ACC Chapter 2

What are specific events that have a financial impact on a company that can be reliably measured?

Every transaction has 2 sides. What are they?

A record of each asset, liability, and stockholders' equity element that includes revenues, expenses, and dividends

An account is a basic summary device composed of how many elements?

What are the elements of an account

Economic resources that provide a future benefit

includes all currency, bank account balances, CDs, and checks

promise for future colleciton of cash from the sale of goods or providing services

written promise for future cash collection, includes principle amount and interest

goods a company sells to customers to generate revenue

expenses paid in advance

What are specific events that have a financial impact on a company that can be reliably measured?

What are specific events that have a financial impact on a company that can be reliably measured?

signed promises to pay a future amount

liabilities for expenses incurred but not yet paid

a liability created when a company receives cash from a customer in advance of providing a good or service; ex: when a company reveives cash and issues a gift card

owner claims to a company's assets

owner investment in the corporation in exchange for stock

cumulative earnings kept (retained) by the company and not paid out through dividends

The pattern of recording transactions is based on

Each transaction affects at least _____ accounts

What effect does this have? Purchased photography supplies for cash.

What effect does this have? Paid monthly rent (as it came due)

What effect does this have? Provided developing services and received cash.

What effect does this have? Paid employee salary (as it came due)

What effect does this have? Repaired an old photograph for a customer and billed them for the service.

What effect does this have? Paid the balance of the account for the lab equipment.

What effect does this have? Collected for the photograph repair done earlier in the month.

What effect does this have? Paid a dividend to the owner.

What effect does this have? Purchased additional darkroom equipment paying part down and borrowing the remainder from the bank.

What 2 types of activities will increase stockholders' equity?

What 2 types of activities will decrease stockholders' equity?

A chronological record of transactions

First step to a journal

Second step to a journal

Third step to a journal

a grouping of all the accounts and their balances

copying information from the journal to the ledger

Lists all the accounts with their ending balances

in a trial balance, what is the order of accounts listed?

when is a trial balance prepared?

what does a trial balance facilitate?

what is the order of financial statments?