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Glossary of Acc 153 - Chapter 1 Test

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Purpose of Accounting
To provide useful information to users outside of the firm.
Four Types of Financial standard statements
Income, Retained Earnings, Balance Sheet, Cash Flows
Net Income
Revenue-Expenses
Classify This as Asset, Liability, Expense, Revenue: Cash
Asset
Classify This as Asset, Liability, Expense, Revenue: Accounts Payable
Liability
Classify This as Asset, Liability, Expense, Revenue: Inventory
Asset
Classify This as Asset, Liability, Expense, Revenue: Accounts Recievable
Asset
Classify This as Asset, Liability, Expense, Revenue: Supplies
Asset
Classify This as Asset, Liability, Expense, Revenue: Equipment
Asset
Classify This as Asset, Liability, Expense, Revenue: Salaries payable
Liability
Classify This as Asset, Liability, Expense, Revenue: Service Revenue
Revenue
Classify This as Asset, Liability, Expense, Revenue: Rent Expense
Expense
Classify This as Asset, Liability, Expense, Revenue: Common Stock
Owner's Equity/Stockholders' Equity
Statement of Retained Earnings shows what
Beginning balance of retained earnings, with net income added into it and dividends subtracted
Income Statement shows what
All revenue and all expenses, and then net income
Balance sheet shows what
assets, liabilities, owners' equity.
Within stockholders' equity, there are
common stock and retained earnings
Three main types of businesses
Sole Prop., partnership, corporation
Net income belongs in what account on the balance sheet?
Retained earnings (Within owners' equity)
Accural basis of accounting
We recognize revenue/expenses when earned/incurred
GAAP
Generally Accepted Accounting Princples
What act established the SEC
Congress passed the Securities Act of 1933, which established the SEC, but they forgot to appoint people. Congress then passed the securities act of 1934 that actually established the SEC

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