HAND OUT FOR PREPARING FOR PART A
I. Financial Accounting
1) Cost, full disclosure, and matching are three of the basic accounting _________.
2) The FASB is responsible for developing new accounting _____________, which will become part of GAAP.
3) GAAP is the acronym for generally ___________ accounting principles.
4) Large companies must use the _________-basis of accounting, rather than the cash-basis of accounting.
5) A corporation 's annual report to the SEC is the Form _______-K.
6) The difference between the amounts of assets and liabilities is stockholders ' __________.
7) The balance sheet is also referred to as the statement of financial __________.
8) If a corporation 's stock is _________-traded, it will
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10) Accrual accounting is associated with this principle.
V. Adjusting Entries
1) Customer deposits for future services will be listed under which financial statement category? (assets, liabilities, expenses, etc.)
2) The accounting principle that requires expenses to be reported on the income statement when they occur rather than when they are paid.
3) A prepaid expense is reported as which type of account? (asset, liability, expense, etc.)
4) Depreciation is the systematic ________________ of the cost of an asset (used in a business) to expense over the useful life of the asset. (It is not a valuation technique.)
5) The time _________ assumption is also known as the periodicity assumption. It means that an ongoing business can be divided into years, quarters, months, etc.
6) On December 1 a company purchased $700 of supplies—approximately a three-month supply. On December 1 the asset Supplies was debited for $700. On December 31 the company needs to prepare a prepayment-type ___________ entry.
7) Adjusting entries are used to convert accounting information from the cash basis of accounting to the ______________ basis of accounting.
8) The typical number of accounts involved in an adjusting entry.
9) An adjusting entry to recognize that part of a customer 's prepayment has been earned will include a __________ to a liability account.
10) The accrued
b. Describe what it means for a business to "recognize" revenues. What specific accounts and financial statements are
The FASB Accounting Standards Codification® is the source of authoritative generally accepted accounting principles (GAAP) recognized by the FASB to be applied by nongovernmental entities.
1. A company’s ending accounts receivable balance and the period’s advertising expense would be found on which financial statements, respectively
1. For the year-end December 31, 2007, financial statements, what amount should M record as a liability?
3. On the basis of the responses to Question 1 and 2, what are the units of accounting in this arrangement?
5. Prepare any necessary adjusting entries to reflect the Inventory count at year end. These must be hand written.
Classify each of the items as an asset, liability; revenue; or expense from the company's viewpoint. Also indicate the normal account balance of each item.
(b) Mark Paxson maintains that the statement of cash flows is an optional financial statement. Do you agree? Explain.
Question 3: Describe and show the journal entries illustrating how the company accounts for the transfer of its accounts receivable to financial institutions. Is this accounting treatment reasonable? What are the key assumptions made under this approach? Do you agree with these assumptions?
b. Trace the line item “Balance per Bank Statement” – Accuracy and Existence (AU-C 315.A114 a-iii, b-i)
b. Describe what it means for a business to "recognize" revenues. What specific accounts and financial statements are
1. Discuss methods (Accounting Policies) your chosen company uses to account for its various items of assets, liabilities, and shareholder equity:
In this assignment paper, I would like to describe the meaning of accounting, how accounting
Accounting is the art of measuring and communicating financial information. To maintain uniformity and consistency in preparing and maintaining books of accounts, certain rules or principles have been evolved. These rules or principles are classified as concepts and conventions. One of the important concept in accounting is “Measurement” (Mattessich, 1977)