midterm - accounting Flashcards
What are job tasks or functions of an accountant?
- prepare and interpret financial records
- follow budgets
- make business decisions
- maintain and review business records
- prepare budgets
What is the difference between account payable and accounts receivable?
- accounts payable is how much you or business owes someone
- accounts receivable is how much a customer owes you
What must a business do to survive?
- operate at a profit
- attract individuals skillful enough to run the business
What is the difference between management accounting and financial accounting?
- management accounting reports information to managers of the company to assist in decision making, reports are for internal use only
- financial accounting reports information to external users (individuals not involved in day-to-day business operations), such as investors
What is the accounting equation?
Assets = Liabilities + Owner’s Equity
What you own = How it was paid for
Why is accounts receivable an asset?
because it is money that you will be receiving and cash is an asset
entry level accounting job that prepares forms and reports
bookkeeper
What is fiscal year?
- aka financial year or budget year
- period used for calculating annual (yearly) financial statements in business or other organizations
- does not always begin in january and end in december
- runs over any 12 month period
- can be october thru september, august thru july, etc
Penn State University sells most of their assets during football games. They sell $850 worth of sweathshirts, $1142 worth of blankets, and $999 worth of jerseys. They pay rent which is a fixed expense of $850, utilities which are a variable expense of $359 and supplies expense which is a variable of $2500. Did they make a profit or loss?
- revenue: $2991
- exenses: $3709
- loss: $718
Starbucks sells coffee and tea at the local shop. On Mondays they sell $700, Tuesdays they sell $857, Wednesday they sell $998 and Thursdays they sell $475. They have expenses of $854 for coffee supplies which is a variable, $1500 for rent which is a fixed expense, and $540 for cups which is a variable expense. Did they make a profit or loss?
- revenue: $3030
- expense: $2894
- profit: $136
Toys R Us sold all of its assets on black friday. They sold 457 barbie dolls $19.99 each, 884 hot wheel cars at $1.99 each, 441 video games at $29.99 each and $8874 worth of Frozen merchandise. They paid their mortage payment of $11524, a maintenance bill for the heater which is a periodic expense of $1500, real estate taxes of $7451 and telephone bill of $150. Did they make a profit or loss?
- revenue: 9135.43 + 1759.16 + 13225.59 + 8874 = 32994.18
- expenses: 20625.00
- profit: $12369.18
Chik fil et had cash outflow of $874, $21, $552, and $125. They had cash inflow of $129, $367, $11, and $99. Did they bring in or spend more?
- inflow: $606
- outflow: 1572
- spent more/ loss: -966
general increase in value of property that occurs over time
appreciation
decrease in value of property as it becomes old
depreciation
- money you owe for something
- buy now, pay later
- loans/notes or accounts payable
liability
