ACCT 2000 LOWE-ARDOIN EXAM 1 ACTUAL /NEWEST WELL SORTED QUESTIONS AND ANSWERS /GRADED A+ | Study Guide | A+

ACCT 2000 LOWE-ARDOIN EXAM 1 ACTUAL /NEWEST WELL SORTED QUESTIONS AND ANSWERS /GRADED A+ | Study Guide | A+ Accounting is the information system that ____________, ___________, and ________________ the economic events of an organization to interested users. - ANSWER -IDENTIFIES RECORDS COMMUNICATES Internal Users - ANSWER -Managers, Supervisors, Company officials External Users - ANSWER -Investors, Creditors, Regulators Financial Scandal led to this Act - ANSWER -Sarbanes-Oxley Act in 2002 (SOX Act) 3 Types of Business Activites - ANSWER -1. Financing- raising money (or borrowing) 2. Investing (purchase of resources needed to operate) 3. Operating (Day to Day operations) Amounts Owed - ANSWER -Liabilities Party to whom amounts are owed - ANSWER -Creditors Payments to stockholders - ANSWER -Dividends Assets - ANSWER -Resources owned by a business Revenues - ANSWER -Amounts earned from the sale of products - Sales revenue - Service revenue - Interest revenue Inventory - ANSWER -Goods available for sale to customers Accounts Recievable - ANSWER -Amounts owed from customers as the result of a sale Expenses - ANSWER -Cost of assets consumed or services used Liabilities - ANSWER -Arising from expenses - Accounts Payable - Interest Payable - Wages Payable - Sales Taxes Payable - Income Taxes Payable - Notes Payable - Unearned Service Revenue *EVERYTHING PAYABLE AND UNEARNED SERVICE REVENUE* Net Income - ANSWER -Revenues Expenses Net Loss - ANSWER -Revenues Expenses Income Statement - ANSWER -Revenues & Expenses for a SPECIFIC PERIOD OF TIME Retained Earnings Statement - ANSWER -- Net income is needed to determine the ending balance in retained earnings - Shows amounts and causes of change in retained earnings - Time period is same as income statement - Ending balance in retained earnings is needed in balance sheet Balance Sheet - ANSWER -Reports assets & claims to assets at a SPECIFIC POINT IN TIME - Assets = Liabilities + Stockholder's Equity - List assets first, then liabilities, then stockholder equity Statement of Cash Flows - ANSWER -Provide financial information about the cash receipts & cash payments of a business - Reports cash effects of Operating, Investing, & Financing activities Components of an Annual Report - ANSWER -- Financial Statements - Management Discussion & Analysis (MD&A) - Notes to the Financial Statements - Independent Auditors report INCOME STATEMENT ORDER - ANSWER -- Revenues - Expenses = Net Income RETAINED EARNINGS STATEMENT ORDER - ANSWER -- Retained earnings from beginning of time period - Add: Net Income - Less: Dividends = Retained earnings at end of time period BALANCE SHEET ORDER - ANSWER -- Assets - Liabilities - Stockholder Equity Sole Proprietorship - ANSWER -- Generally owned by one person - Simple to establish - Owner controlled - Tax advantages - Personal Liability Partnership - ANSWER -- Owned by 2 or more people