Question 30

Investing

Answer 30

The purchase or sale of a fixed asset

Question 31

Financing

Answer 31

Repurchasing or issuing stocks and bonds