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Accounting 230 Final

Terms in this set (40)

The primary functions of FINANCIAL accounting:
Measure business activities...
Communicate to...
For decision making
What is the acronym for the "rules of accounting"?
GAAP (generally accepted accounting principles)
What board eliminates differences in accounting standards across the world?
IASB (international accounting standards board)
What business is owned by solely one person? pros and cons of it?
Sole proprietorship
Low taxes
Easily bankrupt
What business is owned by 2+ people? pros and cons?
Partnership
individual taxes
What business is legally separate from its owners? pros and cons?
corporation
2x taxes
limited liability
The revenues and expenses involved with providing goods and services to customers, such as rent salaries taxes etc
Operating
The purchase and sale of long term assets such as purchasing equipment
Investing... you are INVESTING in stuff thats gonna benefit you in the future
The business activities that involves creditors lenders the bank... borrowing money or stock
Financing
Explain the Income Statement. What does it look like?
Revenues on top, expenses in middle, net income or net loss on bottom.
Explain the statement of stockholders equity. What does it look like?
Beg balance
common stock
add NI
less dividends
ending balance

(across-->CS RE total SE)
Common stock is the only thing that goes under common stock.
Explain the Balance sheet. What does it look like?
All assets accounted for and added up equal the liabilities plus the stockholders equity.
Explain the statement of cash flows. What does it look like? Where do you find the cash at the beginning?
Operating inflows and outflows... net
Investing inflows and outflows... net
Financing inflows and outflows... net

All of the net totals combined is cash at end.
Cash at beginning is found in balance sheet.
DEA LOR
Dividends
Expenses
Assets
(D up C down)

Liabilities
Owner Equity
Revenue
(D down C up)
Full accounting equation-
A = L + SE
CS RE
beg re + NI - Dividends
R-E
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