Examen 1 (Cap 1 y 2)

Question 1

They identify and describe trranssactions and events entering the accounting system.
(Papel o record que da infromacion de una transaccion, que sirven como evidencia de esta y se usan para hacer entradas de contabilidad.

Answer 1

Source documents

Question 2

Business transactions and events are the starting points of financial statements

Answer 2

True

Question 3

The process from transactions to financial statements:

Answer 3

1. Identify transaction and event from source documents
2. Analyze transaction and event using the accounting equation
3. Record relevant transactions and events in a journal
4. Post journal information to ledger accounts.
5. Prepare and analyze trial balance and financial statements.

Question 4

Examples of Source Documents

Answer 4

Bills from suppliers
Sales receipts
Checks
Purchase orders
Payroll records
Bank statements

Question 5

Record of increases and decreases in a specific asset, liability, equity, revenue, or expense.

Answer 5

Account

Question 6

Record of all accounts and their balances

Answer 6

General Ledger

Question 7

Asset Accounts

Answer 7

Cash, Inventory, Equipment, Accounts Receivable, Notes Receivable, Supplies, Prepaid Accounts, Buildings, Land

Question 8

Accounting Equation

Answer 8

Assets = Liabilities + Equity

Question 9

Equity Equation`

Answer 9

Capital - Withdrawals + Revenue - Expenses

Question 10

Liability Accounts

Answer 10

Accounts Payable, Notes Payable, Accrued Liabilities, Unearned Revenue

Question 11

E = Capital - WithdrawalsssEquity Accounts

Answer 11

Owner, Capital, Owner, Withdrawals, Revenues , Expenses

Question 12

Revenues and common stock _________ equity. Expenses and dividends _________ equity.

Answer 12

Increase, decrease

Question 13

Collection of all accouints and their balances for an accounting system.

Answer 13

Ledger

Question 14

List of all accounts and includes an identifying number for each account

Answer 14

Chart of Accounts

Question 15

Represents a ledger account and is used to show the effects of transactions

Answer 15

T-account

Question 16

Difference between the increases and decreases in an account

Answer 16

Account Balance

Question 17

Steps to analyze transactions

Answer 17

Identify transactions and source documents
Analyze the transaction using the accounting equation
Record the journal entry
Post the entry

Question 18

Trial Balance steps

Answer 18

List each account title and its amount (from ledger) in the trial balance
Compute the total of debit balances and the total of credit balances
Verify total debit balances equal total credit balances

Question 19

Financial statement that lists all the accounts in a company’s general ledger along with their debit or credit balances.

Answer 19

Trial Balance

Question 20

Reports that provide information about the financial performance and position of a company.

Answer 20

Financial Statements

Question 21

eports revenues less expenses incurred by a business over a period of time

Answer 21

Income statement

Question 22

Reports changes in equity over the reporting period from net income or loss and from any owner investments or withdrawals over a period of time

Answer 22

Statement of owner’s equity

Question 23

Reports the financial position (types and amounts of assets, liabilities, and equity) at a point in time

Answer 23

Balance sheet

Question 24

Accounting Period

Answer 24

A specific period of time for which financial reports are prepared

Question 25

Time period principle

Answer 25

An accounting principle that assumes that a company’s activities can be divided into specific time periods for financial reporting

Question 26

Intermin financial statements

Answer 26

Less than a fiscal year

Question 27

Accrual basis accounting

Answer 27

Uses the adjusting process to recognize revenues when earned and expenses when incurred with revenues.

Question 28

Cash basis accounting -

Answer 28

Revenues are recognized when cash is received and expenses are recognized when cash is paid. Accrual accounting increases the comparability of financial statements.

Question 29

Requires that revenue be recorded when goods or services are provided to customers and at an amount expected to be received from customers

Answer 29

Revenue recognition principle

Question 30

Aims to record expenses in the same period as the revenues recognized as a result of these expenses

Answer 30

Expense recognition principle

Question 31

Why are adjusting entries recorded?

Answer 31

To bring an asset or liability account balance to its proper amount.

Question 32

Why do adjustments exist?

Answer 32

For transactions that extend over more than one period

Question 33

Three steps for making an adjustment:

Answer 33

Determining current account balance
Determining what the balance should equal
Recording the adjusting entry to get from step 1 to step 2

Question 34

Items paid for in advance of receiving their benefits

Answer 34

Prepaid Expenses, including depreciation. They are assets.

Question 35

Process of allocating the cost of plant assets over their expected useful lives

Answer 35

Depreciation

Question 36

Describes the asset less its contra asset

Answer 36

Book value

Question 37

Liabilities created by cash received in advance of providing products or services.

Answer 37

Unearned revenues

Question 38

Costs or expenses incurred in a periof but are both unpaid and unrecorded

Answer 38

Accrued expenses

Question 39

Salaries, interest, rent, and taxes

Answer 39

Common accrued expenses

Question 40

Revenyues earned in a period that are both unrecorded and not yet received in cash

Answer 40

Accrued revenues

Question 41

A list of accounts and balances prepared after adjusting entries are recorded and posted to the ledger

Answer 41

Adjusted Trial Balance

Question 42

How to prepare financial statements

Answer 42

Directly from info in the adjusted trial balance

Question 43

Flow of information from one statement to other (Financial Statements)

Answer 43

Income Statement, Statement of Owners Equity (Uses Net Income or loss from previous statement), Balance Sheet (uses capital balance from previous statement)

Question 44

Used to evaluate operating results by measuring the ratio of a company’s net income to sales.

Answer 44

Profit margin ( Net Income/ Net Sales Revenues )