Principles of Accounting

Question 1

What are the 5 principles in accounting

Question 2

Define Accounting, financial accounting, investors, creditors, assets, liabilities, shareholders’ equity

Answer 2

a company’s net worth or the total dollar amount that would be returned to its shareholders if the company is liquidated after all debts are paid off

Question 3

relate assets, liabilities and shareholders’ equity

Answer 3

assets-liabilites = shareholders’ equity

Question 4

Define revenue, operating expenses, profits (dividends, retained earnings), capital expenditures

Question 5

relate profits, revenues and operating expenses

Question 6

Income statement

Question 7

statement of earned surplus, accumulated retained earnings

Question 8

net fixed assets

Question 9

change in cash position

Question 10

what are the financial indicators to assess the health of a company

Question 11

working capital, current ratio, quick ratio

Question 12

debt ratio, equity ratio, debt to equity ratio

Question 13

times-interest-earned-ratio

Question 14

inventory turnover ratio, average collection period, fixed asset turnover ratio, total asset turnover ratio