ACC 151 - ACC 151 Exam#1 Review Chapter 1 Accounting – is...

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Unformatted text preview: ACC 151 Exam #1 Review Chapter 1: Accounting – is an information and measurement system that identifies, records, and communicates relevant, reliable, and comparable information about an organization Record Keeping- recording of transactions and events External Users – not directly involved in running the organization Internal Users – involved in running the organization Ethics – Beliefs that distinguish right from wrong (behavior) G enerally A ccepted A ccounting P rinciples – rules and concepts that govern the financial accounting practice Objectivity Principle – means that accounting information is supported by independent, unbiased evidence. Not based on opinion of preparer but the financial statement Cost Principle – means that accounting information is based on actual cost Going-Concern Principle – means that accounting information reflects an assumption that the business will continue to operate instead of being closed or shut down Monetary Unit Principle – means transactions are expressed in money or units Revenue Recognition Principle –provides guidance on when company must recognize revenue. Business Entity Principle – means a business is accounted for separately from other business entities, including its owner Assets- are resources with future benefit that are owned or controlled by a company [cash, supplies, equipment, land, receivable…] Liabilities – What a company owes its non-owners (creditors) in future pay or service [payable: wages, accounts, notes, taxes payable] Equity – Also called owners equity or capital, refers to the claims of its owners. [Common stock, retained earnings, dividends (reduce retained earnings), revenues, expenses] Assets = Liabilities + Equity Common Stock – Dividends + Revenues - Expenses Chapter 2: Source Documents – Identify and describe transactions and events entering the accounting process, they are the sources of the account information Account – a record of increases and decreases in a specific asset, liability, equity, revenue, or expense item, recorded in a ledger General Ledger/Ledger – a record containing all accounts used by a company Chart of Accounts – a list of all accounts company uses and includes an identification number assigned to each account. [101-199 asset; 201- 299 liability; 301-399 equity; 401-499 revenue; 501-699 expense] T-account – a ledger account and used to see the effects of more transactions. Debit (dr) is on the left. Credit (cr). The difference between the total debit and total credit for and account is the account balance . Double-Entry Accounting – the total amount debited must equal the total amount credited for each transaction. * debit/credit ⇑ Assets ⇓ = ⇓ Liabilities ⇑ + ⇓ Equity ⇑ ⇓ Common Stock ⇑ – ⇑ Dividends ⇓ + ⇓ revenues ⇑- ⇑ Expenses ⇓ General Journal/Journal – a complete record of ach transaction in one please it shows debits and credits per transaction Posting – transferring journal entry information to the ledger Topics:...
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This note was uploaded on 04/16/2008 for the course HISTORY 103 taught by Professor Jones during the Spring '08 term at Syracuse.

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ACC 151 - ACC 151 Exam#1 Review Chapter 1 Accounting – is...

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