BUS A200 Final 1 ACTUAL UPDATED Questions and CORRECT Answers
Terms in this set (96)
Accounting information system that reports on economic activities and financial condition of a
business or other organization
Primary users of financial accounting External users such as investors, lawyers, financial analysts
Primary users of managerial accounting Internal users such as managers and employees
, Main types of business entities Proprietorship, Partnership, Corporation
Proprietorship Most common, one owner, one source of funds, dies with the owner, unlimited
liability
Partnership Minimum of two partners, unlimited liability
Corporation More capital, limited liability, perpetual existence, double taxation
Interests of shareholders vs. interest of creditors Shareholders: dividends, stock value, voting rights
Creditors: interest, loan payment, no voting rights
The accounting equation (main categories) Assets = liabilities + common stock + retained earnings
Assets = liabilities + stockholder's equity
Assets = claims
Accounts reported on balance sheet Assets, liabilities, common stock, retained earnings
Accounts reported on income statement Revenues - Expenses = NI (NL)
Accounts reported on statement of stockholder's equity common stock (beginning CS + earned CS = change in CS), retained earnings (NI -
dividends = RE)
Minimum number of accounts affected by a transaction 2
Effect of revenue on NI Increases net income
Effect of expenses on NI Decreases net income
What happens to the revenue and expense accounts at The accounts are "closed out" and transferred to retained earnings
the end of a period?
Common stock increases which accounts? Assets (cash) and Stockholder's Equity (CS)
Dividends earnings distributed to stockholders (reduces retained earnings but does not
affect NI)
Who gets paid first in liquidation of a company? Creditors
Accounts that limit dividends Cash and Retained Earnings
Cash vs. RE accounts Not the same, NO cash in retained earnings
Calculate the percentage of assets divided by debt or divide debt/stock by assets
owners
"point in time" vs "period of time" Balance sheet = prepared in a point in time; all other statements - over time
Typical financial statement time periods annually, quarterly, monthly
Terms in this set (96)
Accounting information system that reports on economic activities and financial condition of a
business or other organization
Primary users of financial accounting External users such as investors, lawyers, financial analysts
Primary users of managerial accounting Internal users such as managers and employees
, Main types of business entities Proprietorship, Partnership, Corporation
Proprietorship Most common, one owner, one source of funds, dies with the owner, unlimited
liability
Partnership Minimum of two partners, unlimited liability
Corporation More capital, limited liability, perpetual existence, double taxation
Interests of shareholders vs. interest of creditors Shareholders: dividends, stock value, voting rights
Creditors: interest, loan payment, no voting rights
The accounting equation (main categories) Assets = liabilities + common stock + retained earnings
Assets = liabilities + stockholder's equity
Assets = claims
Accounts reported on balance sheet Assets, liabilities, common stock, retained earnings
Accounts reported on income statement Revenues - Expenses = NI (NL)
Accounts reported on statement of stockholder's equity common stock (beginning CS + earned CS = change in CS), retained earnings (NI -
dividends = RE)
Minimum number of accounts affected by a transaction 2
Effect of revenue on NI Increases net income
Effect of expenses on NI Decreases net income
What happens to the revenue and expense accounts at The accounts are "closed out" and transferred to retained earnings
the end of a period?
Common stock increases which accounts? Assets (cash) and Stockholder's Equity (CS)
Dividends earnings distributed to stockholders (reduces retained earnings but does not
affect NI)
Who gets paid first in liquidation of a company? Creditors
Accounts that limit dividends Cash and Retained Earnings
Cash vs. RE accounts Not the same, NO cash in retained earnings
Calculate the percentage of assets divided by debt or divide debt/stock by assets
owners
"point in time" vs "period of time" Balance sheet = prepared in a point in time; all other statements - over time
Typical financial statement time periods annually, quarterly, monthly
