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University of Arkansas - Fayetteville
University of Arkansas - Fayetteville
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What is an organization in which basic resources (inputs), such as materials and labor, are assembled and processed to provide goods or services (outputs) to customers?
What is the objective of most businesses?
What is the difference between the amounts received from customers for goods and services and the amounts paid for the inputs used to provide the goods and services?
What are the three types of businesses operated for profit?
What type of business provides services rather than products to customers? Examples?
- Service business
- Delta Air Lines & The Walt Disney Company
What type of business sells products they purchase from other businesses to customers? Examples?
- Wal-Mart & Amazon.com
What type of business changes basic inputs into products that are sold to customers? Examples?
- General Motors Corporation & Dell Inc.
What is the information system that provides reports to users about the economic activities and conditions of a business?
What are moral principles that guide the conduct of individuals?
What is the area of accounting that provides internal users with information?
Managerial accounting or management accounting
Managerial accountants employed by a business are employed in what?
What is the area of accounting that provides external users with information?
What are one type of financial accounting report that is distributed to external users?
General-purpose financial statements
Accountants and their staff who provide services on a fee basis are said to be employed in what?
Public accountants who have met a state's education, experience, and examination requirements may become what?
Certified Public Accountants (CPAs)
Financial accountants follow what in preparing reports?
Generally Accepted Accounting Principles (GAAP)
Within the United States, who has the primary responsibility for developing accounting principles?
Financial Accounting Standards Board (FASB)
What agency of the U.S. government has authority over the accounting and financial disclosure for companies whose shares of ownership (stock) are traded and sold to the public?
Securities and Exchange Commission (SEC)
Many countries outside the United States use generally accepted accounting principles adopted by who?
International Accounting Standards Board (IASB)
What limits the economic data in an accounting system to data related directly to the activities of the business?
Business entity concept
What is the form of business entity which is owned by one individual?
What is the form of business entity which is owned by two or more individuals?
What is the form of business entity which is organized under state or federal statutes as a separate legal taxable entity?
What is the form of business entity which combines the attributes of a partnership and a corporation?
Limited Liability Company (LLC)
Because of the large amount of resources required to operate a manufacturing or large retailer business they are what form of a business entity?
Under what concept are amounts initially recorded in the accounting records at their cost or purchase price?
What is an example of the cost concept?
If a house is bought at $50,000 and later listed at a higher price you would not include that listing in the accounting
What concept requires that the amounts recorded in the accounting records be based on objective evidence?
Based on the objectivity concept, what is only objective enough to be recorded in the accounting records?
Final agreed-upon amount
What requires that economic data be recorded in dollars?
Unit of Measure Concept
What are the resources owned by a business? Examples?
- Cash, land, buildings, and equipment
What are the debts of the business?
What are the rights of the owners?
- Owners Equity
What is the accounting equation?
Assets = Liabilities + Owner's Equity
Why are liabilities usually shown before owner's equity in the accounting equation?
Because creditors have first rights to the assets
What is such an economic event or condition that directly changes an entity's financial condition or its results of operations?
Stocks issued to stockholders is referred to as what?
What is the owner's equity in a corporation?
Prepaid expenses are what type of account?
Fees earned is what type of account?
What are assets used in the process of earning revenue?
What are the primary financial statements of a corporation?
1) Income Statement
2) Retained Earnings Statement
3) Balance Sheet
4) Statement of Cash Flows
List what is on the Income Statement
- Fees Earned
- Net Income
List whats is on the Retained Earnings Statement
- Retained Earnings at beginning of period
- Net income for period
- Less dividends
- Increase or decrease in retained earnings
- Retained Earnings at end of period
List what is on the Balance Sheet
- Left side - Assets and total assets
- Right side - Liabilities, Stockholders Equity, and Total liabilities and stockholders' equity
List what is on the Statement of Cash Flows
- Cash flow from operating activities
- Cash flow from investing activities
- Cash flows from financing activities
- Net cash flow and period cash balance
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