Financial Accounting Final

The steps in the accounting cycle for a merchandising company are the same as those in a service company except
A. an additional adjusting journal entry for inventory may be needed in a merchandising company.
B. closing journal entries are not required for a merchandising company.
C. a post-closing trial balance is not required for a merchandising company.
D. a multiple-step income statement is required for a merchandising company. – A
Gains – Increases in assets or decreases in liabilities from peripheral transactions.
FULL DISCLOSURE PRINCiPLE – All important aspects of bond indentures are presented in financial statements.
unadjusted trial balance – a list of accounts prepared before adjustments are recorded
Conversion costs:
a. include all the factors of production
b. include direct materials
c. in process costing are usually considered to be added evenly throughout the production process
d. Both b and c are correct. – c. in process costing are usually considered to be added evenly throughout the production process
price earnings ratio – stock price/earnings per share
Liability – an obligation to pay money to another party
Proving the ledger – adding all debit balances and all credit balances of ledger accounts and then comparing the two totals to see whether they are equal.
Paid Premium for Insurance policy – Prepaid Insurance: Cash.
P.P.I.: Increases.
Cash: Decreases.
Balance Sheet/
Plama fluid is a part of
Expanded accounting equation – Assets= liabilities+capital-withdrawals+revenue-expense
The FASB's conceptual framework is developed in a series of concept statements (collectively the Conceptual Framework). The conceptual framework has the following 3 levels: – a. First level: The objective of financial reporting, the "why" or purpose of accounting.
b. Second level: The qualitative characteristics and the elements, which form a bridge between the 1st and 3rd levels.
c. Third level: Recognition, measurement, and disclosure concepts, the "how" or implementation.
(on Financial statements)Earnings for the period – income statement
Plаmа fluid is а part оf
Unqualified, Adverse, Qualified, Disclaimer – What are the types of Audit Opinions? (4)

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