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Chapter 1 Accounting

Terms in this set (13)

Financing Activities
Activities that obtain from investors and creditors the cash needed to launch and sustain the business
Investing Activities
Includes cash transactions involving the purchase and sale of long-term assets and current investments
Operating Activities
Cash flow activities that include the cash effects of transactions that create revenues and expenses and thus enter into the determination of net income.
The Financial Statements in Order
1. Income Statement
2. Statement of Retained Earnings
3. Balance Sheet
4. Statement of Cash Flows
Revenue deals with?
Sales, Service Revenue
Expenses deal with
Salaries, Rent, Utilities
Common Stock Formula
Beginning Common Stock + Issuance = Ending Common Stock
Ending Retain Earnings
Beginning Retain Earnings + Net Income or - (Net Loss) - Dividend Decleared
Stockholders' Equity =
common stock + retained earnings
Assets =
liabilities + stockholders equity
Assets - Liability =
Stockholders Equity
3 types of businesses
sole proprietorship, partnership, corporation
Primary Purpose of Audit
Determine the Financial Reports
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