Exam (elaborations)
Unit 1.0 Fundamentals of Accounting and Bookkeeping Exam With Complete Solutions
- Course
- Institution
Unit 1.0 Fundamentals of Accounting and Bookkeeping Exam With Complete Solutions
[Show more]
Content preview
Unit 1.0 Fundamentals of Accountingand Bookkeeping Exam With Complete
Solutions
Proprietorship / Sole Prop - -A business owned by one person. Simplest
structure and not separate from its owner for legal purposes
-Partnership - -Business owned by two or more persons, the owners are
called partners. Not a separate legal entity. Profit/Loss "Pass through" to
owners.
-Corporation - -Business organized as a separate legal entity
-Limited Liability Company "LLC" - -Separate Business and legal entity, but
choice of how it is taxed. LLCs are fairly new structures.
-10 Steps of Accounting Cycle - -1) Business transaction occur and source
documents are created
2) Analyze business transactions
3) record/Journalize the business transactions in the journals
4) Post the journals to general ledger accounts
5) Prepare a trial balance
6) Analyze the accounts, journalize and post adjusting entries
7) Prepare an adjusted trial balance
8) Prepare Financial Statemements
9) Journalize and post closing entries
10) Prepare a post-closing trial balance
-Accounting Transaction - -Business event that has a monetary impact, such
as selling goods to a customer or buying supplies from a vendor.
-Cash Account (definition) - -Current balance of cash held by a business,
usually in checking or savings accounts. ASSET / Debit balance
-Accounts Receivable (definition) - -Sales on credit, which customers must
pay for at a later date. ASSET / Debit balance
-Inventory (definition) - -This is items held in stock, for eventual sale to
customers. ASSET / Debit balance
-Fixed Assets (definition) - -More expensive assets that the business plans
to use for multiple years. ASSET / Debit balance
, -Accounts Payable (definition) - -Liabilities payable to suppliers that have
not yet been paid. LIABILITY / Credit balance
-Debt (definition) - -Cash loaned to the business by another party
-Equity (definition) - -Ownership interest in the business, which is the
founding capital and any subsequent profits that have bee retained in the
business. EQUITY / Credit balance
-Revenue (definition) - -Sales made to customers (both on credit and in
cash). REVENUE / Credit balance
-Cost of Goods Sold (definition) - -Cost of goods or services sold to
customers. EXPENSE / Debit balance
-Administrative Expenses (definition) - -These are a variety of expenses
required to run a business, such as salaries, rent, utilities, and office
supplies. EXPENSE . Debit balance
-Income taxes (definition) - -Taxes paid to the government on any income
earned by the business. LIABILITY (if accrued) / Credit balance or EXPENSE /
Debit balance
-Software Module Entries - -Forms in accounting software which populate
accounts for you, such as creating and invoice or recording a customer
invoice
-Journal Entries - -Customized way to record accounting information
-General Ledger - -Master set of all accounts. Stores all transactions that
have been entered via modules or journal entries. May have sub ledgers for
high-volume transactions such as sales or purchases.
-Balance Sheet - -Report which lists Assets, liabilities, and equity as of the
report date
-Income Statement - -Report which lists revenues, expenses, and profit or
loss for a specific period of time
-Statement of Cash Flows - -Report which lists the cash inflows and outflows
generated by the business for a specific period of time
-GAAP - -Generally Accepted Accounting Principles. An accounting
framework for how to record transactions. Most common framework used in
the United States
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Nursephil2023. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $8.49. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
79223 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now