Accounting 301 Exam #1

Preferred stock

capital stock (equity)

good will

intangible asset

salaries + wages payable

current liability

accounts payable

current liability

buildings

property, plant, and equipment

equity investments (to be sold in a year)

current asset

CURRENT maturity of long-term debts

CURRENT liability

premium on bonds payable

non current liability

allowance for doubtful accounts

current asset

accounts recievable

current asset

notes payable (due next year)

within 12 months: current liability (for exam)
out of 12 months: non current liability

supplies

current asset

common stock

equity (capital stock)

land

plant, property, and equipment

inventory

current asset

prepaid insurance

current asset

bonds payable

long term liability (as long as it is within 12 months)

income tax payable

current liability

who are the primary users of financial statements?

investors and creditors

what are the common set of accounting standards called?

GAAP

who writes gaap for public companies?

FASB- financial accounting standards board

what is the underlying theme of the conceptual framework?

decision usefulness

what is the objective of financial reporting?

used to identify, measure, and analyze & communicate financial information needed by mgmt to plan, control, evaluate, company operations

if the LIFO or FIFO inventory method was used last period, why should it be used for current + future periods?

consistency

what is meant by comparability when discussing financial accounting info?

info is measured + recorded in a similar manner across companies

the heirarchy of accounting qualities identifies _______ as foundational qualities

relevance and faithful representation

posting is the process of transferring items entered in a general journal to the…

general ledger

a trial balance may prove that…

debits equal credits

everything that could go wrong in a trial balance

1. double entry

2. forget an account

3. wrong amounts

4. wrong accounts

what is the purpose of closing entries?

reducing the balance to zero closed into the next accounting period's retained earnings.

revenue + expense accounts to zero to accumulate the balances of the next period

how do i record the sale of inventory on account?

1) debt- accounts receivable, credit- sales rev
2) debit- cost of goods sold, credit- inventory

normal account balances

debit: asset and expense/ credit: liability, equity, revenue

what is the journal entry for accrued expense

debit expense, credit accounts payable

what item is recorded net of tax on the income statement

discontinued operations

gain on sale of equipment is considered

incidental or peripheral

comprehensive income DO NOT INCLUDE

investment by owners

income tax expense is not in the operation section of the

multi-step income statement

what cant you use balance sheets for?

not for profitability