Accoutning Test 1

• 1) identification
• 2) recording
• 3) communicating

assets should be recorded at cost

• 1) monetary unit assumotion
• 2) economic entity assumption

include in the accounting records inly transaction data that can be expressed in money terms

the activities of the entity be kept separate and distinct from the activities of its owner and all other economic entities

buisness owened by one person small amount of money to start owner recieves and profits suffers any losses and is personally liable for all debts of the business

• 1) preoprietorships
• 2) partnership
• 3) corporation

revenues exceed expenses

increase assets and incres oe

decreses assets and decreases liabilities

presents revenues and expenses and resulting net income or net loss for a specific period of time

summaries the changes in oe for a specific period of time

reports the assets, liabilities, and oe at a specific date

summaries information about the cash inflow and outflows for a specific period of time

• 1) auditing
• 2) taxation
• 3) management consulting

company selects the events relevant to its business

keeping a systematic chronological dairy of events measured in dollars and cents

accounting reports

• 1) recognize an ethical situation and ethical issues involved
• 2) identify and analzye the principle elements in the situation
• 3) Identify the alternatives and weigh the impact of each alternative on various stakeholders

true

balance sheet

certified public account examines company financial statements and provides an opinion as to how accurately the financial statement presents the company's results and financial position

tax advice and planning preparing tax returns and representing clients before governmental agencies

installing basic accounting software or highly complex systems providing support for major marketing project

• cost accounting
• budgeting
• accounting information system design and support
• tax planning and preparation

finding the cost of producing speciic products

uses accounting auditing and investigative skills to conduct invetigatations into theft and fraud

recording

Financial Accoutning Standard Board

Economic Entity Assumption

assets

income statement

both the balance sheet and the oe statement

• 1) public
• 2) governemental
• 3) private

revenue-expenses

a record of increases and decreases in a specific asst liability or oe item

increase assts and the decrease liabilities

credit

• 1) assets
• 2) oe
• 3) expenses

a=l+oc-od+rev-exp

• 1) analyze each transaction for its effects on the account
• 2) enter the transaction information in a journal
• 3) transfer the journal information to the appropriate accounts in the ledge-Post

• 1) discloses in one place the complete efffects of a transaction
• 2) it provides a chronlogical record of transactions
• 3) helps prevents of locate errors because the debit and credit amounts for each entry can be easily compared

a debit to supplies and a credit to accounts payable

assets, liabilities, oc, od, rev, exp

a collection of the entire group of account maintained by a company

transfer journal entries to ledger accounts

is a list of accounts with their balance at a given time

false

chronologically

increase in the liability

debit

debit

credit

credit

debit

debit

credit

jornalizing

trail balance

trail balance and financial statement

• 1) list the account titles and their balances in the appropriate debit or crdeit column
• 2) total the debit and credit columns
• 3) prove the equality of the two columns

prove that the debits equal the credit after posting

liabilty