Intuit Academy Bookkeeping Certification Study Paper With Accurate Questions And Expertverified Answers Graded A+

◍ Cash Flow Statement - Reports the sources and uses of cash by a business ◍ Undeposited Funds - a temporary account that holds payments you plan to deposit later ◍ Credit Memo - Payment for a cancelled service gets applied to the clients next job ◍ Gross Profit - Revenue - cost of goods sold ◍ Operating Profit - Gross Profit - Expenses ◍ Net Income - Operating Profit + Other income - taxes - other expenses ◍ Economic Entity Assumption - Business and owner are separate entities. Business and personal finance must be separate. ◍ Reliability Assumption - You can only record accounting transactions that can be verified by a source document (I.E invoices, bill statements, receipts, and bank statements) ◍ Full Disclosure Assumption - All information that is relative to the business and is important to a lender or investor has to be disclosed in a financial statement or statement notes ◍ Conservatism Assumption - When bookkeepers or accountants are uncertain and need to determine how to report an item, they should choose the option that shows less income or asset benefit (Potential losses can be recorded but potential gains can not) ◍ Materiality Principle - An accounting standard can be ignored if the impact on financial statements is small and not misleading ◍ Consistency Principle - A business will adopt an accounting method and use the same method for similar items in the future. Methods are only changed if it improves reporting. ◍ Monetary Unit Assumption - One currency is used throughout all accounting activities. Inflation is not accounted for. ◍ Going Concern Assumption - When a company is no longer a going concern it must report the issues it's having including ongoing losses, credit denial and lawsuits. ◍ Going Concern - A company is stable and can meet it's obligations for the foreseeable future. ◍ Periodicity Assumption - You can report a companies financials in smaller chunks of time ◍ Revenue Recognition Principle - Revenue is earned when a service is performed even if cash is not yet received. Revenue must be recognized in the period when realized and earned, not necessarily when payment is received. ◍ Matching Principle - revenue earned should be matched with the expenses incurred in earning that revenue and in the same period ◍ Cash Basis Accounting - Revenue is recognized when revenue is received and expenses are recognized when payed out ◍ Accrual Basis Accounting - revenue is reported when earned and expenses are reported when incurred. ◍ Hybrid Accounting Method - A combination of cash basis and accrual basis accounting. ◍ The Accounting Principle - You can't mix business and personal assets or expenses.