Accounting 203 - Exam 1 - Ch. 1-4 Study Set
With Complete Solutions
Basic Accounting Equation - ANSWER Assets = Liabilities + Equity
Financial Statements - ANSWER Accounting reports that summarize the financial results of
business and financing activities.
1. Income Statement
2. Statement of Retained Earnings
3. Balance Sheet
4. Statement of Cash Flow
Unearned Revenue - ANSWER A LIABILITY representing a company's obligation to provide
goods or services to customers in the future.
Income Statement - ANSWER Reports the amount of revenues minus the expenses for a
period of time.
Revenue - Expenses = Net Income (Loss)
Accounting - ANSWER A system of analyzing, recording and summarizing the results of a
business's activities and then reporting the results to decision makers.
Accounts - ANSWER Accumulate and report the effects of each different business activity.
, EX: Service Revenue, Supplies Expense, Wages Expense, Rent Expense, Utilities Expense, etc.
Balance Sheet - ANSWER Reports the amount of assets, liabilities, and equity of a business at
a point in time. "As of ...".
Assets = Liabilities + Equity
Assets - ANSWER What you own;
Economic resource presently controlled by the company
EX: Cash, Supplies, Accounts Receivable, Equipment
- ACCOUNT Receivables
Ends with a DEBIT balance
Liabilities - ANSWER What you owe; measurable amounts that the company owes to creditors
- ACCOUNT Payables
Ends with a CREDIT balance
Equity - ANSWER Represents the owners' claims on the business.
Equity = Contributed Capital + Retained Earnings
With Complete Solutions
Basic Accounting Equation - ANSWER Assets = Liabilities + Equity
Financial Statements - ANSWER Accounting reports that summarize the financial results of
business and financing activities.
1. Income Statement
2. Statement of Retained Earnings
3. Balance Sheet
4. Statement of Cash Flow
Unearned Revenue - ANSWER A LIABILITY representing a company's obligation to provide
goods or services to customers in the future.
Income Statement - ANSWER Reports the amount of revenues minus the expenses for a
period of time.
Revenue - Expenses = Net Income (Loss)
Accounting - ANSWER A system of analyzing, recording and summarizing the results of a
business's activities and then reporting the results to decision makers.
Accounts - ANSWER Accumulate and report the effects of each different business activity.
, EX: Service Revenue, Supplies Expense, Wages Expense, Rent Expense, Utilities Expense, etc.
Balance Sheet - ANSWER Reports the amount of assets, liabilities, and equity of a business at
a point in time. "As of ...".
Assets = Liabilities + Equity
Assets - ANSWER What you own;
Economic resource presently controlled by the company
EX: Cash, Supplies, Accounts Receivable, Equipment
- ACCOUNT Receivables
Ends with a DEBIT balance
Liabilities - ANSWER What you owe; measurable amounts that the company owes to creditors
- ACCOUNT Payables
Ends with a CREDIT balance
Equity - ANSWER Represents the owners' claims on the business.
Equity = Contributed Capital + Retained Earnings
