Intro. Accounting Chp.1+2 Test Review

Front 1

What is a buisness stakeholder?

Back 1

A person or entity that has an interest in the economic performance and well-being of a business. EX. Stockholders, suppliers, customers, and employes.

Front 2

(Types of Business Stakeholders)
Capital market stakeholders-

Back 2

Provide the major financing for a business in order for it to begin and continue its operations. Examples on pg. 8-9.

Front 3

(Types of Business Stakeholders)
Product or service market stakeholders-

Back 3

Customers who purchase the business's products or services as well as the vendors who supply inputs to the business. Ex. on pg. 9.

Front 4

(Types of Business Stakeholders)
Government stakeholders-

Back 4

Cities, counties, states, and federal governments that collect taxes and fees from the business and its employees. Better a business does, the more taxes that can be collected. Other EX. pg. 9.

Front 5

(Types of Business Stakeholders)
Internal stakeholders-

Back 5

Individuals employed by the business. EX. pg. 9.

Front 6

Business Activities

Back 6

All businesses are engaged in these. They include Financing, investing, and operating.

Front 7

(Business Activities)
Financing activities-

Back 7

Involve obtaining funds to begin and operate a business. Pg. 11. Look for example to use.

Front 8

(Business Activities)
Investing Activites-

Back 8

Used to obtain the necessary assets to start and operate the business. Pg. 12. Look for example to use.

Front 9

(Business Activities)
Operating Activities-

Back 9

Used to implement its business emphasis. Pg. 12. Look for example to use.

Front 10

What are the four types of financial statements? Pg. 14.

Back 10

Income statement, Retained earnings statement, Balance sheet, and Statement of cash flows. Normally prepared in that order.

Front 11

(Financial statements)
Income statement-
More on Pg. 15

Back 11

A summary of the revenue and the expenses for a specific period of time, such as a month or a year. (Reports change in financial condition.)

Front 12

(Financial statements)
Retained earnings statement-
More on Pg. 16

Back 12

A summary of the changes in the earnings retained in the corporation for a specific period of time, such as a month or a year. (Reports change in financial condition)

Front 13

(Financial statements)
Balance sheet-
More on Pg. 17

Back 13

A list of the assets, liabilities, and stockholders' equity as of a specific date, usually at the close of the last day of a month or a year. (Reports financial condition.)

Front 14

(Financial statements)
Statement of cash flows-
More on Pg. 18

Back 14

A summary of the cash receipts and cash payments for a specific period of time, such as a month or a year. (Reports change in financial condition.)

Front 15

Horizontal analysis

Back 15

A method of analyzing financial performance that computes percentage increases and decreases in related items in comparative financial statements. Compares each item on the most recent financial statement withthe related item on one or more earlier statements. The amount of the increase or decrease in each item is shown along with the percent increase or decrease.

Front 16

Accounting Concepts
Pg. 20-23

Back 16

Consists of: Business Entity, Cost, Going Concern, Matching, Objectivity, Unit of Measure, Adequate Disclosure, and Accounting Period Concepts.

Front 17

(Accounting Concepts)
Business Entity Concept-

Back 17

A concept of accounting that limits the economic data in the accounting system to data related directly to the activities of a specific business or entity.

Front 18

(Accounting Concepts)
Cost Concept-

Back 18

A concept of accounting that determines the amount initially entered into the accounting records for purchases.

Front 19

(Accounting Concepts)
Going Concern Concept-

Back 19

A concept of accounting that assumes a business will continue operating for an indefinite period of time.

Front 20

(Accounting Concepts)
Matching Concept-

Back 20

A concept of accounting in which expenses are matched with the revenue generated during a period by those expenses.

Front 21

(Accounting Concepts)
Objectivity Concept-

Back 21

A concept of accounting that requires accounting records and the data reported in financial statements to be based on objective evidence.

Front 22

(Accounting Concepts)
Unit of Measure Concept-

Back 22

A concept of accounting requiring that economic data be recorded in dollars.

Front 23

(Accounting Concepts)
Adequate Disclosure Concept-

Back 23

A concept of accounting that requires that the financial statements include all relevant data a reader needs to understand the financial condition and performance of a business.

Front 24

(Accounting Concepts)
Accounting Period Concept-

Back 24

A concept of accounting in which accounting data are recorded and summarized in a periodic process.

Front 25

(Impact of various transactions on stockholders’ equity)Chp.2 Pg.61-62
Stockholders' investments-

Back 25

Increase in Capital Stock, which is an increase in Stockholders' Equity.

Front 26

(Impact of various transactions on stockholders’ equity)Chp.2 Pg.61-62
Revenues-

Back 26

Increase Retained Earnings, which is an increase in Stockholders' Equity.

Front 27

(Impact of various transactions on stockholders’ equity)Chp.2 Pg.61-62
Expenses-

Back 27

Decrease in Retained Earnings, which is a decrease in Stockholders' Equity.

Front 28

(Impact of various transactions on stockholders’ equity)Chp.2 Pg.61-62
Dividends-

Back 28

Decrease in Retained Earnings, which is a decrease in Stockholders' Equity.

Front 29

Vertical Analysis
Chp.2 Pg.69-71

Back 29

A method of analyzing comparative financial statements in which percentages are computed for each item within a statement to a total within the statement. These percentages can then be compared across years.