Financial Accounting Exam 1 - Chapter 1 & 2 Questions And Answers

Financial Accounting Exam 1 - Chapter 1 &
2 Questions And Answers

Cash Flow- Operating Involves transactions that relate to the primary operations of the

company; providing products and services to customers

ex: rent, salaries, utilities, taxes, advertising




Cash Flow- Financing Includes transactions the company has with investors and creditors


ex: issuing stock, borrowing money from bank (notes payable)




Cash Flow- Investing Cash transactions for the purchase of long-term assets and

investments; assets that provide benefits for longer than 1 year

ex: equipment, land, plant assets




Generally Accepted Accounting Principles (GAAP) common set of accounting principles,

standards and procedures that companies must follow when they compile their financial

statements

- Issued by FASB

, Financial Accounting Exam 1 - Chapter 1 &
2 Questions And Answers
Financial Accounting Standards Board (FASB) private, non-profit organization market

regulator whose primary purpose is to establish and improve generally accepted accounting

principles (GAAP) within the United States




Name the Financial Statement and Normal Balance of the following

1. Depreciation Expense

2. Expenses

3. Revenue

4. Liability


5. Dividends 1. Income statement, Debit


2. Income statement, Debit

3. Income Statement, Credit

4. Balance Sheet, Credit

5. Stockholder's Equity, Debit




Name the Financial Statement, Normal Balance, and Category of the following

1. Common Stock

2. Prepaid Expenses