ACCT 2101- TEST 1 UGA Exam questions with precise detailed || || || || || || || || ||
answers
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Assets - ✔✔something that the entity owns that create a future benefit... land, inventory,
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construction, are all examples of situations where in the future they are beneficial. So its an asset || || || || || || || || || || || || || || || ||
Liability - ✔✔Claims against an entity from an outsider asking for cash or assets... examples
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would be deferred payments, payables, discontinued liability/ operation
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Rewriting the equation - ✔✔A= L + SE || || || || || || || ||
For the creditors (peps you owe):
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L= A- SE || || ||
Owners of the entity: || || || ||
SE= A- L || ||
Stockholdes Equity - ✔✔This is what is the owners claims on the assets... This is broken down || || || || || || || || || || || || || || || || ||
further (see graphic in the pptx) || || || || ||
What are revenues? - ✔✔Up in assets from operation activities
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What are expenses? - ✔✔Down in assets. Net assets that were sacrificed to obtain revenues
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A transaction that says... "Issue common stock to owners for 40,000" - ✔✔This is an increase in
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cash, so an asset... to make this balance this also goes into common which is under SE
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, A transaction that says... "Buy PP&E for 3,400 cash - ✔✔In this situation, you are decreasing
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your cash but you're gaining an asset... so - in cash and + in the PP&E section, both assets
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A transaction that says... "Purchase inventory on credit for 55,000" - ✔✔Here, there is an increase
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in inventory... also there is an increase in acct. payable, because its on credit, so liability
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Pay vendor 32,000 of the amount owed - ✔✔This says, "amount owed." that tells you that it was
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on credit. being that you are paying it off, it is deceasing that acct. payable liability. Thus, this also
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decreases your cash
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Prepaid Expanses - ✔✔An expense is something that gotta pay, so this means that in some
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instances you would prepay it, before you use it. This is a benefit to you, so its an asset... (prepaid
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rent/ insurance are examples) || || ||
Payables - ✔✔This is stuff you need to pay in the future... this is accounts payable... an example
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of this is a wholesaler who gets products and when it sales it they pay the producer... this is like
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home depot ||
Obligation (unearned revenue) - ✔✔This is when the entity requires a prepayment before || || || || || || || || || || || || ||
anything happens... airliners || ||
Accrued Liabilities - ✔✔First, when you accrue something, you build it up overtime... examples
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of this is wages payable, interest payable, wages payable... this are accrued because the increase
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overtime if you don't pay them off... || || || || || ||
What do you put in your land value section? - ✔✔the historical cost (what you payed for it)... we
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are moving to fair value though
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What is good will? - ✔✔reputation of a company
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Assets increase with what? - ✔✔Debit || || || || ||
answers
||
Assets - ✔✔something that the entity owns that create a future benefit... land, inventory,
|| || || || || || || || || || || || || ||
construction, are all examples of situations where in the future they are beneficial. So its an asset || || || || || || || || || || || || || || || ||
Liability - ✔✔Claims against an entity from an outsider asking for cash or assets... examples
|| || || || || || || || || || || || || || ||
would be deferred payments, payables, discontinued liability/ operation
|| || || || || || ||
Rewriting the equation - ✔✔A= L + SE || || || || || || || ||
For the creditors (peps you owe):
|| || || || || ||
L= A- SE || || ||
Owners of the entity: || || || ||
SE= A- L || ||
Stockholdes Equity - ✔✔This is what is the owners claims on the assets... This is broken down || || || || || || || || || || || || || || || || ||
further (see graphic in the pptx) || || || || ||
What are revenues? - ✔✔Up in assets from operation activities
|| || || || || || || || ||
What are expenses? - ✔✔Down in assets. Net assets that were sacrificed to obtain revenues
|| || || || || || || || || || || || || ||
A transaction that says... "Issue common stock to owners for 40,000" - ✔✔This is an increase in
|| || || || || || || || || || || || || || || || ||
cash, so an asset... to make this balance this also goes into common which is under SE
|| || || || || || || || || || || || || || || ||
, A transaction that says... "Buy PP&E for 3,400 cash - ✔✔In this situation, you are decreasing
|| || || || || || || || || || || || || || || ||
your cash but you're gaining an asset... so - in cash and + in the PP&E section, both assets
|| || || || || || || || || || || || || || || || || ||
A transaction that says... "Purchase inventory on credit for 55,000" - ✔✔Here, there is an increase
|| || || || || || || || || || || || || || ||
in inventory... also there is an increase in acct. payable, because its on credit, so liability
|| || || || || || || || || || || || || || || ||
Pay vendor 32,000 of the amount owed - ✔✔This says, "amount owed." that tells you that it was
|| || || || || || || || || || || || || || || || || ||
on credit. being that you are paying it off, it is deceasing that acct. payable liability. Thus, this also
|| || || || || || || || || || || || || || || || || ||
decreases your cash
|| || ||
Prepaid Expanses - ✔✔An expense is something that gotta pay, so this means that in some
|| || || || || || || || || || || || || || || ||
instances you would prepay it, before you use it. This is a benefit to you, so its an asset... (prepaid
|| || || || || || || || || || || || || || || || || || || ||
rent/ insurance are examples) || || ||
Payables - ✔✔This is stuff you need to pay in the future... this is accounts payable... an example
|| || || || || || || || || || || || || || || || || ||
of this is a wholesaler who gets products and when it sales it they pay the producer... this is like
|| || || || || || || || || || || || || || || || || || || ||
home depot ||
Obligation (unearned revenue) - ✔✔This is when the entity requires a prepayment before || || || || || || || || || || || || ||
anything happens... airliners || ||
Accrued Liabilities - ✔✔First, when you accrue something, you build it up overtime... examples
|| || || || || || || || || || || || || ||
of this is wages payable, interest payable, wages payable... this are accrued because the increase
|| || || || || || || || || || || || || || ||
overtime if you don't pay them off... || || || || || ||
What do you put in your land value section? - ✔✔the historical cost (what you payed for it)... we
|| || || || || || || || || || || || || || || || || || ||
are moving to fair value though
|| || || || ||
What is good will? - ✔✔reputation of a company
|| || || || || || || ||
Assets increase with what? - ✔✔Debit || || || || ||
