ACG 5026 Q&A Bundle

Assets resources that are expected to provide a company with future economic benefits Expenditures that are not capitalized are expensed on the income statement Capitalized will be accounted for on the balance sheet as an asset Expensed it is added on the income statement and subtracted from reve...

Earned and realized or realizable revenue recognition requires that revenue be recognized (recorded) only when: Economic entity The activities of a business are considered to be independent and distinct from those of its owners or from other companies Materiality Refers to whether or not a particu...

Discuss the general uses of accounting and who uses it -The process of recording, summarizing and analyzing financial transactions. -Financial is mainly for decision makers outside the company(GAAP, Historic, summarized) -Managerial is mainly for decision makers within the company (no GAAP, Future, ...

Tangible Assets -Have physical substance -Usually include land, buildings, machinery, fixtures and equipment Intangible Assets -Have no physical substance -Provide the owner with specific rights and privileges -Include trademarks, patents, copyrights Three common depreciation methods -Straight-lin...

Order in Preparing Financial Statements 1. Income Statement 2. Statement of Stockholder's Equity 3. Balance Sheet 4. Statement of Cash Flows Accounting Cycle 1. Analyze 2. Record 3. Adjust 4. Report 5. Close Recording Process Analyzing Journalizing Posting Characteristics ...

What are the two general kinds of accounting? What are the uses of them? Financial: --> outside users to determine financial health and firm profitability Managerial: --> inside users to examine internal processes/products to evaluate managment/current operations What is accounting? The proc...

Balance Sheet A financial statement that reports assets, liabilities, and owner's equity on a specific date/at a point in time. Lists the company's investments and sources of financing using the accounting equation § Assets=liabilities+equity § Statement of financial position Statement of Cash...

Three general uses of accounting 1. Financial reporting and external performance evaluations 2. Managerial decision making 3. Managerial planning, control & internal performance evaluations Economic role of financial reporting * Investors and creditors need numbers to monitor compensation contracts...

Three general uses of accounting Financial reporting and external performance evaluations Managerial decision making Managerial planning, control & internal performance evaluations Corporate Advantages Limited liability Ability to raise capital Ability to separate ownership from management Tra...

Distinguish between tangible and intangible assets -tangible assets have physical substance (examples: land, buildings, machinery, fixtures and equipment) depreciate all tangible assets except land -intangible assets have no physical substance (examples: trademarks, patents, copyrights) provide the ...

Identify and account for leases (operating and capital) A lease is a contract between an owner of an asset and a party desiring to use the asset. Lessor- the owner of an asset, lessee- the party desiring to use the asset. Advantages- often requires less equity investment, payments may be structured ...