Business 100 Final Exam

Business 100 Final Exam - Business 100 Midterm Exam #1...

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Unformatted text preview: Business 100 Midterm Exam #1 20/02/2010 12:14:00 Background Info Business 100 External Audiences Luca Pacioli (1494) Father of Accounting double entry bookkeeping Big Four o Deloitte o Ernst & Young o KPMG o Price Water House Coopers SEC Securities and Exchange Commission o Make rules with respect to accounting FASB Financial Accounting Standards Board o Has been given power by SEC o Formulates GAAP GAAP Generally Accepted Accounting Procedures o Accountants Bible IRS Internal Revenue Service o Tax rules IFRS Internationally Financial Reporting Standards o SEC wants to have US following this o Chapter 1 20/02/2010 12:14:00 Chapter 1-The Financial Statements Types of Businesses o Proprietorship Has a single owner Proprietor is personally responsible for all the businesss debts o Partnership 2 or more persons as co-owners and each owner is a partner each partner is responsible for all the partnerships debts this caused the formation of LLPs o Limited-Liability Company (LLC) The business and not the owner is responsible for the companys debts They pay no business tax, members just pay income tax o Corporation Business owned by stockholders A corporation is legally distinct from its owners Stockholders have no personal responsibility for the corporations debts Accounting Principals & Concepts o Entity Concept Any organization that stands apart as a separate economic unit o Reliability Principle (objectivity principle) Ensures that accounting records and statements are based on the most reliable data available o Cost Principle Assets and services should be recorded at their actual historical cost o Going-Concern Concept Assumes that the entity will remain in operation long enough to use existing assets for their intended purpose o Stable-Monetary-Unit Concept Accountants assume that the dollars purchasing power is stable The Accounting Equation o Assetss = Liabilites + Common Stock + Retained Earnings o Dividends The Financial Statements o Income Statement How well the company performed that year Gives Net Income Net Income = Revenues Expenses Example: Company Statement of Income (Period) Ended o Statement of Retained Earnings What a company did with its Net Income Example: Company Statement of Retained Earnings (Period) Ended Balance, Beginning of year o Plus Net Income o Minus Dividends Balance, End of year o Balance Sheet Measures financial position Its the accounting equation Example:...
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This document was uploaded on 11/04/2011 for the course BUSI 100 at UNC.

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Business 100 Final Exam - Business 100 Midterm Exam #1...

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