Solutions for Horngren's
Accounting.
Accounting - ANSWERSThe system that measures business activities, processes that
information into reports and financial statements, and communicates the results or
findings to decision makers.
Accounting equation - ANSWERSThe most basic tool of accounting: Assets = Liabilities
+ Equity
Bookepping - ANSWERSA procedural element of accounting; the keeping of the
financial records and the recording of financial information.
Accounting <> Bookepping
Accounting = Total
Bookepping = A portion of the accounting process
Asset - ANSWERSAn economic resource that is expected to be of benefit in the future.
Examples: Cash, Accounts receivable, Note receivable, Land, Prepaid expenses,
Equipment, Furnitures, etc.
Accounts payable - ANSWERSThe oral or implied promise to pay off debts arising from
credit purchases (To buy sth "ON ACCOUNT", "ON CREDIT"). A liability that is backed
by the general reputation and credit standing of the debtor.
Accounts receivable - ANSWERSAn asset; a promise to receive cash in the future from
customers to whom the business has sold goods or services. (To sell sth "ON
ACCOUNT", "ON CREDIT").
Liability - ANSWERSAn economic obligation (a debt) payable to an individual or an
organization outside the business.
Examples: Accounts payable, Note payable, Unearned revenue.
Owner's Equity - ANSWERSIn a proprietorship or ownership, the claim of an owner of a
business to the assets of the business. Also called "capital".
It is the money retained in the company.
Income statement (financial statement) - ANSWERSA list of an entity's revenues,
expenses, and net income or net loss for a specific period. Also called "Statement of
earnings" or "Statement of operations".
REVENUES - EXPENSES
Statement of Owner's Equity - ANSWERSA summary of the changes in owner's equity
that have occurred during a specific period of time, such as a month or a year.
, Balance sheet - ANSWERSA list of an entity's assets, liabilities, and owner's equity
(proprietorship) or shareholders' equity (corporation) as a specific date. Also called
"Statement of financial position".
Cash flow statement - ANSWERSReports cash receipts and cash payments classified
according to the entity's major activities: operating, investing, and financing. Also called
"Statement of Cash Flows".
Business - ANSWERSOne or more individuals selling goods or services with the intent
of making a profit.
Dividends - ANSWERSdistributions of money, stock, or other property that a corporation
pays to its shareholders (stockholders).
Financing accounting - ANSWERSThe branch of accounting that provides information
to people outside the business.
Management accounting - ANSWERSThe branch of accounting that generates
information for internal decision makers of a business.
Financial statements - ANSWERSBusiness documents that report financial information
about a business entity to decision makers, such as "Income statement, Statement of
Owner's Equity, Balance sheet, and Cash flow statement".
External users (of accounting information) - ANSWERSReaders of financial information
who do not work for the business.
Example: Creditors and outside investors, government agencies and the general public.
Internal users (of accounting information) - ANSWERSReaders of financial information
who either own the business or are employed by it and who are making decisions on
behalf of the business.
Example: Company executives, department managers, and hospital administrators.
Investors - ANSWERSA person or business that provides capital (usually money) to a
business with the expectation of receiving financial gain.
Net income - ANSWERSThe difference between total revenues and total expenses
when total revenues are greater. Excess of total revenues over total expenses. Also
called "Net earnings", "Net profit", "Profit".
Revenues - Expenses
Net loss - ANSWERSThe difference between total revenues and total expenses when
total expenses are greater. Excess of total expenses over total revenues.
Accounting.
Accounting - ANSWERSThe system that measures business activities, processes that
information into reports and financial statements, and communicates the results or
findings to decision makers.
Accounting equation - ANSWERSThe most basic tool of accounting: Assets = Liabilities
+ Equity
Bookepping - ANSWERSA procedural element of accounting; the keeping of the
financial records and the recording of financial information.
Accounting <> Bookepping
Accounting = Total
Bookepping = A portion of the accounting process
Asset - ANSWERSAn economic resource that is expected to be of benefit in the future.
Examples: Cash, Accounts receivable, Note receivable, Land, Prepaid expenses,
Equipment, Furnitures, etc.
Accounts payable - ANSWERSThe oral or implied promise to pay off debts arising from
credit purchases (To buy sth "ON ACCOUNT", "ON CREDIT"). A liability that is backed
by the general reputation and credit standing of the debtor.
Accounts receivable - ANSWERSAn asset; a promise to receive cash in the future from
customers to whom the business has sold goods or services. (To sell sth "ON
ACCOUNT", "ON CREDIT").
Liability - ANSWERSAn economic obligation (a debt) payable to an individual or an
organization outside the business.
Examples: Accounts payable, Note payable, Unearned revenue.
Owner's Equity - ANSWERSIn a proprietorship or ownership, the claim of an owner of a
business to the assets of the business. Also called "capital".
It is the money retained in the company.
Income statement (financial statement) - ANSWERSA list of an entity's revenues,
expenses, and net income or net loss for a specific period. Also called "Statement of
earnings" or "Statement of operations".
REVENUES - EXPENSES
Statement of Owner's Equity - ANSWERSA summary of the changes in owner's equity
that have occurred during a specific period of time, such as a month or a year.
, Balance sheet - ANSWERSA list of an entity's assets, liabilities, and owner's equity
(proprietorship) or shareholders' equity (corporation) as a specific date. Also called
"Statement of financial position".
Cash flow statement - ANSWERSReports cash receipts and cash payments classified
according to the entity's major activities: operating, investing, and financing. Also called
"Statement of Cash Flows".
Business - ANSWERSOne or more individuals selling goods or services with the intent
of making a profit.
Dividends - ANSWERSdistributions of money, stock, or other property that a corporation
pays to its shareholders (stockholders).
Financing accounting - ANSWERSThe branch of accounting that provides information
to people outside the business.
Management accounting - ANSWERSThe branch of accounting that generates
information for internal decision makers of a business.
Financial statements - ANSWERSBusiness documents that report financial information
about a business entity to decision makers, such as "Income statement, Statement of
Owner's Equity, Balance sheet, and Cash flow statement".
External users (of accounting information) - ANSWERSReaders of financial information
who do not work for the business.
Example: Creditors and outside investors, government agencies and the general public.
Internal users (of accounting information) - ANSWERSReaders of financial information
who either own the business or are employed by it and who are making decisions on
behalf of the business.
Example: Company executives, department managers, and hospital administrators.
Investors - ANSWERSA person or business that provides capital (usually money) to a
business with the expectation of receiving financial gain.
Net income - ANSWERSThe difference between total revenues and total expenses
when total revenues are greater. Excess of total revenues over total expenses. Also
called "Net earnings", "Net profit", "Profit".
Revenues - Expenses
Net loss - ANSWERSThe difference between total revenues and total expenses when
total expenses are greater. Excess of total expenses over total revenues.
