Study Guide ACG2021L.docx - Miami Dade College Study Guide...

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Miami Dade CollegeStudy GuideChapters 1, 2, & 3Mariya TchakmazovaACG2021LProfessor Sonya GopalaniNovember 15, 2017
Chapter 1: Introduction to AccountingAccounting:Process of recording, analyzing, summarizing and reporting. Recording – journalsAnalyzing – ledgerSummarizing – trial balanceReporting – balance sheet, income statement, statement of retained earnings, statement of cash flow Accounting Guideline– GAAP – Generally Accepted Accounting Principles3 Types of Businesses: 1.Service Business – provide service rather than products to customers (external)2.Merchandising Business – sells products purchased from other businesses to customers (external)3.Manufacturing Business – change basic inputs to products that are sold to customers (internal) 2 Types of Accountants: 1.Public – must have a license issued by the state. Certify documents that are free of error (financial audits)2.Private – any accountant, degree/no degree. Example: managerial accounting, more for internal use. Managerial Accounting: (internal) accounting that deals with information designed to meet specific needs of a company’s management. Financial Accounting: (external) accounting that is concerned with recording transactions using GAAP for a business or other economic unit and with a periodic preparation of various statements from records – send out reports.
Assets=Liabilities+Owners EquityResourcesowned by anindividual orcompany thathave financialvalue=Obligationsowed tosomeone(cc/loan…)+Owners right tothe assets of thebusinessAssets– cash, accounts receivable, prepaid, PPE (property, plan and equipment) Liabilities– accounts payableOwners Equity– revenue – expense + common stock – dividends Revenue:amount earned selling good or servicesExpense:amounts used to generate revenueExample:$1000 (assets) = $400 (liabilities) + $600 (owners equity)Accounts Receivable – assets

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