ECU Accounting 2401 Final Exam Review | ACCT 2401 Study Guide, Key Concepts & Practice
Questions
Assets - ANS ✔✔resources a company owns or controls
- expected to yield future benefits
- include cash, supplies, equipment, land, and accounts receivable
Liabilities - ANS ✔✔creditor's claims on assets
- obligations to provide assets, products, or services to others
- include wages payable to workers, accounts payable to suppliers, notes (loans) payable to
banks, and taxes payable
Equity - ANS ✔✔owner's claim on assets
- also called net assets or residual equity
= (assets - liabilities)
Accounting Equation - ANS ✔✔- assets = (liabilities + equity)
- assets = (liabilities + contributed capital + retained earnings)
- assets = ( liabilities + common stock - dividends + revenues - expenses)
Income Statement - ANS ✔✔describes a company's revenues and expenses and computes net
income or loss over a period of time
- net income = (revenues - expenses)
Statement of Retained Earnings - ANS ✔✔explains changes in retained earnings from net
income (or loss) and any dividends over a period of time
- ending retained earnings = (beginning retained earnings + net income - dividends)
, Balance Sheet - ANS ✔✔describes a company's financial position (types and amounts of assets,
liabilities, and equity) at a point in time
- assets = (liabilities + equity)
Debit - ANS ✔✔the left side of an account
- increase for assets, owner withdrawals, and expenses
- decrease for liabilities, owner capital, and revenue
Credit - ANS ✔✔the right side of an account
- increase for liabilities, owner capital, and revenue
- decrease for assets, owner withdrawals, and expenses
Receivables - ANS ✔✔an asset that promises a future inflow of resources
Payables - ANS ✔✔a liability that promises a future outflow of resources
Common Stock - ANS ✔✔reflects inflows of cash and other net assets from stockholders in
exchange for stock
Dividends - ANS ✔✔outflows of cash and other assets to stockholders that reduce equity
Revenues - ANS ✔✔increase equity (via net income) from sales of products and services to
customers
- include sales of products, consulting services provided, facilities rented to others, and
commissions from services
Questions
Assets - ANS ✔✔resources a company owns or controls
- expected to yield future benefits
- include cash, supplies, equipment, land, and accounts receivable
Liabilities - ANS ✔✔creditor's claims on assets
- obligations to provide assets, products, or services to others
- include wages payable to workers, accounts payable to suppliers, notes (loans) payable to
banks, and taxes payable
Equity - ANS ✔✔owner's claim on assets
- also called net assets or residual equity
= (assets - liabilities)
Accounting Equation - ANS ✔✔- assets = (liabilities + equity)
- assets = (liabilities + contributed capital + retained earnings)
- assets = ( liabilities + common stock - dividends + revenues - expenses)
Income Statement - ANS ✔✔describes a company's revenues and expenses and computes net
income or loss over a period of time
- net income = (revenues - expenses)
Statement of Retained Earnings - ANS ✔✔explains changes in retained earnings from net
income (or loss) and any dividends over a period of time
- ending retained earnings = (beginning retained earnings + net income - dividends)
, Balance Sheet - ANS ✔✔describes a company's financial position (types and amounts of assets,
liabilities, and equity) at a point in time
- assets = (liabilities + equity)
Debit - ANS ✔✔the left side of an account
- increase for assets, owner withdrawals, and expenses
- decrease for liabilities, owner capital, and revenue
Credit - ANS ✔✔the right side of an account
- increase for liabilities, owner capital, and revenue
- decrease for assets, owner withdrawals, and expenses
Receivables - ANS ✔✔an asset that promises a future inflow of resources
Payables - ANS ✔✔a liability that promises a future outflow of resources
Common Stock - ANS ✔✔reflects inflows of cash and other net assets from stockholders in
exchange for stock
Dividends - ANS ✔✔outflows of cash and other assets to stockholders that reduce equity
Revenues - ANS ✔✔increase equity (via net income) from sales of products and services to
customers
- include sales of products, consulting services provided, facilities rented to others, and
commissions from services
