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ACT2200 Midterm Review.docx - ACT200 Midterm Review Chapter...

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ACT200 Midterm ReviewChapter 1:1)Organizational Forms:Sole proprietorship: typical small business that has one owner, where owner and businessare not separate.Partnership: Two or more owners, and are not separate entities.Corporation: file articles of incorporation. Considered its own entity and is separate fromowners. It can take out loans on its own. Shareholdersboard of directorsmanagement.2)Accounting equation:Assets:stuff we own (cash, supplies, equipment, A/R)Liabilities: what we owe to people (N/P, A/P)Stockholder’s equity: ownership (CC, RE)A = L + SE3)Financial Statements:Income statement: tells us how the company is doing (generating profit/loss), revenues –expenses = Net income. This is for a specified period.Statement of Retained Earnings: tells us the amount of money we have retained. Beginningretained earnings + net income – dividends = Ending retained earnings.Balance Sheet: tells us the structure and composition of the company. (Assets = Liabilities +Stockholder’s equity). Accounts: cash, A/R, supplies, equipment, N/P, A/P, CC, RE.Statement of cash flows: reflects actual cash inflows and outflows. (Operating, Financing,and Investing cash flows).Vocab:Separate entity: tells us that when we look at Financial Statements we look only at thatentity.Faithful representation: statements accurately depict and convey economic substance ofwhat has occurred in the period.Relevance: FS must contain relevant information. *makes a difference in our decisionmaking.Unit of Measure: assume numbers represent our currency.Chapter 2:

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Generally Accepted Accounting Principles, Partnership
We have textbook solutions for you!
The document you are viewing contains questions related to this textbook.
Fundamentals of Financial Management
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Chapter 3 / Exercise 3-2
Fundamentals of Financial Management
Brigham
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