CBAD Exam 1 – Questions With Objective Solutions
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Terms in this set (26)
Definition of Accounting:::An processes data into financial statements, and communicates
information system that results to decision makers. Also called the "language of
measures business activities business."
Accounting Equation: :Assets = Liabilities + Equity
4 Basic Financial Liabilities, Equity; Statement of Cash Flows → Cash in/out by
Statements:::Income Statement operating, investing, financing
→ Revenues & Expenses;
Statement of Retained Earnings
→ Beginning RE + NI/NL -
Dividends = Ending RE; Balance
Sheet → Assets
Fundamental Qualities of Useful :Relevance; Faithful Representation (complete neutral, accurate)
Info::
Enhancing Qualitative ::Comparability; Verifiability; Timeliness; Understandability
Characteristics:
Entity Assumption: ::Business is a separate legal entity.
Going Concern Assumption: :Business will continue into the foreseeable future.
Historical Cost Principle:: :Assets recorded at purchase cost.
Monetary Unit Assumption: :Stable currency is used (purchasing power assumed stable).
. Identify & Record Transactions 2. Prepare Journal Entries
(DR/CR) 3. Post to General Ledger (T-accounts) 4. Prepare
Steps of the Accounting Cycle:: Unadjusted Trial Balance 5. Prepare Adjusting Journal Entries 6.
Generate Financial Statements 7. Close the Books (revenues
expenses, dividends → reset for new period)
Cash - Account Type & ::Asset; Balance Sheet
Statement:
Cash - Increases With: ::Debit
::Record revenue when it is earned not necessarily when cash is
Revenue Recognition Principle:
received.
::Record transactions when they occur (not when cash is
Accrual Accounting:
exchanged).
::Done at end of period to make accounts ready for financial
Adjusting Accounts:
statements.
Assets increase with: ::Debit
Liabilities increase with:: :Credit
Equity increases with:: :Credit
Save
Students also studied
Perio Study DENT 475 - Implant components NBDE II Review - Pro
Teacher 78 terms 42 terms 69 terms
Hunter_Charters Preview gillphil Preview melissa_jarvis7
Terms in this set (26)
Definition of Accounting:::An processes data into financial statements, and communicates
information system that results to decision makers. Also called the "language of
measures business activities business."
Accounting Equation: :Assets = Liabilities + Equity
4 Basic Financial Liabilities, Equity; Statement of Cash Flows → Cash in/out by
Statements:::Income Statement operating, investing, financing
→ Revenues & Expenses;
Statement of Retained Earnings
→ Beginning RE + NI/NL -
Dividends = Ending RE; Balance
Sheet → Assets
Fundamental Qualities of Useful :Relevance; Faithful Representation (complete neutral, accurate)
Info::
Enhancing Qualitative ::Comparability; Verifiability; Timeliness; Understandability
Characteristics:
Entity Assumption: ::Business is a separate legal entity.
Going Concern Assumption: :Business will continue into the foreseeable future.
Historical Cost Principle:: :Assets recorded at purchase cost.
Monetary Unit Assumption: :Stable currency is used (purchasing power assumed stable).
. Identify & Record Transactions 2. Prepare Journal Entries
(DR/CR) 3. Post to General Ledger (T-accounts) 4. Prepare
Steps of the Accounting Cycle:: Unadjusted Trial Balance 5. Prepare Adjusting Journal Entries 6.
Generate Financial Statements 7. Close the Books (revenues
expenses, dividends → reset for new period)
Cash - Account Type & ::Asset; Balance Sheet
Statement:
Cash - Increases With: ::Debit
::Record revenue when it is earned not necessarily when cash is
Revenue Recognition Principle:
received.
::Record transactions when they occur (not when cash is
Accrual Accounting:
exchanged).
::Done at end of period to make accounts ready for financial
Adjusting Accounts:
statements.
Assets increase with: ::Debit
Liabilities increase with:: :Credit
Equity increases with:: :Credit
