Accounting 201 Flash Cards- Test 1.pptx

Balance sheet assets liabilities shareholders equity

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Balance Sheet Assets = Liabilities + Shareholder’s Equity Assets- Cash, Equipment, Inventory, Receivables, Prepaids Liabilities- Obligations, Payables Shareholder’s Equity- Retained Earnings, Stock
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Statement of Cash Flows ONLY cash transactions involved in Operating, Investing, Financing
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Revenue Recognition Recognizing Revenue whether it’s been paid, or earned.
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Expense Recognition Recognizing expense whether it’s been placed on payable or if it was prepaid
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Historical Cost Accounting principle that states that companies should record assets at their cost
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Materiality Whether an item is large enough to likely influence the decision of an investor or creditor
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Monetary Unit An assumption that requires that only those things can be expressed in money are included in the accounting records
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Periodicity An assumption that the life of a business can be divided into artificial time periods and that useful reports covering those periods can be prepared for the business
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T-Accounts Account Title DR CR 1. If you purchase $3000 of Equipment on Note Payable. 2. If you pay $200 Cash on Note Payable
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Accounting Process Analyze Journalize Post to Ledger Trial Balance
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On January 31, you purchase $300 in supplies with cash. On January 31, you purchase $2000 on Note Payable.
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Closing Entries Closes out temporary accounts Only happens once a year
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