Financial Accounting Test One Set Two

Front 1

the financial statement showing the financial position of an enterprise by summarizing its assets, liabilities, and owner's equity at a point in time. Also called the statement of financial posistion

Back 1

balance sheet

Front 2

Economic resources owned by an entity

Back 2

assets

Front 3

The widely used principle of accounting for assets at their original cost to the current owner.

Back 3

cost principle

Front 4

Debts or obligations of an entity that resulted from past transactions. They represent the claims of creditors on the enterprise's assets.

Back 4

liabilities

Front 5

the excess of assets over liabilities. the amount of the owners investment in the business, plus profits from successful operations that have been retained in the business.

Back 5

owners equity

Front 6

What increases owner's equity?

Back 6

investments of cash or other assets by owners and earnings from profitable operation of the business

Front 7

what decreases owner's equity?

Back 7

payments of cash or transfers of other assets to owners and losses from unprofitable operation of business

Front 8

assets are equal to the sum of liabilities plus owner's equity

Back 8

accounting equation

Front 9

an activity statement that subtracts from the enterprise's revenue those expenses required to generate the revenues, resulting in a net income or a net loss.

Back 9

income statement

Front 10

An activity statement that explains the enterprise's change in cash in terms of its operating, investing, and financing activities.

Back 10

statement of cash flows

Front 11

What are some forms of business organization

Back 11

sole proprietorships, partnerships, corporations.

Front 12

an unincorporated business owned by one person.

Back 12

sole proprietorship

Front 13

an unincorporated business owned by two or moer persons voluntarily acting as partners (co owners)

Back 13

partnership

Front 14

a type of business organization that is recognized under the law as an entity separate from its owners.

Back 14

corporation

Front 15

users of financial statements are informed of any facts necessary for the proper interpretation of teh statements.

Back 15

adequate disclosure