Accounting 110 Final Detailed Exam with Correct Answers 2025

What are the two types of accounting? 1. financial 2. managerial Financial Accounting - -external users; measures value; emphasis on past managerial accounting - -internal users; adds value; emphasis on future managerial accounting does - -what accounting type has an emphasis on future? accounting - -info system that reports on the economic activities and financial condition of a business 1. financing 2. investing 3. operating - -what are the 3 types of business activities? financing - -where can the company get money?; creditors, investors, owners investing - -what is needed to run the business?; assets operating - -how does a company make money?; revenue expenses, cost of goods sold, salaries and wage expenses, utilities expense, advertising expense - -how do companies spend money? expenses - -cost of assets consumed What are the 3 forms of business? 1. sole proprietorship 2. partnership 3. corporation sole proprietorship - - - 1 owner - easy to establish - personally liable partnership - - - 2 or more owners - partners share the risk and rewards Accounting Accounting - personally liable corperation - -- separate legal entity (stockholders not personally liable) - double taxation - continuity of existence - easy transfer of ownership-selling stock - ability to raise capital 1. assets 2. liabilities 3. equity 4. revenues 5. expenses - -what are the 5 account categories? assets - -"things of value"; "OWNED"; what makes the company money; turn into cash cash - -checking account; savings account; money market accounts receivable (AR) - -this contains the amount of money that is owed to the business by its customers cash; accounts receivable; supplies; prepaids; inventory; non current assets - -what are examples of assets? prepaids - -cost of a prepayment; prepaid insurance; prepaid rent inventory - -raw materials; work in progress; finished goods noncurrent assets - -plant; property; equipment liabilities - -debt or obligations owed by a buisness accounts payable (AP); unearned revenue; notes payable - -what are examples of liabilities? accounts payable - -business credit card; invoices owed by company unearned revenue - -services or products that the business owes its customers; downpayment true - -true or false: unearned revenue is a liability notes payable - -when company owes money to creditors through loans; only principle amount no interest equity - -what is retained/kept in the buisness Accounting Accounting private: owners equity; retained earnings; distributions - -components of private company for equity public: common stock; retained earnings; dividends - -components of public company for equity revenue-expenses=net profit(loss) - -what is the equation for net profit (or loss) assets=liabilities+equity - -what is the basic accounting equation? assets=liabilities+owners equity+revenue-expenses-distributions - -what is the explanted accounting equation? financing inflows - -financing, investing, or operating? inflow or outflow? owners equity/common stock; notes payable financing outflow - -financing, investing, or operating? inflow or outflow? distributions/dividends investing inflow - -financing, investing, or operating? inflow or outflow? sale of PPE investing outflow - -financing, investing, or operating? inflow or outflow? purchase of PPE (other assets) operating inflow - -financing, investing, or operating? inflow or outflow? revenue operating outflow - -financing, investing, or operating? inflow or outflow? expenses financing-inflow - -financing, investing, or operating? inflow or outflow? acquired cash from owners financing-inflow. - -financing, investing, or operating? inflow or outflow? borrowed cash from creditors Accounting Accounting investing-outflow - -financing, investing, or operating? inflow or outflow? paid cash to purchase land operating-inflow - -financing, investing, or operating? inflow or outflow? earned cash revenue operating-outflow - -financing, investing, or operating? inflow or outflow? paid cash for salary expenses financing-outflow - -financing, investing, or operating? inflow or outflow? paid cash dividend operating-outflow. - -financing, investing, or operating? inflow or outflow? paid cash for interest asset - -asset, liability, equity, revenue, or expense? land equity-negative - -asset, liability, equity, revenue, or expense? dividends equity - -asset, liability, equity, revenue, or expense? retained earnings revenue - -asset, liability, equity, revenue, or expense? sales revenue expense - -asset, liability, equity, revenue, or expense? advertising expense asset - -asset, liability, equity, revenue, or expense? office supplies asset - -asset, liability, equity, revenue, or expense? accounts receivable expense - -asset, liability, equity, revenue, or expense? rent expense liability - -asset, liability, equity, revenue, or expense? accounts payable Accounting Accounting expense - -asset, liability, equity, revenue, or expense? salaries expense asset - -asset, liability, equity, revenue, or expense? building asset - -asset, liability, equity, revenue, or expense? inventroy revenue - -asset, liability, equity, revenue, or expense? event revenue equity - -asset, liability, equity, revenue, or expense? common stock 1. income statement 2. retained earnings statement 3. balance sheet 4. statement of cash flow - -what are the 4 financial statements? revenue-expenses=net income(or loss) - -what equation is needed for the income statment? income statement - -this shows how successful a business performed during a period of time beginning retained earnings + net income(or net loss) - di