Balance Sheet format – answer Assets=Liba. Total Stockholder's Equity
Statement of Retained Earnings format - answer Beg. Bal. in RE+NI-Dividends=End
Bal. in RE
What is the connecting link between the income statement and the balance sheet? -
answer Statement of Retained Earnings
What order must you PREPARE (not present) the financial statements? - answer1)
Income Statement 2) Statement of Retained Earnings 3) Balance Sheet
Why must you prepare the financial statements in a certain order? - answer Because
Net Income is needed in order to prepare the Statement of Retained Earnings, and
ending balance of RE is needed to prepare the Balance Sheet
Common Stock (or Capital Stock) - answerStockholder's Equity
Retained Earnings - answerStockholder's Equity
For all asset, expense, and dividends accounts, the account balance is increased on the
_______ side. For all other accounts, the balance is increased on the _______ side. -
answerDebit; Credit
The goal of accounting is to provide information that will be ___________________. -
answeruseful in making decisions
Financial accounting provides information to _____ - answerexternal users
Managerial accounting provides information to ____ - answercompany management
(internal users)
Shows the result of operations (profitability) for a period of time - answerIncome
Statement
Shows changes in the equity accounts for a period of time - answerThe Statement of
Retained Earnings
Shows the financial position at a point in time. Shows Assets = Liabilities + Owners'
Equity - answerBalance Sheet
Assets = Liabilities + Owners' Equity is known as the - answeraccounting equation
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