AAMI ACCOUNTING 1 UPDATED SET QUESTIONS
AND ANSWERS SURE A+
✔✔Accounting Period - ✔✔formal financial statements are prepared at the end of each.
✔✔Fiscal Year - ✔✔any accounting period of twelve consecutive months.
✔✔3 - ✔✔how many formal financial statements are there?
✔✔Income Statement/Profit and Loss - ✔✔this formal financial statement contains all
information relating to revenue and expenses for the fiscal period.
✔✔Income Statement - ✔✔first we list the total revenue (which is a credit)
second we itemize the total of each expense
third we take the sum of all the expenses and put that figure under the revenue amount
in the credit column and subtract
the result of this is Net Income
✔✔Statement of Owners Equity - ✔✔this statement reflects any changes made or
changes which occured to the Owners Equity during the fiscal period that the statement
is being prepared for.
✔✔Statement of Owners Equity - ✔✔first we enter the balance of the Capital Account
second we add any additional investments made during the fiscal period that the
statement is being prepared for -this gives us the total investment
next we take the Net Income from the Income Statement which gets entered on the
debit side
then you subtract any withdrawals made
the difference is entered onto the credit side and is the Net Increase in Owners Equity.
this amount is added to the total investment and the result is the Capital Balance
AND ANSWERS SURE A+
✔✔Accounting Period - ✔✔formal financial statements are prepared at the end of each.
✔✔Fiscal Year - ✔✔any accounting period of twelve consecutive months.
✔✔3 - ✔✔how many formal financial statements are there?
✔✔Income Statement/Profit and Loss - ✔✔this formal financial statement contains all
information relating to revenue and expenses for the fiscal period.
✔✔Income Statement - ✔✔first we list the total revenue (which is a credit)
second we itemize the total of each expense
third we take the sum of all the expenses and put that figure under the revenue amount
in the credit column and subtract
the result of this is Net Income
✔✔Statement of Owners Equity - ✔✔this statement reflects any changes made or
changes which occured to the Owners Equity during the fiscal period that the statement
is being prepared for.
✔✔Statement of Owners Equity - ✔✔first we enter the balance of the Capital Account
second we add any additional investments made during the fiscal period that the
statement is being prepared for -this gives us the total investment
next we take the Net Income from the Income Statement which gets entered on the
debit side
then you subtract any withdrawals made
the difference is entered onto the credit side and is the Net Increase in Owners Equity.
this amount is added to the total investment and the result is the Capital Balance
