Describe The Main Difference Between Financial Accounting An

Describe The Main Difference Between Financial Accounting And Manag

Describe The Main Difference Between Financial Accounting And Managerial Accounting. List 3 different users (stakeholders) of financial statement information. True or False - Accounting is not important to not-for-profit organizations. What does GAAP stand for? What is it? The ___________ ____________ ____________ Board establishes the rules for financial accounting. There are 4 main financial statements. Name and describe 1 briefly. What is the accounting equation? The ______________ ________________ concept states that assets must be recorded in the financial statements at their original cost. True or false – the collection of all accounts and their ending balances is the trial balance. This shows whether the company’s total debits equals its total credits. Assets on the Balance Sheet are listed in the order of ____________________. True or false - every transaction has two sides and both sides must be in balance at all times. Cash flows are broken into 3 sections for the Statement of Cash flows. Which one is not correct: a. financing activities b. operating activities c. investing activities d. ongoing activities. The main source of cash for a business stems from: a. entity activities b. financing activities c. operating activities d. investing activities. True or false – Closing the books is the process of closing and transferring the temporary accounts to Retained Earnings to reset them to $0 for the next period. True or false – The permanent accounts are also closed at the end of the period. Which of the following accounts does not normally have a credit balance (think of the accounting equation)? a. Liabilities b. Equity c. Assets d. Revenues. Draw a T-account and label the sides as debit side and credit side. Identify the financial statement/statements on which each of the following titles or accounts would appear: Retained Earnings, Revenue, Common Stock, Financing Activities, Salaries Expense, Land, Ending Cash Balance, Notes Payable. Classify items for the statement of cash flows: Borrowed cash from the bank, Paid cash for salary expense, Performed services for cash, Paid cash to purchase land, Paid cash for utilities expense, Sold land for cash, Paid cash on principal of loan, Received cash from the issuance of stock. Classify the following as Asset (A), Liability (L), or Owner’s Equity (E) item: accounts receivable, accounts payable, equipment, unearned revenue, common stock, supplies, land, retained earnings, prepaid expenses, inventory. Why is it required by GAAP that we use accrual accounting? The account unearned revenue is a. An asset b. A liability c. An expense d. Revenue. A prepaid expense is ________ when it is initially recorded a. An asset b. A liability c. An expense d. Revenue. Which of the following accounts is not closed out during the closing process? a. Land b. Depreciation expense c. Interest revenue d. Salary expense. The ___________- __________ Act changed how corporations look and account for internal controls. This act was in direct response to the Enron/Arthur Andersen scandal. The ______________ principle states that expenses should be recognized in the month they helped generate revenue (i.e., match expenses to the revenues they help generate). State whether the following transaction increased total assets (I), decreased total assets (D), or had no effect on total assets (NE): Borrowed $50,000 from the bank, purchased land for $40,000 cash, received $20,000 cash and issued stock to a shareholder, paid $60,000 cash on accounts payable, purchased equipment for $100,000 and signed a promissory note to pay for it later, received $1,000 cash from a customer on account. Classify each as an Asset (A), Liability (L), or Owner’s Equity (E) item: accounts receivable, accounts payable, equipment, unearned revenue, common stock, supplies, land, retained earnings, prepaid expenses, inventory. Why is it important for accountants to follow ethical guidelines? A (deferral or accrual) is recorded when an expense has been incurred or revenue has been earned, but cash has not yet been received/paid. A (deferral or accrual) is recorded when cash has been received/payed but an expense has not yet been incurred or revenue has not yet been earned. Identify each of the following events as an accrual, deferral, or neither: incurred other operating expenses on account, recorded expense for salaries owed to employees, paid a cash dividend to stockholders, paid cash to purchase supplies to be used in the next several months, purchased a delivery van with a 5-year life, provided services on account, paid 1 year’s rent in advance, collected cash in advance for services to be performed over the next year. True or false – the notes to the financial statements are an integral part of the financial statements and should be reviewed to gain a complete picture of the company’s financial situation. True or false – the external auditors are responsible for reviewing and giving an opinion on the notes to the financial statements as well as the overall financial statements. True or false – the external auditors are responsible for reviewing and giving an opinion on the management discussion and analysis section (MD&A) of the annual report. Record the journal entry for the following transactions: bought land for $40,000 with cash, purchased office supplies for $700 on account, received a cash payment of $6,000 from a customer as payment on their account (services were already performed). Record the following adjusting entries: purchased supplies for $700, end of the month supplies count reveals $300 remain, paid $6,000 for 6 months rent in advance, $10,000 of unearned revenue earned 1/5th. Sales – Cost of Goods sold = ________________. Which inventory system measures inventory continually? What do the terms 2/10, n/30 mean? Indicate if freight terms are FOB destination or FOB shipping point for various transactions. What is meant by the Lower of Cost or Market rule? Why do companies use ratios to measure inventory turnover and days in inventory? Given a set of inventory data, calculate COGS under FIFO, LIFO, and weighted average methods. Determine ending inventory under FIFO, LIFO, and weighted average. Use lower-of-cost-or-market rule to value inventory. Explain the importance of internal controls and identify two types. True or false – adjusting bank balance requires journal entries. Identify items to be added or subtracted from bank and book balances to determine true cash balance.