Financial Accounting Week 2

Receipts or increases in cash

• Source

• Use

• WT$

• Liability

Spending or a decrease in cash

• Asset

• WT$

• Use

• Source

Tells you how well you are operating your event business on a day-to-day basis

• Income Statement

• Balance Sheet

• Statement of Retained Earnings

• Expenses

Assets = Liabilities + Owner's Equity

• Income Statement

• Statement of Retained Earnings

• Statement of Cash Flows

• Balance Sheet

An owner's personal expenses should be kept separate from the business

• Full Disclosure Principle

• Business Entity Principle

• Going Concern Principle

• Accrual Accounting

A business is a going concern if it does not plan to go bankrupt and liquidate its assets

• True

• False

Records revenue before payment is received

• Accrual Accounting

• Cash Accounting

Records revenue only when the cash is received

• Accrual Accounting

• Managerial Accounting

• Financial Accounting

• Cash Accounting

If an event business paid $10,000 for a catering truck, but the catering truck was worth $15,000, how much is recorded in the books?

• $5,000

• $10,000

• $15,000

• $0