COB SEE: Accounting Review | Principles of
Accounting 1 & 2 Review in Preparation for
UWYO COB SEE Spring 2021
Who are the four users of financial information? **** 1. individuals
2. investors and creditors
3. regulators
4. management
(acct 1 - 1.1)
What are the two kinds of accounting? **** 1. financial
2. management
(acct 1 - 1.2)
What is financial mangement? **** providing information for decision making to outside
users
(acct 1 - 1.2)
What is management accounting? **** providing information for decision making to
inside users
(acct 1 - 1.2)
What is the accounting standard adopted by the United States? **** GAAP: Generally
Accepted Accounting Principles
(acct 1 - 1.2)
What is entity assumption? **** business transactions are kept separate from owner
transactions
(acct 1 - 1.3)
What is continuity assumption? **** a business will continue operations for the
foreseeable future
(acct 1 -1.3)
What is the Historical Cost Principle? **** Business resources are stated at actual cost
on the date of acquisition
(acct 1 - 1.3)
, What is Stable-Monetary-Unit Assumption? **** measure in dollars - inflation and
deflation is ignored
(acct 1 - 1.3)
What is the equation used for the balance sheet? (generic accounting equation) ****
Assets = Liabilities + Owner's Equity
(acct 1 - 1.4 and 1.6)
What is the order of the four financial statements? **** 1. income statement
2. statement of retained earnings
3. balance sheet
4. statement of cash flows
(acct 1 - 1.5)
What does the income statement report? **** It reports revenues (earnings) and
expenses (spending) for a period of time
(acct 1 - 1.5)
What does a simple income statement look like? **** add: revenues
less: expenses
= net income or net loss
(acct 1 - 1.6)
What does a statement of retained earnings report? **** it reports the portion of net
income kept in the company over a period of years
(acct 1 - 1.6)
What does a basic statement of retained earnings look like? **** Beginning Retained
Earnings
+Net Income
-Dividends
=Ending Retained Earnings
(acct 1 -1.6)
What does the balance sheet report? **** it reports the financial position of assets,
liabilities, and owner's equity at a specific moment in time
(acct 1 - 1.7)
What does the statement of cash flows report? **** reports cash receipts and cash
payments for operating activities, investing activities (long-term assets), and financing
activities
(acct 1 - 1.7)
What does a statement of cash flows look like? **** +/- cash for by operating activities
+/- cash for investing activities
+/- cash for financing activities
Accounting 1 & 2 Review in Preparation for
UWYO COB SEE Spring 2021
Who are the four users of financial information? **** 1. individuals
2. investors and creditors
3. regulators
4. management
(acct 1 - 1.1)
What are the two kinds of accounting? **** 1. financial
2. management
(acct 1 - 1.2)
What is financial mangement? **** providing information for decision making to outside
users
(acct 1 - 1.2)
What is management accounting? **** providing information for decision making to
inside users
(acct 1 - 1.2)
What is the accounting standard adopted by the United States? **** GAAP: Generally
Accepted Accounting Principles
(acct 1 - 1.2)
What is entity assumption? **** business transactions are kept separate from owner
transactions
(acct 1 - 1.3)
What is continuity assumption? **** a business will continue operations for the
foreseeable future
(acct 1 -1.3)
What is the Historical Cost Principle? **** Business resources are stated at actual cost
on the date of acquisition
(acct 1 - 1.3)
, What is Stable-Monetary-Unit Assumption? **** measure in dollars - inflation and
deflation is ignored
(acct 1 - 1.3)
What is the equation used for the balance sheet? (generic accounting equation) ****
Assets = Liabilities + Owner's Equity
(acct 1 - 1.4 and 1.6)
What is the order of the four financial statements? **** 1. income statement
2. statement of retained earnings
3. balance sheet
4. statement of cash flows
(acct 1 - 1.5)
What does the income statement report? **** It reports revenues (earnings) and
expenses (spending) for a period of time
(acct 1 - 1.5)
What does a simple income statement look like? **** add: revenues
less: expenses
= net income or net loss
(acct 1 - 1.6)
What does a statement of retained earnings report? **** it reports the portion of net
income kept in the company over a period of years
(acct 1 - 1.6)
What does a basic statement of retained earnings look like? **** Beginning Retained
Earnings
+Net Income
-Dividends
=Ending Retained Earnings
(acct 1 -1.6)
What does the balance sheet report? **** it reports the financial position of assets,
liabilities, and owner's equity at a specific moment in time
(acct 1 - 1.7)
What does the statement of cash flows report? **** reports cash receipts and cash
payments for operating activities, investing activities (long-term assets), and financing
activities
(acct 1 - 1.7)
What does a statement of cash flows look like? **** +/- cash for by operating activities
+/- cash for investing activities
+/- cash for financing activities
