Accounting Final Exam Review

Assets – anything of material value or usefulness
If the tax rate is t, it is possible to calculate planned operating income by:
a. dividing net operating income by t
b. dividing net operating income by 1- t
c. multiplying net operating income by t
d. multiplying net operating income by 1- t – b. dividing net operating income by 1- t
Monetary Unit Assumption – Principle that assumes transactions and events can be expressed in money units.
fixed cost – not affected by volume
secured bonds – specific assets pledged as security
accounting information and its internal users – -management needs to know the profitability of each division
-HR needs to know the effect of a four percent raise for all employees
-the finance department needs to know if there is enough cash to pay its expenses
debit – amount recorded on the left side
Sale on Account – a sale for which cash will be received at a later date
Ray Charles’ song “I Got a Woman” was historically important because:
accounting – planning recording analyizing and intrepting financial information.
intangible assets – lack physical substance and are not financial instruments (patents, copyrights, franchises, goodwill, trademarks, trade names, and customer lists)
expense – decrease in owner's equity resulting from the operation of a business
General journal – permanently record the effect of operations on Owner's Equity
The gross profit method can be used for all of the following reasons except
A. preparation of annual financial statements.
B. estimating inventory losses due to some casualty.
C. testing the reasonableness of the physical inventory count.
D. preparation of interim financial statements. – A
Payroll Register – A record of payroll information for each employee for the pay period.
Rаy Chаrles’ sоng “I Gоt а Wоman” was historically important because:
69. The balance sheet depicts which of the following equations?
A. Net income = revenue – expenses.
B. Ending retained earnings = beginning retained earnings + net income – dividends.
C. Assets = liabilities + stockholders' equity.
D. Net cash flows = total cash inflows – total cash outflows. – C. Assets = liabilities + stockholders' equity.
Current Assets – (cash, accts revievable, inventory) turn into cash within 12 months
Gross Profit Equation – Sales Revenue – Cost of Goods Sold = Gross Profit
"90" Screen- Be able to read and understand all aspects – • Accounts Receivable (RFS)
• What will hit our bad debt in 90 days if not collected

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