ACCT Exam 1 Questions & Answers 2023/2024

ACCT Exam 1 Questions & Answers 2023/2024 Internal users - ANSWER-Someone who works inside the bussiness. Finance, management, marketing, Human Resources External users - ANSWER-Banks, shareholders, investors, IRS, Community members (sometimes internal) Forms of ownership - ANSWER-sole proprietorship ( simple to establish, owner controlled, tax advantages), partnerships(simple to establish, shared control, broader skills and resources, tax advantages), corporation(easier to transfer ownership, easier to raise funds, no personal liability) Accounting Equation - ANSWER-Assets=liability+shareholder equity(CS+Retained earnings(rev.-exp.-divid.)) Assets - ANSWER-Values owned and used by business to earn revenue: cash, accounts receivable building, land, notes receivable, prepaid, equipment Liability - ANSWER-Amount the company owes to creditor(bank, person, company) accounts payable, notes payable Components of shareholder equity - ANSWER-Common stock (equity paid by owners) and retained earnings (profits earned by company) retained earnings - ANSWER-Revenue (sales of goods or services to customers) and expenses (cost of doing business necessary to earn revenue) Financial statement order - ANSWER-income statement, statement of retained earnings, balance sheet, statement of cash flows