ECU Accounting Test 1 Study Guide | Financial Accounting Review, Key Concepts & Practice Questions

ECU Accounting Test 1 Study Guide | Financial Accounting Review, Key Concepts & Practice
Questions



Revenue - ANS ✔✔the amount of money or money substitute a business receives from the sale
of a product



Liability - ANS ✔✔an amount owed to a lender or other creditor



Stockholders Equity - ANS ✔✔money provided to the business by owner either through an
initial investment



Asset - ANS ✔✔an economic resource that a business owns and can use to operate the business



Expense - ANS ✔✔money or other value surrendered due to the sale of goods or services or the
operating of the business



Dividend - ANS ✔✔the payment of past and current profits, less losses previously retained in
the business



Revenue -------- retained earnings - ANS ✔✔Increases



Expenses ------ retained earnings - ANS ✔✔Decreases



Dividends------retained earnings - ANS ✔✔Decreases



GAAP - ANS ✔✔Generally Accepted Accounting Principle



FASB - ANS ✔✔Financial Accounting Standards Board

, Accounting Equation - ANS ✔✔Assets= Liabilities + Stockholders Equity



Financial Statement order - ANS ✔✔1. Income statement

2. Retained Earnings

3. Balance sheet



net income - ANS ✔✔Revenues-Expenses= Net income



Income statement includes----- - ANS ✔✔Umbrella:

1. Revenues

2. Expenses

3. Dividends



Balance sheet includes---- - ANS ✔✔1. assets

2. liabilities

3. stockholders equity



Asset examples - ANS ✔✔Cash

accounts receivable

notes receivable

prepaid expenses

land

building

equipment

furniture