Accou nting 101 Final Exam K ey
Concepts & Ratios com plete
ver ifi ed solu tions + r ationales
(PASS GUARANTEED)
Accounting Equation - answer Assets = Liabilities + Stockholder's Equity
Assets - answer Resources of a company
Liabilities - answer Assets owed to creditors
Stockholder's Equity - answer Owner's claims
Short Term Assets - answer Will be used < 1 year
Long Term Assets - answer Will be used and benefits > 1 year
Net Income Calculation - answer Revenues - Expenses = Net Income
, Stockholder's Equity Components - answer Common Stock + Retained
Earnings
Retained Earnings Calculation - answer Beginning R.E + Net income -
Dividends = End Retained Earnings
GAAP Assumption: Economic Entity - answer Identify all economic
events with a particular economic entity.
GAAP Assumption: Monetary Unit - answer Need a unit or scale of
measurement (Dollar in US).
GAAP Assumption: Periodicity - answer External users need periodic
information to make decisions.
GAAP Assumption: Going Concern - answer A business entity will
continue to operate indefinitely.
Accrued Revenue - answer Occurs when a company provides goods and
services but has yet to receive compensation.
Accrued Expense - answer Occurs when a company incurs costs but will
not pay until the following period.
Concepts & Ratios com plete
ver ifi ed solu tions + r ationales
(PASS GUARANTEED)
Accounting Equation - answer Assets = Liabilities + Stockholder's Equity
Assets - answer Resources of a company
Liabilities - answer Assets owed to creditors
Stockholder's Equity - answer Owner's claims
Short Term Assets - answer Will be used < 1 year
Long Term Assets - answer Will be used and benefits > 1 year
Net Income Calculation - answer Revenues - Expenses = Net Income
, Stockholder's Equity Components - answer Common Stock + Retained
Earnings
Retained Earnings Calculation - answer Beginning R.E + Net income -
Dividends = End Retained Earnings
GAAP Assumption: Economic Entity - answer Identify all economic
events with a particular economic entity.
GAAP Assumption: Monetary Unit - answer Need a unit or scale of
measurement (Dollar in US).
GAAP Assumption: Periodicity - answer External users need periodic
information to make decisions.
GAAP Assumption: Going Concern - answer A business entity will
continue to operate indefinitely.
Accrued Revenue - answer Occurs when a company provides goods and
services but has yet to receive compensation.
Accrued Expense - answer Occurs when a company incurs costs but will
not pay until the following period.
