Category: Bookkeeping

EB6.https://ronbo.ru/article-en/optical-sight-en.html 2.2For the items listed below, indicate how the item affects equity . 7.LO 2.2Identify/discuss one similarity and one difference between tangible and intangible assets.

• The balances of two asset accounts have changed.
• Cash flows provide more information about cash assets listed on a balance sheet and are related, but not equivalent, to net income shown on the income statement.
• Unidentifiable intangible assets include brand and goodwill.
• The English words credit and debit come from the Latin words credre and debere, respectively.
• Owner’s draws will cause owner’s equity to decrease.
• Double entry is an accounting term stating that every financial transaction has equal and opposite effects in at least two different accounts.

Let’s consider a company whose total assets are valued at $1,000. In this example, the owner’s value in the assets is $100, representing the company’s equity. Under the umbrella of accounting, liabilities refer to a company’s debts or financially-measurable obligations. Liability is also classified as current or long-term. The key components in measuring income are _______. Assets and liabilities revenue and liabilities retained earnings and expenses revenue and expenses expenses and assets revenue and assets. Two key elements in accounting are debits and credits.

5: Practice Questions

Retained earningsare part of shareholders’ equity. This number is the sum of total earnings that were not paid to shareholders as dividends. The accounting equation is considered to be the foundation of the double-entry accounting system. Regardless of when payment is made when services are sold, the revenue should be recorded at the time of the sale. When a company makes a sale of $300.00, assets and owner’s equity increase by $300.00. When a business pays cash for insurance, a liability is increased.

Liabilities, expenses, and assets. Assets, expenses, and withdrawals. Revenue, liabilities, and capital.

Question 5

Writing off a bad http://turbotwitch.ru/satcrakers/sravnit/kovriki/ expense will decrease a company’s accounts receivable balance. Writing off a bad debt expense will increase a company’s accounts receivable balance. Pro forma statements are public financial statements used to determine a company’s profitability. The fundamental difference between indirect and direct cash flow statements is how _____________ activities are recorded.

Income earned in one period is accurately matched against the expenses that correspond to that period so you see a clearer picture of your net profits for each period. Your accounting records are vitally importantbecause the resulting financial statements and reports help you plan and make decisions. These statements and reports may be used by some third parties like bankers, investors or creditors, and are needed to provide information to government agencies, such as the IRS. Purchase transactions results in a decrease in the finances of the purchaser and an increase in the benefits of the sellers. Once the company prepares its financial statements, it will contract an outside third party to audit it.

What is the accounting equation? Briefly explain each of the three parts.

http://www.photoukraine.com/english/photos/theme/4/6784 is treated like capital, which is an owner’s equity account, and owner’s equity is increasedwith a credit, and has a normal credit balance. Conversely, a decrease (-) to an asset account is a credit. A decrease (-) to a liability account is a debit. An increase (+) to an asset account is a debit.

EA6.LO 2.2For the items listed below, indicate how the item affects equity (increase, decrease, or no impact. 12.LO 2.3Explain the purpose of the statement of cash flows and why this statement is needed. $350 would show up on the statement of cash flows as a cash outflow. If a company has an inventory turnover ratio of 2 to 1, it means that the company’s inventory turned over twice in the reporting period. Liabilities are generally listed based on their due dates. Liabilities are said to be either current or long-term. Current liabilities are obligations a company expects to pay off within the year.