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What are the 3 primary financial statements?
income statement, balance sheet, statement of cash flows
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What are the 3 main sections of statement of cash flow?
operating activities, investing activities, financing activities
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GAAP states that the _________ basis of accounting is the most useful to users of financial statements.
accrual; revenues are recorded as they are earned and expenses are recorded as they are incurred.
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How do you figure out the depreciation expense?
- cost - salvage value
- useful life
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Transaction- journal- ______- trial balance- __________- adjusted trial balance- financial statements- ____________- post closing trial balance
ledger- adjusting entries- closing entries
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What accounts are closed?
Revenues, Expenses, Dividends
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What accounts are not closed?
Assets, Liabilities, Owners Equity
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The accounts that are closed are called what?
temporary or normal
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The accounts that are not closed are called what?
permanent or real
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A system of accounting for inventory in which we keep track of our inventories and cost of goods sold all throughout the year.
Perpetual
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If goods are shipped FOB destination, then who pays for the shipping charges and when does the title pass?
The seller pays for the shipping and title passes at destination.
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If goods are shipped FOB shipping point, then who pays for the shipping charges and when does the title pass?
The buyer pays for the shipping charges and the title passes to the buyer when it leaves the buyer.
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What type of account is the Allowance account?
Contra-asset
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