Lecture 02 - Part I – Financial Accounting

Question 1

What two groups of Accounts do you know? (CFS) Effekt on Balance sheet? (4)

Answer 1

Position

• Information on assets and liabilities
• opening balance from the the balance sheet

Performance

• Information on revenues and expenses
• opening balance is 0

Question 2

What are the components in the accounting cycle of a company? (3)

Answer 2

Opening
Contains the position account (assets and the liabilities) of a firm, at the beginning of the accounting periode.

Recording
Recorded Transactions during the year.

Closing
The balance of the accounts at the year end will be summarized in the

• balance sheet
• income statement.

Question 3

What are common accounts for
Expenses? (5)

Answer 3

• Cost of sales
  __
• Salary / Wages
• Rent
• Engery
• Maintenance

Question 4

What are common accounts for
Revenues? (2)

Answer 4

• Sales revenue / Dividents
• Interest revenue

Question 5

What type of information does the balance sheet provide? (2)

• What is the typical order in which accounts are listed? (5)

Answer 5

The balance sheet provides information about a business on a specific date, specifically regarding its assets, liabilities, and equity.

Therefore it summarizes the fortune and the debts of a company.

Question 6

⭐What is the purpose of the …

• Opening: Balance sheet
• Closing: Income Statement
• Main Metrics, for Profit and Loss (3)

Answer 6

Balance sheet

• opening balance zero,
• at the beginning of the period.

Income statement

• summarizes expenses & revenues (profit / loss),
• at closing date.

Question 7

Definition:
Cash equivalent (2)

Answer 7

Short term, high liquid investments ..

• that mature in three months or less,
• can be easily converted to cash.

Question 8

Definition:
Borrowings
How is it reflected in the general journal?

Answer 8

Titeled Notes payable.

When a company borrows money.It normally signs a promissory note agreeing to pay the money back (including interest) hence, the little notes payable.

Question 9

What are some examples of revenue accounts? (2)

Answer 9

Question 10

What are some examples of asset accounts? (8)

Answer 10

Question 11

What are some examples of expense accounts? (8)

Answer 11

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Question 12

What are some examples of equity accounts? (2)

Answer 12