Study Review for Exam 1 for Accounting Compariable Reliable Terms from Chapter 1 Organizations Benefits of each Accounting Equations What Increases decreases Accounts debits credits Revenue what you earn for your service and not recorded until the cash is earned Revenue have a credit account Using algebra to solve accounting equation What is retained earning How do we calculate it Dividends are not an expense Which one is for a period of time or specific date Income Statement period of time Balance Sheet is a set date December 31 Statement of Retained Earning goes to the balance sheet know the different types of accounts Know the order of the statement 1 Income Statement net income carries over 2 Retained Earning Ending Retained earning carries over 3 Balance Sheet Ending Cash carries over 4 Cash Flow Know the types of Assets Liabilities Stockholders Equities Unearned Revenue Journal entry for buying on account Account receivable Transaction that affect net income When customer pays off the expens the asset increase Don t record expense until they are accrued Cash dividends how affects equation contra equity account Cash goes down Equity goes down Debt dividend Credit cash Know what Normal balance affects Prepaid Expenses and what are accured Know what trial balances are and what they are used for Takes Ending balance all debits credits form the T account Purchase Supplies account How affect accounting equation Know the different closing entries Use T account to solve for the unknown Accumulated Expenses Increase by 1000 debit Plant assets computers equipment Historical cost How much you will pay for the item Accumulated depreciation contra asset account Increase with debit Know how its recorded Unearned Revenue Temporary Entries Know what liquidity is and what order they go in balance sheet Permanent Entries Cash Accounts Receivable Inventory Long term building computer car Current and debit ratios Higher vs Lower How to calculate Purpose of Internal Control Limitations of Internal control Bank Reconciliation NSF Checks asset would stay the same Bank Errors Book Error Decrease cash Increase Receivables Budget purpose Managers Controls of cash Cash receipts Internal control procedures Who is responsible for company risks Framework for ethical know the four different ones
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