ACC BLOCK1 – Flashcards

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Steps to making a journal entry
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1. identify all the accounts that are affected by the transaction 2. identify how the accounts would be classified 3. determine if the accounts are increasing or decreasing 4. ask yourself how the accounts in the transaction would be increased or decreased
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working capital equation
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current assets - current liabilities
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current ratio
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current assets ------------------------ current liabilities
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debt to assets ratio
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total liabilites ---------------------- total assets
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free cash flow
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net cash provided by operating activities - capital expenditures - cash dividends
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earnings per share
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net income - preferred dividends ------------------------------------------------------ average common shares outstanding
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cash
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asset debit
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accounts recivable
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asset debit
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allowance for doubtful accounts
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asset credit
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interest receivable
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asset debit
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inventory
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asset debit
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supplies
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asset debit
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prepaid insurance
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asset debit
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prepaid rent
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asset debit
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land
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asset debit
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equipment
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asset debit
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accumulated depreciation- equipmentn
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asset credit
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buildings
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asset debit
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accumulated depreciation- buildings
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asset credit
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copyrights
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asset debit
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goodwill
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asset debit
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patents
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asset debit
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Balance Sheet
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Asset Liabilities Stockholder's Equity
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notes payable
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liability credit
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accounts paybale
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liability credit
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unearned service revenue
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liability credit
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salaries and wages payable
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liability credit
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interest paybale
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liability credit
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diiviidends payable
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liability credit
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income taxes payable
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liability credit
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bonds payable
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liability credit
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discount on bonds payable
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liability debit
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premium on bonds payable
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liability credit
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mortgage payable
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liability credit
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common stock
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SE credit
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paid in capital in excess of par value-- preferred stock
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SE credit
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paid in capital in excess of par value-- common stock
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SE credit
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treasury stock
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SE debit
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preferred stock
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SE credit
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retained earnings
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SE credit
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income statement
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revenues expenses
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service revenue
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revenues credit
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sales discount
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revenues debit
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sales returns and allowances
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revenues debit
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interest revenue
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revenues credit
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gain on disposal of plant assets
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revenues credit
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administrative expenses
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expenses debit
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amortization expense
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expenses debit
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bad debt expense
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expenses debit
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cost of goods sold
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expenses debit
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depreciation expene
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expense debit
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freight-out
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expense debit
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income tax expense
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expense debit
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insurance expense
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expense debit
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interest expense
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expense debit
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loss on disposal of plant assets
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expenses debit
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maintenance and repairs expense
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espense debit
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rent expense
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expense debit
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salaries and wages expense
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expense debit
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selling expense
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expense debit
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supplies expense
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espense debit
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utilities expense
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expense debit
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borrowing money is an example of
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financing activity
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issuing shares of stock in exchange for cash is an example of
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financing activity
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which activity invollves collecting the necessary funds to support the business?
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financing activity
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buying assets needed to operate a business is an example of an
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investing activity
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which activity involve putting the resources of the business into action to generate a profit?
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operating activity
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the statement of cash flows would disclose the payment of a dividend
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in the financing activities section
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buying and selling products are examples of
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operating activities
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current ratio 6.33:1
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for every $1 of liabilities you have $6.33 of assets
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depreciation is not a valuation process
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it is a cost allocation
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10000 ---------- 5
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straight line depreciation - record as expense
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net working capital
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current assets - current liiabilities
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retained earnings def
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accumu.ation of ALL the net income of a business minus the dividends over its lifetime
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intangible assets have
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no value to banks
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prepaid insurance def
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5yr fire policy: 1/5 written off as an expense
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debit
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left side of a t account
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credit
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right side of a t account
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ASSETS (dr and cr)
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debit + credit -
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LIABILITIES
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debit - credit +
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SE
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debit - credit +
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ASSETS =
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LIABILITIES + SE
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Cash flow
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Operating Financing Investing
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