EXAM
FINANCIAL
ACCOUNTING
(FINAL EDITION)
2024
Allowance Method - CORRECT ANSWER-Bases bad debt expenses on an estimate of
uncollectible accounts.
Bad Debt Expense - CORRECT ANSWER-Is the expense associated with estimated
uncollectible account receivable.
Bad debt expense xxx
Allowance for doubtful accounts xxx
Allowance for Doubtful Accounts - CORRECT ANSWER-Is a contra-asset account
containing the estimated uncollectible account receivable.
,Writing Off Uncollectible Accounts - CORRECT ANSWER-Writing off of an individual
bad debt is recorded through a journal entry.
Allowance for doubtful accounts xxx
Accounts Receivables xxx
Percentage of Credit Sales Method - CORRECT ANSWER-Bases bad debt expenses
on the historical percentage of credit sales that result in bad debts.
Aging of Accounts Receivable Method - CORRECT ANSWER-Estimates uncollectible
accounts based on the age of each account receivable.
financing provided by owners of the business and earnings. Is the sum of the contribute
capital + the retained earnings.
Accounting Period - CORRECT ANSWER-Is the time period cover by the financial
statements.
Elements of the Income Statement - CORRECT ANSWER-Revenues, Expenses and
Net Income.
Revenues - CORRECT ANSWER-Earnings from the sale of goods or services to
costumers. Revenues are reported whether or not have yet been paid for.
Expenses - CORRECT ANSWER-Represent the dollar amount of resources the entity
used to earn revenue during the period.
Net Income ("the bottom line") - CORRECT ANSWER-Is the excess of total revenues
over total expenses.
Accounting - CORRECT ANSWER-System that collects and processes (analyzes,
measures, and records) financial information about an organization and reports that
information to decision makers.
Accounting entity - CORRECT ANSWER-Is the organization for with financial data are
to be collected.
The four basic statements: - CORRECT ANSWER-1. Balance Sheet
2. Income Statement
3. Statement of Retained Earnings
4. Statement of Cash flows
Balance Sheet - CORRECT ANSWER-Reports the amount of assets, liabilities and
stockholders' equity of an accounting entry at a point in time.
Income Statement - CORRECT ANSWER-Reports the revenues less the expenses of
the accounting period.
, Statement of Retained Earnings - CORRECT ANSWER-Reports the way that net
income and the distribution of dividends affected the financial position of the company
during the accounting period.
Statement of Cash Flows - CORRECT ANSWER-Reports inflows and outflows of cash
during the accounting period in the categories of operating, investing, and financing.
Basic Accounting Equation - CORRECT ANSWER-Assets = Liabilities + Stockholders'
Equity
Assets - CORRECT ANSWER-Are the economic resources owned by the company.
Each of these economic resources is expected to provide future benefits to the firm.
Liabilities - CORRECT ANSWER-Are the company's debts or obligations. Which will be
paid with assets or services.
Stockholders' Equity (Owners' Equity) - CORRECT ANSWER-Indicates the amount of
Net Loss - CORRECT ANSWER-If total expenses exceed total revenues.
Retained Earning Equation - CORRECT ANSWER-Ending Retained Earnings =
(Beginning of Retained Earnings + Net Income) - Dividends
The Cash Flow Statement Equation - CORRECT ANSWER-+/- Cash flow from
Operating Activities (CFO)
+/- Cash flow from Investing Activities (CFI)
+/- Cash flow from Financing Activities (CFF)
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Change in Cash
Cash Flow from Operating Activities, and examples - CORRECT ANSWER-CFO- Are
cash flow that are directly related to earning income. Example, collecting cash from
costumers, pay salaries, pay bills, pay to suppliers.
Cash Flow from Investing Activities, and examples - CORRECT ANSWER-CFI- Are
cash flow related to the acquisition or sale of the company's productive assets.
Example, the purchase of additional equipment.
Cash Flow from Financing Activities, and examples - CORRECT ANSWER-CFF- Are
cash flow directly related to the financing of the enterprise itself. Example, the payment
of money to investors and creditors.
Notes - CORRECT ANSWER-"Footnotes" provide supplemental information about the
financial condition of a company.
FINANCIAL
ACCOUNTING
(FINAL EDITION)
2024
Allowance Method - CORRECT ANSWER-Bases bad debt expenses on an estimate of
uncollectible accounts.
Bad Debt Expense - CORRECT ANSWER-Is the expense associated with estimated
uncollectible account receivable.
Bad debt expense xxx
Allowance for doubtful accounts xxx
Allowance for Doubtful Accounts - CORRECT ANSWER-Is a contra-asset account
containing the estimated uncollectible account receivable.
,Writing Off Uncollectible Accounts - CORRECT ANSWER-Writing off of an individual
bad debt is recorded through a journal entry.
Allowance for doubtful accounts xxx
Accounts Receivables xxx
Percentage of Credit Sales Method - CORRECT ANSWER-Bases bad debt expenses
on the historical percentage of credit sales that result in bad debts.
Aging of Accounts Receivable Method - CORRECT ANSWER-Estimates uncollectible
accounts based on the age of each account receivable.
financing provided by owners of the business and earnings. Is the sum of the contribute
capital + the retained earnings.
Accounting Period - CORRECT ANSWER-Is the time period cover by the financial
statements.
Elements of the Income Statement - CORRECT ANSWER-Revenues, Expenses and
Net Income.
Revenues - CORRECT ANSWER-Earnings from the sale of goods or services to
costumers. Revenues are reported whether or not have yet been paid for.
Expenses - CORRECT ANSWER-Represent the dollar amount of resources the entity
used to earn revenue during the period.
Net Income ("the bottom line") - CORRECT ANSWER-Is the excess of total revenues
over total expenses.
Accounting - CORRECT ANSWER-System that collects and processes (analyzes,
measures, and records) financial information about an organization and reports that
information to decision makers.
Accounting entity - CORRECT ANSWER-Is the organization for with financial data are
to be collected.
The four basic statements: - CORRECT ANSWER-1. Balance Sheet
2. Income Statement
3. Statement of Retained Earnings
4. Statement of Cash flows
Balance Sheet - CORRECT ANSWER-Reports the amount of assets, liabilities and
stockholders' equity of an accounting entry at a point in time.
Income Statement - CORRECT ANSWER-Reports the revenues less the expenses of
the accounting period.
, Statement of Retained Earnings - CORRECT ANSWER-Reports the way that net
income and the distribution of dividends affected the financial position of the company
during the accounting period.
Statement of Cash Flows - CORRECT ANSWER-Reports inflows and outflows of cash
during the accounting period in the categories of operating, investing, and financing.
Basic Accounting Equation - CORRECT ANSWER-Assets = Liabilities + Stockholders'
Equity
Assets - CORRECT ANSWER-Are the economic resources owned by the company.
Each of these economic resources is expected to provide future benefits to the firm.
Liabilities - CORRECT ANSWER-Are the company's debts or obligations. Which will be
paid with assets or services.
Stockholders' Equity (Owners' Equity) - CORRECT ANSWER-Indicates the amount of
Net Loss - CORRECT ANSWER-If total expenses exceed total revenues.
Retained Earning Equation - CORRECT ANSWER-Ending Retained Earnings =
(Beginning of Retained Earnings + Net Income) - Dividends
The Cash Flow Statement Equation - CORRECT ANSWER-+/- Cash flow from
Operating Activities (CFO)
+/- Cash flow from Investing Activities (CFI)
+/- Cash flow from Financing Activities (CFF)
----------------------------------------
Change in Cash
Cash Flow from Operating Activities, and examples - CORRECT ANSWER-CFO- Are
cash flow that are directly related to earning income. Example, collecting cash from
costumers, pay salaries, pay bills, pay to suppliers.
Cash Flow from Investing Activities, and examples - CORRECT ANSWER-CFI- Are
cash flow related to the acquisition or sale of the company's productive assets.
Example, the purchase of additional equipment.
Cash Flow from Financing Activities, and examples - CORRECT ANSWER-CFF- Are
cash flow directly related to the financing of the enterprise itself. Example, the payment
of money to investors and creditors.
Notes - CORRECT ANSWER-"Footnotes" provide supplemental information about the
financial condition of a company.
