Moraine Valley Financial Accounting
(BUS-142-001) final study guide
Which statement is dated as a specific date? (April 30, 2001) - ANSWER-Balance sheet
(because cash is constantly changning)
Which statement shows the amount of possessions a business has and who has a
"claim" to those possessions? - ANSWER-Balance sheet
Accounting - ANSWER-A system of communicating info for better decision making
Financial Accounting - ANSWER-Provides info to EXTERNAL users
Managerial Accounting - ANSWER-Provides info to INTERNAL users
Asset - ANSWER-Something owned that has value (the resources owned by a
business)
Liability - ANSWER-Debts you owe someone (the rights of the creditors are the debts of
the business)
(Stockholder's) Equity - ANSWER-the rights of the owners (the worth of the business)
Revenue - ANSWER-A business earns money by selling goods/services to its
customers
FASB - ANSWER-Financial Accounting Standards Board - they make the rules
SEC - ANSWER-Security and Exchange Commission - enforce the rules
Expense - ANSWER-Assets used in the process of earning revenue
What is the purpose of a journal and a ledger? - ANSWER-Journal - written out version
Ledger - pages of numbers
Posting - ANSWER-Transferring from the journal to the ledger
The accounting equation (two ways) - ANSWER-1. Assets = liabilities + equity
2. Assets - liabilities = equity
Income Statement - ANSWER-Reports the revenues and expenses for a period of time
(Revenue and Expenses)
, Balance sheet - ANSWER-Reports assets, liabilities, and equity as of a specific date (A
= L+E)
Retained Earning Statement - ANSWER-The stockholder's equity created from
business operations through revenue and expense transactions (Rev - expenses -
dividends = retained earnings)
Which two statements cover a period of time? (For the month ended...) - ANSWER-
Statement of cash flows and Income statements
Which statement shows the difference between the amount of sales/services and the
cost to provide sales/services? - ANSWER-Income Statement
Cash
(C/NB/FS) - ANSWER-Asset
D+
Balance sheet
Sales
(C/NB/FS) - ANSWER-Revenue
C+
Income statement
Common Stock
(C/NB/FS) - ANSWER-Equity
C+
Balance Sheet
Accounts Payable
(C/NB/FS) - ANSWER-Liability
C+
Balance sheet
Wage Expense
(C/NB/FS) - ANSWER-Expense
D+
Income Statement
Unearned Revenue
(C/NB/FS) - ANSWER-Liability
C+
Balance Sheet
Building
(C/NB/FS) - ANSWER-Asset
(BUS-142-001) final study guide
Which statement is dated as a specific date? (April 30, 2001) - ANSWER-Balance sheet
(because cash is constantly changning)
Which statement shows the amount of possessions a business has and who has a
"claim" to those possessions? - ANSWER-Balance sheet
Accounting - ANSWER-A system of communicating info for better decision making
Financial Accounting - ANSWER-Provides info to EXTERNAL users
Managerial Accounting - ANSWER-Provides info to INTERNAL users
Asset - ANSWER-Something owned that has value (the resources owned by a
business)
Liability - ANSWER-Debts you owe someone (the rights of the creditors are the debts of
the business)
(Stockholder's) Equity - ANSWER-the rights of the owners (the worth of the business)
Revenue - ANSWER-A business earns money by selling goods/services to its
customers
FASB - ANSWER-Financial Accounting Standards Board - they make the rules
SEC - ANSWER-Security and Exchange Commission - enforce the rules
Expense - ANSWER-Assets used in the process of earning revenue
What is the purpose of a journal and a ledger? - ANSWER-Journal - written out version
Ledger - pages of numbers
Posting - ANSWER-Transferring from the journal to the ledger
The accounting equation (two ways) - ANSWER-1. Assets = liabilities + equity
2. Assets - liabilities = equity
Income Statement - ANSWER-Reports the revenues and expenses for a period of time
(Revenue and Expenses)
, Balance sheet - ANSWER-Reports assets, liabilities, and equity as of a specific date (A
= L+E)
Retained Earning Statement - ANSWER-The stockholder's equity created from
business operations through revenue and expense transactions (Rev - expenses -
dividends = retained earnings)
Which two statements cover a period of time? (For the month ended...) - ANSWER-
Statement of cash flows and Income statements
Which statement shows the difference between the amount of sales/services and the
cost to provide sales/services? - ANSWER-Income Statement
Cash
(C/NB/FS) - ANSWER-Asset
D+
Balance sheet
Sales
(C/NB/FS) - ANSWER-Revenue
C+
Income statement
Common Stock
(C/NB/FS) - ANSWER-Equity
C+
Balance Sheet
Accounts Payable
(C/NB/FS) - ANSWER-Liability
C+
Balance sheet
Wage Expense
(C/NB/FS) - ANSWER-Expense
D+
Income Statement
Unearned Revenue
(C/NB/FS) - ANSWER-Liability
C+
Balance Sheet
Building
(C/NB/FS) - ANSWER-Asset
