CLEP REA Financial Accounting ~ Formulas || || || || || ||
Exam with verified detailed answers || || || ||
Basic acc equation - ✔✔Assets = liabilities + owner's equity
|| || || || || || || || ||
Business entity - ✔✔the financial statements report about a single business. Every business gets
|| || || || || || || || || || || || || ||
its own set of books. Acc. do not mix in the owners personal financial information.
|| || || || || || || || || || || || || ||
Current - ✔✔"current" liabilities are those debts that must be paid within one year or one
|| || || || || || || || || || || || || || || ||
operating cycle, whichever is longer. || || || ||
Current Ratio - ✔✔Current Assets/current liabilities = current ratio
|| || || || || || || ||
Debt Ratio - ✔✔Total liabilities/total assets = debt ratio
|| || || || || || || ||
Double Entry acc - ✔✔Recording business transactions twice: once to show where the $ came
|| || || || || || || || || || || || || || ||
from and another to show where the $ went
|| || || || || || || ||
Equity Ratio - ✔✔Total equity/assets = equity ratio
|| || || || || || ||
Book value of a long-lived asset - ✔✔Purchase price - accumulated depreciation = Book Value
|| || || || || || || || || || || || || ||
Ending Owner's Equity Formula - ✔✔Equity-begging + net income - withdrawal = equity-ending
|| || || || || || || || || || || ||
Gross Profit - ✔✔Sales - costs of goods sold = gross profit
|| || || || || || || || || || ||
Income Statement Formula - ✔✔Sales - cost of goods sold = gross profit
|| || || || || || || || || || || ||
Exam with verified detailed answers || || || ||
Basic acc equation - ✔✔Assets = liabilities + owner's equity
|| || || || || || || || ||
Business entity - ✔✔the financial statements report about a single business. Every business gets
|| || || || || || || || || || || || || ||
its own set of books. Acc. do not mix in the owners personal financial information.
|| || || || || || || || || || || || || ||
Current - ✔✔"current" liabilities are those debts that must be paid within one year or one
|| || || || || || || || || || || || || || || ||
operating cycle, whichever is longer. || || || ||
Current Ratio - ✔✔Current Assets/current liabilities = current ratio
|| || || || || || || ||
Debt Ratio - ✔✔Total liabilities/total assets = debt ratio
|| || || || || || || ||
Double Entry acc - ✔✔Recording business transactions twice: once to show where the $ came
|| || || || || || || || || || || || || || ||
from and another to show where the $ went
|| || || || || || || ||
Equity Ratio - ✔✔Total equity/assets = equity ratio
|| || || || || || ||
Book value of a long-lived asset - ✔✔Purchase price - accumulated depreciation = Book Value
|| || || || || || || || || || || || || ||
Ending Owner's Equity Formula - ✔✔Equity-begging + net income - withdrawal = equity-ending
|| || || || || || || || || || || ||
Gross Profit - ✔✔Sales - costs of goods sold = gross profit
|| || || || || || || || || || ||
Income Statement Formula - ✔✔Sales - cost of goods sold = gross profit
|| || || || || || || || || || || ||
