Accounting 251 Exam 1 Study Guide UPDATED ACTUAL
Questions and CORRECT Answers
The two main functions of accounting are Measurement and Communication
The accounting equation is Assets = Liabilities + Stockholders' Equity
The key financial statements are the Balance Sheet, Income Statement, Statement of Stockholder's Equity, and
Statement of cashflows
Equity is broken up into Common Stock and Retained Earnings
Retained Earnings is comprised of Revenue, Expenses and Dividends
Net Income= Revenues - Expenses (Income Statement)
Balance Sheet has assets, liabilities, stockholders equity
Cash flow tracks the movement of actual cash in and out of the company
Cash Flow is broken up into 3 activities Operating, Financing, and Investing
How do we find the ending retained earnings? Beginning retained earnings + Net income - Dividends
When an account is created "on account" there is NO CASH INVOLVED
On account means ____________ or ____________ Receivable Or Payable
Revenues are recognized when __________ EARNED Services are performed or Goods are Received
Expenses are recognized when USED/INCURRED
Accrual is Action happening before the cash was paid or received
Deferral is Cash that is paid or received before the effort was completed
Adjusting entries are made at the____ of the period (i.e. end, revenues and expenses
12/31/XX) to account for _______ and ______ that were
earned and/or incurred during the year but have not yet
been recognized (recorded)
To find the ending supplies we use the formula Beginning Supplies + Purchases - Used Supplies
Every journal entry has a _______ & ___________ Debit and Credit
On the journal entry debit is (top) on the line
Questions and CORRECT Answers
The two main functions of accounting are Measurement and Communication
The accounting equation is Assets = Liabilities + Stockholders' Equity
The key financial statements are the Balance Sheet, Income Statement, Statement of Stockholder's Equity, and
Statement of cashflows
Equity is broken up into Common Stock and Retained Earnings
Retained Earnings is comprised of Revenue, Expenses and Dividends
Net Income= Revenues - Expenses (Income Statement)
Balance Sheet has assets, liabilities, stockholders equity
Cash flow tracks the movement of actual cash in and out of the company
Cash Flow is broken up into 3 activities Operating, Financing, and Investing
How do we find the ending retained earnings? Beginning retained earnings + Net income - Dividends
When an account is created "on account" there is NO CASH INVOLVED
On account means ____________ or ____________ Receivable Or Payable
Revenues are recognized when __________ EARNED Services are performed or Goods are Received
Expenses are recognized when USED/INCURRED
Accrual is Action happening before the cash was paid or received
Deferral is Cash that is paid or received before the effort was completed
Adjusting entries are made at the____ of the period (i.e. end, revenues and expenses
12/31/XX) to account for _______ and ______ that were
earned and/or incurred during the year but have not yet
been recognized (recorded)
To find the ending supplies we use the formula Beginning Supplies + Purchases - Used Supplies
Every journal entry has a _______ & ___________ Debit and Credit
On the journal entry debit is (top) on the line
