Homework_1 - Student Name: Kiril Ravnachki BUS 208 B Fall...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
Student Name: Kiril Ravnachki BUS 208 B Fall 2008, AUBG HOMEWORK N. 1 (Chapters 1 and 2) Part I. Questions (15 points) What is one major difference between financial and managerial accounting? Managerial accounting provides information to the internal decision makers. Financial accounting develops reports for the external decision makers. What is a business transaction ? A business transaction is an economic event that affects the financial position of a business entity. What does a trial balance prove? Trail balance is used to prove that the amount debited is equal to the amount credited. List one advantage of the corporate form of business entity. An advantage of a corporate form of business entity is that stockholders’ risk of loss is limited to the amount they paid for their shares. What is the textbook definition of assets? Assets are economic resources owned by a business that are expected to benefit future operations. Are debits always good for the company? Why or why not? Give an example. Let us consider an example. A company debits huge amounts in its Withdrawals and Expense accounts. This means that the owner’s equity decreases, which respectively decreases the net assets. So this means that debits are not always good for the company. 1
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
+ Withdrawals -- b.b. 0 10,000 10,000 -- Owner’s Equity + b.b. 0 10,000 10,000 What accounting system do publicly traded (listed) European Union companies have to adhere to? International Financial Reporting Standards or IFRS. Place the + and – signs where they belong: Accounts Payable Inventory Cash Accounts Receivable -- + + -- + -- + -- Withdrawals Salary Expenses Unearned Revenue Consulting Revenue + -- + -- -- + -- + 2
Background image of page 2
Part II. Journal entries (15 points)
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 12/10/2009 for the course BUS 311 taught by Professor Fas during the Spring '09 term at American University in Bulgaria.

Page1 / 6

Homework_1 - Student Name: Kiril Ravnachki BUS 208 B Fall...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online