Burney ACCY 201 FINAL (Ole Miss)
Questions Fully Solved.
Accounting Definition - Answer An information and measurement system that identifies,
records, and communicates relevant, reliable, and comparable information.
Types of Users of accounting info. - Answer External and Internal Users
External Users - Answer NOT directly involved in running the organization
> Includes; shareholders, lenders, directors, customers, suppliers, regulators, lawyers, brokers,
and the press
Internal Users - Answer ARE directly involved in managing and operating an organization
> Includes; CEOs, CFOs, CAEs, Treasurer, ETC.
GAAP - Answer Generally Accepted Accounting Principles
> Aims to make information relevant, reliable, and comparable
> Concepts that govern accounting
Full Disclosure Principle - Answer A company must report details behind financial statements
that would impact users' decisions
Expense Recognition Principle - Answer A company must record the expenses it incurred to
generate the revenue reported
Revenue Recognition Principle - Answer Provides guidance on when a company must
recognize revenue
Sole Proprietorship - Answer A business owned by one person
Partnership - Answer Two owners
Business Entity Applies
Corporation - Answer Business is a separate legal entity
Accounting Equation - Answer Assets= Liability + Equity
, Increases Equity - Answer Revenues and Owners Investments (c/s)
Decreases Equity - Answer Dividends and Expenses
Income Statement - Answer revenues - expenses = net income
Statement of Retained Earnings - Answer beginning retained earnings + net income -
dividends = ending retained earnings
Balance Sheet - Answer Types and amounts of assets, liabilities, and equity at a period in
time
Assets - Answer Something you own.
> Cash, A/R, N/R, Prepaid Accounts, Supplies Accounts, Equipment, Building, and Land Accounts
Liabilities - Answer Something you owe.
> A/P, N/P, Unearned Revenue, and Accrued Liabilities
Equity - Answer =C/S - Dividends + Revenues - Expenses
Revenue Accounts - Answer Increase Equity
> Sales, Commissions Earned, Professional Fees Earned, Rent Revenue, and Interest Revenue
Expense Accounts - Answer Decrease Equity
> Ad., Store Supplies, Office salaries, office supplies, rent, utilities, and insurance.
Debits - Answer On the left
> Assets, Dividends, and Expenses
Credits - Answer On the right
> Liabilities, Common Stock, and Revenue
Journal Entry - Answer Shows debits and credits for each transaction
Questions Fully Solved.
Accounting Definition - Answer An information and measurement system that identifies,
records, and communicates relevant, reliable, and comparable information.
Types of Users of accounting info. - Answer External and Internal Users
External Users - Answer NOT directly involved in running the organization
> Includes; shareholders, lenders, directors, customers, suppliers, regulators, lawyers, brokers,
and the press
Internal Users - Answer ARE directly involved in managing and operating an organization
> Includes; CEOs, CFOs, CAEs, Treasurer, ETC.
GAAP - Answer Generally Accepted Accounting Principles
> Aims to make information relevant, reliable, and comparable
> Concepts that govern accounting
Full Disclosure Principle - Answer A company must report details behind financial statements
that would impact users' decisions
Expense Recognition Principle - Answer A company must record the expenses it incurred to
generate the revenue reported
Revenue Recognition Principle - Answer Provides guidance on when a company must
recognize revenue
Sole Proprietorship - Answer A business owned by one person
Partnership - Answer Two owners
Business Entity Applies
Corporation - Answer Business is a separate legal entity
Accounting Equation - Answer Assets= Liability + Equity
, Increases Equity - Answer Revenues and Owners Investments (c/s)
Decreases Equity - Answer Dividends and Expenses
Income Statement - Answer revenues - expenses = net income
Statement of Retained Earnings - Answer beginning retained earnings + net income -
dividends = ending retained earnings
Balance Sheet - Answer Types and amounts of assets, liabilities, and equity at a period in
time
Assets - Answer Something you own.
> Cash, A/R, N/R, Prepaid Accounts, Supplies Accounts, Equipment, Building, and Land Accounts
Liabilities - Answer Something you owe.
> A/P, N/P, Unearned Revenue, and Accrued Liabilities
Equity - Answer =C/S - Dividends + Revenues - Expenses
Revenue Accounts - Answer Increase Equity
> Sales, Commissions Earned, Professional Fees Earned, Rent Revenue, and Interest Revenue
Expense Accounts - Answer Decrease Equity
> Ad., Store Supplies, Office salaries, office supplies, rent, utilities, and insurance.
Debits - Answer On the left
> Assets, Dividends, and Expenses
Credits - Answer On the right
> Liabilities, Common Stock, and Revenue
Journal Entry - Answer Shows debits and credits for each transaction
