Accounting Exam 1 (McGraw Hill Chapters 1-5) with perfect answers 2024

Accounting Definition correct answersAccounting is a system that collects and processes (analyzes, measures, and records) financial information about an organization and reports that information to decision makers. Financial accounting involves preparation of the four basic financial statements and related disclosures for external decision makers Accounting Equity correct answersAn obligation to provide economic resources which are specific to the entity and can be measured Accounting Period correct answersA period of time covered by an accounting report month, quarter, year Balance Sheet correct answersReports financial position at point in time Assets, Liabilities, Stockholder's equity Basic Accounting Equation correct answersAssets = Liabilities + Stockholders' Equity GAAP correct answersGenerally Accepted Accounting Principles.:The standards and rules that accountants follow while recording and reporting financial activities. Income Statement correct answersThe purpose of the income statement is to present information about the revenues, expenses, and the net income of the entity for a specified period of time Statement of cash flows correct answersThe purpose of the statement of cash flows is to present information about the flow of cash into the entity (sources), the flow of cash out of the entity (uses), and the net increase or decrease in cash during the period Statement of Stockholder's Equity correct answersThe statement of stockholders' equity reports the changes in each of the company's stockholders' equity accounts during the accounting period including issue and repurchase of stock and the way that net income and distribution of dividends affected the retained earnings of the company during that period Account correct answersA record that summarizes all the transactions pertaining to a single item in the accounting equation Common Stock correct answersTerm used to describe the total amount paid in by stockholders for the shares they purchase.