financial accounting (exam 1) with correct answers graded A+ 2023

accounting - info system that measures business activities, processes info into reports/fin statements and communicates the results to decision makers financial accounting - branch of accounting that provides info to external users managerial accounting - branch of accounting that provides info to internal users FASB - Financial Accounting Standards Board ---sets accounting standards in the U.S. GAAP - Generally Accepted Accounting Principals IFRS - International Financial Reporting Standards --- non binding/more general than US GAAP IASB - International Accounting Standards Board --- sets accounting standards in the rest of the world SEC - Securities and Exchange Commision ---requires companies to publish improtant facts about thier business/regulates FASB and GAAP assets - economic resource that is expected to be beneficial in the future ---usually things, DEBIT/LEFT liability - economic obligation/debt payable to an individual or organization outside of the business ---payable, CREDIT/RIGHT accounting equation - assets = liabilities + owner's equity types of business - sole proprietorship, partnership, limited liability corp (llc), corp proprietorship - business owned by one person partnership - business owned and controlled by two or more people who have entered into a written agreement limited liability corporation - type of business with limited liability for the owners (don't pay corp income tax) ---business liable for debt corporation - business owned by stockholders who share in its profits but are not personally responsible for its debts who pays taxes in the type of businesses? - sole prop: no taxes (owner pays) partnership: no taxes (report to IRS) llc: no taxes corp: pays taxes equity - what's left over, insiders revenue - inflow ---resources, increase equity/earned by selling to customers expenses - outflow debit - left, expenses credit - right, revenue current liability - pay off in less then a year current asset - expected to be converted to cash, sold, or consumed in 1 yr income statement - revenues and expenses that total net income ---FOR THE MONTH OF... statement of retained earnings - beginning retained earnings - dividends + net income = ending retained earnings ---FOR THE MONTH OF... balance sheet - ending balances of assets, liabilities, owners equity ---AS OF... historical cost principle - assets and services should be recorded at their actual cost faithful representation - information that is complete, neutral, and free from error