ACCY 201 FINAL EXAM – BARTON
-exam elaborations with 100% verified answer/solutions-
Excel & Succeed
123 Q&A
Debit account
Recorded on the left side; an entry that increases asset and expense
accounts, and decreases liability, revenue, and most equity accounts
Credit
Recorded on the right side; an entry that decreases asset and expense
accounts and increases liability, revenue, and most equity accounts
Measurement principle (cost principle)
Amounts are recorded at cost and usually in amounts of money
Revenue recognition principle
Revenue is recognized when it is earned (maganizes) and must take into
account for returns, etc.
Expense recognition principle (matching principle)
Expense must be recorded when revenue is recorded
,Full disclosure principle
Company must report details in financial statements
Going-concern assumption
Assume that the business will continue operating
Monetary unit assumption
Express transactions and events in terms of money
Time period assumption
Life of a company can be divided into periods
Business entity assumption
Business is accounted for separately than from its owner
Internal users
Officers, managers, internal auditors, sales staff, budget officers, controllers
External users
Lenders, shareholders, governments, consumer groups, external auditors,
customers
Bank statement balance
-add deposits in transit
-deduct outstanding checks
-add or deduct bank errors
Book balance
-add collections made by bank
-add interest earned on checking account
-deduct nsf checks
-deduct bank service charge
-add or deduct book errors
Close revenue account
, Move to income summary account - right side
Close expense accounts
Move to income summary account - left side
Close income summary account
Move to retained earnings
Income summary account
Temporary account used only in the closing process to which balances of
revenue and expense accounts (including any gains or losses) are
transferred; its balance is transferred to the capital account (or retained
earnings for a corporation)
Merchandiser
Earns net income by buying and selling merchandise
Wholesaler
Intermediary that buys products from a seller and then sells them to retailers
Merchandise inventory
Goods available and ready to be sold -- includes cost to buy goods, ship them
to the store, and make them ready for sale
Current liabilities
Anything that must be paid within one year (accounts payable, wages
payable, warranty liabilities, etc.)
Long term
Anything that can be paid in more than a year (notes payable, lease liabilities,
bonds payable)
Calculating bond interest expense for premiums/discounts
Interest = par value x market rate x (1/2)
Sarbanes-oxley
-exam elaborations with 100% verified answer/solutions-
Excel & Succeed
123 Q&A
Debit account
Recorded on the left side; an entry that increases asset and expense
accounts, and decreases liability, revenue, and most equity accounts
Credit
Recorded on the right side; an entry that decreases asset and expense
accounts and increases liability, revenue, and most equity accounts
Measurement principle (cost principle)
Amounts are recorded at cost and usually in amounts of money
Revenue recognition principle
Revenue is recognized when it is earned (maganizes) and must take into
account for returns, etc.
Expense recognition principle (matching principle)
Expense must be recorded when revenue is recorded
,Full disclosure principle
Company must report details in financial statements
Going-concern assumption
Assume that the business will continue operating
Monetary unit assumption
Express transactions and events in terms of money
Time period assumption
Life of a company can be divided into periods
Business entity assumption
Business is accounted for separately than from its owner
Internal users
Officers, managers, internal auditors, sales staff, budget officers, controllers
External users
Lenders, shareholders, governments, consumer groups, external auditors,
customers
Bank statement balance
-add deposits in transit
-deduct outstanding checks
-add or deduct bank errors
Book balance
-add collections made by bank
-add interest earned on checking account
-deduct nsf checks
-deduct bank service charge
-add or deduct book errors
Close revenue account
, Move to income summary account - right side
Close expense accounts
Move to income summary account - left side
Close income summary account
Move to retained earnings
Income summary account
Temporary account used only in the closing process to which balances of
revenue and expense accounts (including any gains or losses) are
transferred; its balance is transferred to the capital account (or retained
earnings for a corporation)
Merchandiser
Earns net income by buying and selling merchandise
Wholesaler
Intermediary that buys products from a seller and then sells them to retailers
Merchandise inventory
Goods available and ready to be sold -- includes cost to buy goods, ship them
to the store, and make them ready for sale
Current liabilities
Anything that must be paid within one year (accounts payable, wages
payable, warranty liabilities, etc.)
Long term
Anything that can be paid in more than a year (notes payable, lease liabilities,
bonds payable)
Calculating bond interest expense for premiums/discounts
Interest = par value x market rate x (1/2)
Sarbanes-oxley
