WSU Accounting 230 Questions And Answers Graded A+ 2024.

WSU Accounting 230 Questions And Answers Graded A+ 2024. Two primary functions of financial accounting - correct answer. 1) Measure business transactions 2) Communicate those measurements to people to make decisions Three objectives of financial accounting - correct answer. 1) Measure the relevant transactions of a company 2) Communicate these business activities to outside to company 3) GAAP - correct answer. The rules of financial accounting in the US set by FASB Three types of business activites - correct answer. 1) Operating: relate to earning revenues and incurring expenses 2) Investing: generally include the purchase or disposal of productive assets and investments 3) Financing: include transactions with lenders and owners Three forms of business - correct answer. 1) Sole proprietorship: owned by single person (personally responsible and lower taxes) 2) Partnership: owned by two or more people (personally responsible and lower taxes) 3) Corporation: legally separate from its owners (limited liability/not personally responsible) Four primary financial statements - correct answer. 1) Income Statement 2) Statement of Stockholder's Equity 3) Balance Sheet 4) Statement of Cash Flows Income statement - correct answer. Revenues - Expenses = Net Income Statement of Stockholder's Equity - correct answer. Common Stock: beginning + issuances + Retained Earnings: beginning + net income - dividends = S. E. Balance Sheet - correct answer. Assets = Liabilities + Stockholders Equity Statement of Cashflow - correct answer. Operating + Investing + Financing = Total Cash Flows Time periods represent by each financial statement - correct answer. Income statement: current period Statement of S.E.: for each period Balance Sheet: particular date Statement of Cash Flows: for the period How are the financial statements connected?? - correct answer. Income statement has net income which is apart of R.E. in the statement of S.E. The S.E. is used in the balance sheet and the cash from assets in the balance sheet are the results of the statement of cash flows Main two organizations involved with standard settings - correct answer. FASB and IASB Accounting equation - correct answer. Assets = Liabilities + Stockholder's Equity The effect of transactions on the expanded accounting equation - correct answer. Revenue increases retained earnings while expenses and dividends decreases retained earnings. R.E. is a component of S.E. Six steps of analyzing transactions - correct answer. 1) Use source documents to identify accounts affected by an external transaction 2) Analyze the impact of the transaction on the accounting equation 3) Assess whether the transaction results in a debit or a credit to the account balance 4) Record the transaction in a journal 5) Post the transaction to the T-account in the general ledger 6) Prepare a trial balance Debits & Credits - correct answer. Debit accounts: Dividends, Expenses, Assets Credit accounts: liabilities, owners S.E., common stock, R.E., revenues (debit)DEA/LOR(credit) Purpose of trail balance and its role - correct answer. To assist in preparing adjusting entries. It provides a check on the equality of debits and credits. Accural accounting - correct answer. Recording revenues when we earn them and expenses in the period the benefit is received Cash-bais accounting - correct answer. Record revenues when we receive cash and expenses at the time we pay cash Matching principle - correct answer. All costs that are used to generate revenue are recorded as expenses in the period the revenue is recognized Revenue recognition principle - correct answer. Record revenue when earned Accural-bais vs. Cash-bais - correct answer. Timing Trial balance vs Adjusted trial balance - correct answer. Trial balance: list of all accounts and their balances at a particular date, showing that total debits = total credits Adjusted: list of all accounts and their balances AFTER we have updated the account balances for adjusted entries Prepaid expenses - correct answer. Paid cash for the purchase Deferred/unearned revenues - correct answer. Received cash and recorded a liability before we earned the revenue Accrued expenses - correct answer. Paid cash after we incurred the expense and recorded a liability Accrued revenues - correct answer. Received cash after we earned the revenue and recorded an asset Current Assets - correct answer. Accounts receivable, cash, inventory, supplies Long term Assets - correct answer. Property, plant, equipment, intangibles Property, plant, and equipment - correct answer. Buildings, land, land improvements, equipment, natural resources Intangibles - correct answer. Copyright, patents, trademarks, franchies, goodwill Current Liabilities - correct answer. Anything "payable" within one year Long term Liabilities - correct answer. Anything "payable" more than one year from now Stockholder's Equity - correct answer. Retained earnings, common stock, dividends How to reconcile a bank statement - correct answer. 1) Calculate the banks balance for (1) cash transactions already recorded by the company but not yet recorded by the bank and (2) bank errors.