Accounting test 1 Guide .docx - ChapterOne 1 2 3 Investors,creditors, Marketingmanagers,creditmanagers,supplych

Accounting test 1 Guide .docx - ChapterOne 1 2 3...

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Accounting Test One Study Guide  Chapter One 1.What is the purpose of financial accounting? 2.How is it different from managerial accounting? 3.Who uses accounting information? Investors, creditors, and prepares of financial statementsMarketing managers, credit managers, supply chain managers and human resource man-agers  4.What are the four primary financial statements issued by companies? What is the purpose of each? Balance Sheet- Reports the amount of assets, liabilities, and stockholders’ equity of an ac-counting unity at a point in time.-Examples: Cash, Accounts receivable, plant and equipment, notes payable, contributed capital.Income Statement- Reports revenues, expenses, and net income for a stated period of time. -Examples: Sales revenue, cost of goods sold, selling expense, interest expenseStatement of Stockholders’ Equity- Explains changes in stockholders’ equity accounts, in-cluding the change in the retained earnings balance caused by net income and dividends dur-ing the reporting period.-Examples: Net income is taken from the income statement; Dividends are distributions tostockholdersStatement of cash flow- Reports inflows and outflows of cash during the accounting period inthe categories of operating, investing, and financing.-Examples: Cash collected from customers, cash paid to suppliers, cash paid to purchaseequipment, and cash borrowed from banks.I.Where on Quiz-The ending cash balance - balance sheet and Cash flow statement -The amount owed to the company at the end of the period for sales made on credit - bal-ance sheet -The amount of dividends paid to stockholders during the period; regardless of the period in which they were declared - Cash flow statement -The value of all sales made by the company during the period; both for cash and on credit - Income statement -The value of inventory on-hand at the end of the period - balance sheet -The amount of debt borrowed during the period - cash flow statement 
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