SOLUTION MANUAL FOR FINANCIAL
ACCOUNTING 12TH EDITION REVIEW STUDY
SHEET WITH VERIFIED ANSWERS
◉ Accounting entity.
Answer: Is the organization for with financial data are to be
collected.
◉ The four basic statements:.
Answer: 1. Balance Sheet
2. Income Statement
3. Statement of Retained Earnings
4. Statement of Cash flows
◉ Balance Sheet.
Answer: Reports the amount of assets, liabilities and stockholders'
equity of an accounting entry at a point in time.
◉ Income Statement.
Answer: Reports the revenues less the expenses of the accounting
period.
,◉ Statement of Retained Earnings.
Answer: Reports the way that net income and the distribution of
dividends affected the financial position of the company during the
accounting period.
◉ Statement of Cash Flows.
Answer: Reports inflows and outflows of cash during the accounting
period in the categories of operating, investing, and financing.
◉ Basic Accounting Equation.
Answer: Assets = Liabilities + Stockholders' Equity
◉ Assets.
Answer: Are the economic resources owned by the company. Each of
these economic resources is expected to provide future benefits to
the firm.
◉ Liabilities.
Answer: Are the company's debts or obligations. Which will be paid
with assets or services.
◉ Stockholders' Equity (Owners' Equity).
,Answer: Indicates the amount of financing provided by owners of
the business and earnings. Is the sum of the contribute capital + the
retained earnings.
◉ Accounting Period.
Answer: Is the time period cover by the financial statements.
◉ Elements of the Income Statement.
Answer: Revenues, Expenses and Net Income.
◉ Revenues.
Answer: Earnings from the sale of goods or services to costumers.
Revenues are reported whether or not have yet been paid for.
◉ Expenses.
Answer: Represent the dollar amount of resources the entity used to
earn revenue during the period.
◉ Net Income ("the bottom line").
Answer: Is the excess of total revenues over total expenses.
◉ Net Loss.
Answer: If total expenses exceed total revenues.
, ◉ Retained Earning Equation.
Answer: Ending Retained Earnings = (Beginning of Retained
Earnings + Net Income) - Dividends
◉ The Cash Flow Statement Equation.
Answer: +/- Cash flow from Operating Activities (CFO)
+/- Cash flow from Investing Activities (CFI)
+/- Cash flow from Financing Activities (CFF)
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Change in Cash
◉ Cash Flow from Operating Activities, and examples.
Answer: CFO- Are cash flow that are directly related to earning
income. Example, collecting cash from costumers, pay salaries, pay
bills, pay to suppliers.
◉ Cash Flow from Investing Activities, and examples.
Answer: CFI- Are cash flow related to the acquisition or sale of the
company's productive assets. Example, the purchase of additional
equipment.
◉ Cash Flow from Financing Activities, and examples.
ACCOUNTING 12TH EDITION REVIEW STUDY
SHEET WITH VERIFIED ANSWERS
◉ Accounting entity.
Answer: Is the organization for with financial data are to be
collected.
◉ The four basic statements:.
Answer: 1. Balance Sheet
2. Income Statement
3. Statement of Retained Earnings
4. Statement of Cash flows
◉ Balance Sheet.
Answer: Reports the amount of assets, liabilities and stockholders'
equity of an accounting entry at a point in time.
◉ Income Statement.
Answer: Reports the revenues less the expenses of the accounting
period.
,◉ Statement of Retained Earnings.
Answer: Reports the way that net income and the distribution of
dividends affected the financial position of the company during the
accounting period.
◉ Statement of Cash Flows.
Answer: Reports inflows and outflows of cash during the accounting
period in the categories of operating, investing, and financing.
◉ Basic Accounting Equation.
Answer: Assets = Liabilities + Stockholders' Equity
◉ Assets.
Answer: Are the economic resources owned by the company. Each of
these economic resources is expected to provide future benefits to
the firm.
◉ Liabilities.
Answer: Are the company's debts or obligations. Which will be paid
with assets or services.
◉ Stockholders' Equity (Owners' Equity).
,Answer: Indicates the amount of financing provided by owners of
the business and earnings. Is the sum of the contribute capital + the
retained earnings.
◉ Accounting Period.
Answer: Is the time period cover by the financial statements.
◉ Elements of the Income Statement.
Answer: Revenues, Expenses and Net Income.
◉ Revenues.
Answer: Earnings from the sale of goods or services to costumers.
Revenues are reported whether or not have yet been paid for.
◉ Expenses.
Answer: Represent the dollar amount of resources the entity used to
earn revenue during the period.
◉ Net Income ("the bottom line").
Answer: Is the excess of total revenues over total expenses.
◉ Net Loss.
Answer: If total expenses exceed total revenues.
, ◉ Retained Earning Equation.
Answer: Ending Retained Earnings = (Beginning of Retained
Earnings + Net Income) - Dividends
◉ The Cash Flow Statement Equation.
Answer: +/- Cash flow from Operating Activities (CFO)
+/- Cash flow from Investing Activities (CFI)
+/- Cash flow from Financing Activities (CFF)
----------------------------------------
Change in Cash
◉ Cash Flow from Operating Activities, and examples.
Answer: CFO- Are cash flow that are directly related to earning
income. Example, collecting cash from costumers, pay salaries, pay
bills, pay to suppliers.
◉ Cash Flow from Investing Activities, and examples.
Answer: CFI- Are cash flow related to the acquisition or sale of the
company's productive assets. Example, the purchase of additional
equipment.
◉ Cash Flow from Financing Activities, and examples.
