Accoun ng 203 UTK Final Exam| Ques ons and answers
| Updated RATED A+ 2026
What is a business?
Organiza on that assembles and processes basic resources, such as materials and labor, to
provide goods and services to customers
Three types of businesses
service, merchandising, manufacturing
Three forms of business
Proprietorship, partnership, corpora on
Accoun ng
iden fies, measures, records, and communicates financial informa on about a company's
business ac vity
Accoun ng is three things:
recording, summarizing, and repor ng
Types of accoun ng
financial and managerial
Three types of business ac vi es:
1. opera ng- day to day opera ons to make profit
2. inves ng- buying or selling assets to generate revenue
3. financing- issuance or repayment of debt & equity or the payment of dividends
Financial statements provide
informa on that helps investors, creditors, and others make judgements that serve as the basis
for the various decisions they make
Financial statements in order
1. balance sheet beginning of period
- 2,3,4 (period of me statements) I/S, ret Earning, State Cash flow
5. balance sheet end of period
, Balance sheet
reports the assets owned by a company and the (claims against those resources) (creditors +
owners) at a specific point in me
Accoun ng equa on
Assets = Liabili es + Owner's Equity
Liquidity
ability to pay its obliga ons as they become due
Working capital=
current assets - current liabili es
Current ra o=
current assets / current liabili es
Income statement
reports how well the company has performed over a period of me
Revenues
increase in net assets that result from the sale of product or service
Gains
increase in net assets that result from incidentals
Expenses
costs of resources used to create revenue during a period
Losses
decrease in net assets that occur from incidental reasons
2 income statement formats
single step and mul -step
Gross Margin
Net sales - Cost of goods sold (COGS)
income from opera ons equa on
| Updated RATED A+ 2026
What is a business?
Organiza on that assembles and processes basic resources, such as materials and labor, to
provide goods and services to customers
Three types of businesses
service, merchandising, manufacturing
Three forms of business
Proprietorship, partnership, corpora on
Accoun ng
iden fies, measures, records, and communicates financial informa on about a company's
business ac vity
Accoun ng is three things:
recording, summarizing, and repor ng
Types of accoun ng
financial and managerial
Three types of business ac vi es:
1. opera ng- day to day opera ons to make profit
2. inves ng- buying or selling assets to generate revenue
3. financing- issuance or repayment of debt & equity or the payment of dividends
Financial statements provide
informa on that helps investors, creditors, and others make judgements that serve as the basis
for the various decisions they make
Financial statements in order
1. balance sheet beginning of period
- 2,3,4 (period of me statements) I/S, ret Earning, State Cash flow
5. balance sheet end of period
, Balance sheet
reports the assets owned by a company and the (claims against those resources) (creditors +
owners) at a specific point in me
Accoun ng equa on
Assets = Liabili es + Owner's Equity
Liquidity
ability to pay its obliga ons as they become due
Working capital=
current assets - current liabili es
Current ra o=
current assets / current liabili es
Income statement
reports how well the company has performed over a period of me
Revenues
increase in net assets that result from the sale of product or service
Gains
increase in net assets that result from incidentals
Expenses
costs of resources used to create revenue during a period
Losses
decrease in net assets that occur from incidental reasons
2 income statement formats
single step and mul -step
Gross Margin
Net sales - Cost of goods sold (COGS)
income from opera ons equa on
