question

corporation

answer

a business enterprise that raises money by issuing shares of stock, easy to transfer ownership, easier to raise funds, no personal liability

question

creditor

answer

a party to whom a business owes money, cars salesmen, bank ect..

question

accounts receivable

answer

right to receive money from a customer in the future from a sale

question

partnership

answer

a business that is owned jointly by two or more people but does not issue stock, simple to establish, shared control, broader skills and resources, tax advantages

question

stockholder

answer

a party that invests in common stock

question

common stock

answer

the portion of a stockholders equity that results from receiving cash from investors

question

accounts payable

answer

obligations to suppliers of goods

question

auditor's opinion

answer

an expression about whether financial statements conform with generally accepted accounting principles

question

accounts payable (what is it)

answer

liability, operating activity

question

accounts receivable (what is it)

answer

asset, operating activity

question

equipment, property, plant

answer

asset, investing activity

question

sales revenue

answer

revenue, operating activity

question

service revenue

answer

revenue, operating activity

question

inventory

answer

asset, operating activity

question

mortgage payable

answer

liability, financing activity

question

supplies expense

answer

expense, operating activity

question

rent expense

answer

expense, operating activity

question

salaries and wages expense

answer

expense, operating activity

question

retained earnings

answer

stockholders equity

question

cost of goods sold

answer

expense

question

cash

answer

asset

question

notes payable

answer

liability

question

long-term debt

answer

liability

question

net sales

answer

revenue

question

common stock

answer

stockholders equity

question

sole proprietorship

answer

a business owned by one person, simple to set up and gives you control over the business, tax advantages

question

internal users

answer

managers who plan, organize, and run a business (human resources, finance, marketing, management

question

external users

answer

taxing authorities, customers, labor unions, creditors, investors, regulatory agencies. internal users use them to make decisions to buy, hold, or sell stock

question

sarbanes-oxley act of 2002

answer

congress passed to reduce unethical corporate behavior and decrease the liklihood of future corporate scandals

question

all businesses are involved in 3 activites

answer

financing, investing, operating

question

accounting info system

answer

keeps track of the results of each of these businesses

question

financing activities

answer

borrowing money (liabilities, creditors) and issuing shares of stock (dividends)

question

investing activities

answer

purchasing of resources a company needs to operate (trucks, computers, buildings, furniture. all called assets- resources owned by a business

question

operating activities

answer

revenues, inventory, accounts receivable. expenses, liabilities, net income, net loss

question

revenues

answer

amounts earned from the sale of products (sales, service, interest revenues)

question

inventory

answer

good available for sale to customers

question

expenses

answer

cost of assets consumed or services used (cost of goods sold, selling, marketing, administrative interest, income taxes)

question

net income

answer

when revenues exceed expenses

question

net loss

answer

when expenses exceed revenues

question

income statement

answer

reports revenues and expenses for a specific period of time. either will have a net income or net loss

question

retained earnings statement

answer

shows amounts and causes of changes and time period is same as income statment

question

balance sheet

answer

reports assets and claims to assets at a specific point in time. list assets first followed by liabilities and stockholders equity

question

assets =

answer

liabilities + stockholders equity

question

management discussion and analysis (MD)

answer

covers the companies ability to pay near-term obligations, its ability to fund operations and expansion and its results of operations.

question

cash received from customers

answer

operating activity

question

dividends paid to stockholders

answer

financing

question

cash received from issuing new common stock

answer

financing

question

cash paid to suppliers

answer

operating

question

cash paid to purchase new building

answer

investing

ACCY 201 Quiz 1 – Flashcards

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