ACING MBA 510 FOUNDATION OF ACCOUNTING EXAM 1
REVIEW WITH THE LATEST A+ QUESTIONS AND ANSWERS
STUDY COMPANION.
4 General Accounting Principles
1. Measurement/Cost Principle:
-Based on actual cost
-Measured on a cash or equal-to-cash basis
2. Revenue Recognition Principle:
-Revenue Recognized when goods/services provided and at
the amount expected to be received from the customer
3. Expense Recognition/Matching Principle
-Company records incurred expenses generating reported
revenue
-Example would be cost of renting office space
4. Full Disclosure Principle
-Company reports the details behind financial statements
that would impact users' decisions
-Often In the footnotes to statements
Accounting Equation
Data Analytics
process of analyzing data to identify meaningful relations and trends
Data Visualization
Graphical presentation of data
Fraud Triangle
opportunity
pressure ("Incentive")
rationalization ("Attitude")
Financial Accounting Standards Board (FASB)
-the primary accounting standard-setting body in the US
-4 principles:
, 1. Objectives
2. Qualitative Characteristics
3. Elements
4. Recognition & Measurements
Ethical Decision Making Process
3 Steps:
1. Identify Ethical Concerns
2. Analyze Options
3. Make Ethical Decision
Balance Sheet
-A financial statement that reports assets, liabilities, and owner's equity on a SPECIFIC
DATE
-Reports the financial position of a company at a SPECIFIC DATE/Point in time
Return on Assets Formula (ROA)
Debt Ratio Formula
Acid-test (quick) ratio
-Measure of a merchandiser's ability to pay its current liabilities (referred to as liquidity)
-"Quick Assets"/Current Liabilities
-Quick assets are cash, short-term investments, current receivables)
Inventory Turnover Ratio
Days' Sales in Inventory Ratio
Cost-to-Retail Ratio
Cost of Goods Available for Sale/Retail of Goods Available for sale
Profit Margin
net income/net sales
Key words to Look For in Account Titles
Prepaid/Receivable - ALWAYS an Asset
Payable/Unearned - ALWAYS a Liability
Generally Accepted Accounting Principles (GAAP)
-Set of accounting standards that is used in the preparation of financial statements
-Information should have a) Relevance and b) Faithful Representation
REVIEW WITH THE LATEST A+ QUESTIONS AND ANSWERS
STUDY COMPANION.
4 General Accounting Principles
1. Measurement/Cost Principle:
-Based on actual cost
-Measured on a cash or equal-to-cash basis
2. Revenue Recognition Principle:
-Revenue Recognized when goods/services provided and at
the amount expected to be received from the customer
3. Expense Recognition/Matching Principle
-Company records incurred expenses generating reported
revenue
-Example would be cost of renting office space
4. Full Disclosure Principle
-Company reports the details behind financial statements
that would impact users' decisions
-Often In the footnotes to statements
Accounting Equation
Data Analytics
process of analyzing data to identify meaningful relations and trends
Data Visualization
Graphical presentation of data
Fraud Triangle
opportunity
pressure ("Incentive")
rationalization ("Attitude")
Financial Accounting Standards Board (FASB)
-the primary accounting standard-setting body in the US
-4 principles:
, 1. Objectives
2. Qualitative Characteristics
3. Elements
4. Recognition & Measurements
Ethical Decision Making Process
3 Steps:
1. Identify Ethical Concerns
2. Analyze Options
3. Make Ethical Decision
Balance Sheet
-A financial statement that reports assets, liabilities, and owner's equity on a SPECIFIC
DATE
-Reports the financial position of a company at a SPECIFIC DATE/Point in time
Return on Assets Formula (ROA)
Debt Ratio Formula
Acid-test (quick) ratio
-Measure of a merchandiser's ability to pay its current liabilities (referred to as liquidity)
-"Quick Assets"/Current Liabilities
-Quick assets are cash, short-term investments, current receivables)
Inventory Turnover Ratio
Days' Sales in Inventory Ratio
Cost-to-Retail Ratio
Cost of Goods Available for Sale/Retail of Goods Available for sale
Profit Margin
net income/net sales
Key words to Look For in Account Titles
Prepaid/Receivable - ALWAYS an Asset
Payable/Unearned - ALWAYS a Liability
Generally Accepted Accounting Principles (GAAP)
-Set of accounting standards that is used in the preparation of financial statements
-Information should have a) Relevance and b) Faithful Representation
