ACG 2021 Exam 1 Review

ACG 2021 Exam 1 Review accounting Correct Answer: the information system that measures business activities, processes that information into reports and financial statements, and communicates the results to decision m ...

ACG 2021 Exam 1 Review accounting Correct Answer: the information system that measures business activities, processes that information into reports and financial statements, and communicates the results to decision makers accounting equation Correct Answer: ASSETS = LIABILITIES + STOCKHOLDER'S EQUITY Balance Sheet Correct Answer: (Statement of Financial Position) list of an entity's assets, liabilities, and owner's equity as of a specific date. Dated at a specific time -accounts payable -inventory -long-term debt -cash -retained earnings -common stock Continuity Assumption or Going- Concern Assumption Correct Answer: holds that the entity will remain in operation for the foreseeable future Corporation Correct Answer: a business owned by stockholders. A legal entitiy current liability Correct Answer: a debt due to be paid within one year or within the entity's operating cycle if the cycle is longer than a year current asset Correct Answer: an asset that is expected to be converted to cash sold, or consumed during the next 12 months, or within the business's normal cylce if the cycle is longer than a year deficit Correct Answer: negative balance in retained earnings caused by net losses over a period of years dividends Correct Answer: distributions (usually cash) by a corporation to its stockholders fair value Correct Answer: the amount that a business could sell an asset for, or the amount that a business could pay to settle a liability financial accounting Correct Answer: the branch of accounting that provides information Generally Accepted Accounting Principles Correct Answer: Accounting guidelines , formulated by the Financial Accounting Standards Board, that govern hoe accounting is practiced Historical Cost Principle Correct Answer: Principle that states that assets should be recorded at their actual cost Income Statement (Statement of Operations) Correct Answer: A financial statement listing an entity's revenues, expenses, and net income or net loss for a specific period of time. account Correct Answer: the record of the changes that have occurred in a particular asset, liability, or stockholders equity during a period of time. The basic summary device of accounting accrued liability Correct Answer: a liability for an expense that has not yet been paid by the company Credit Correct Answer: right side of an account Debit Correct Answer: the left side of an account Journal Correct Answer: the chronological accounting record of an entity's transactions ledger Correct Answer: the book of accounts and their balances Posting Correct Answer: Copying amounts from the journal to the ledger transaction Correct Answer: any event that has a financial impact on the business and can be measured reliably Trial Balance Correct Answer: a list of all the ledger accounts with their balancces Account Format Correct Answer: a BS format that lists assets on the left and liabilities on the right accrual Correct Answer: an expense or a revenue that occurs before the business pays or receives cash. An accrual is the opposite of a deferral accrual accounting Correct Answer: accounting that records the impact of a business event as it occurs, regardless of whether the transaction affected cash accrued expense Correct Answer: an expense incurred but not yet paid in cash accrued revenue Correct Answer: a revenue that has been earned but not yet received in cash accumulated depreciation Correct Answer: the cumulative sum of all depreciation expense from the date of acquiring a plant asset Adjusted Trial Balance Correct Answer: a list of all the ledger accounts with their adjusted balances book value (of a plant asset) Correct Answer: the asset's cost minus accumulated depreciation Cash-Basis Accounting Correct Answer: accounting that records only transactions in which cash is received or paid Classified Balance Sheet Correct Answer: a balance sheet that shows current assets separate from long-term assets and current liabilities separate from long-term liabilities Closing the books (Closing the accounts) Correct Answer: the process of preparing the accounts to begin recording the next period's transactions. Closing the accounts consists of journalizing and posting the closing entries to set the balances of the revenue, expense, and dividends accounts to zero Closing Entries Correct Answer: entries that transfer the revenue, expense, and dividends balances from these respective accounts to the RE account contra account Correct Answer: an account that always has a compan