Accounting 101 Final Study guide
Partnership- has two or more parties as co-owners each is an owner
Corporation- Owned by stockholders, or shareholders, who own stock representing share of ownership in the corporation.
Investing: increase/decrease long-term activities, plants equipment
Operating: loans, pay dividends, repurchase its own stock, selling
It must be capable of making a difference to the decision maker, having predictive or confirming value. It must be material, which means it must be important enough to the informed user.
Tells what obligations will be due in the future
Summarizes results, operations for a period of time
Single most important item on financial statement
You give something, you receive something in return.
Shows whether total debits equal total credits.
Credit – Supplies (Revenue)
To record supplies for the month.
Credit – Advance Payments Revenues (Service revenue)
To record unearned revenues but not yet received.
Credit – Accumulated Depreciation
To record depreciation for the month.
Credit – Wages and Salary Payable
To record wages and salaries owed.
-Adequate documents and records
n/10: Entire balance is due within 30 days
merchandise to the buyer
Destination is shipper
Measures the number of times a company sells its inventory during the year. How rapidly inventory is sold
The business reports ending inventory at its LCM value on the balance sheet.
Known Amounts: Accounts payable, short-term notes payable, unearned revenues, accrued expenses
The rights of the considered property should be recorded on the balance sheet.
Common Stock increased – $1
Additional Paid-in Capital increased -$19
-Business wants to increase net assets by buying its stock low and hoping to resell it for higher price.
-Avoid a take over by an outside party
Payment Date: Payment of dividends
Divide everything by the net sale amount
Cost of goods sold/average inventory=Inventory turnover
Net sales/Average Net receivables= Accounts receivable turnover
(Net income – Preferred Dividends)/Average # shares of common stock outstanding=EPS