Acc 1-1 through 2-2 Review

Expenses incurred to provide a product or service should be recorded at the same time the related revenue for the sale of that product or service is recorded.

• Matching Principle

• Cost Principle

• Time Period Assumption

• Revenue Recognition Principle

Every purchase should be recorded based on its actual acquisition cost (or price).

• Revenue Recognition Principle

• Cost Principle

• Objectivity Principle

• Full Disclosure Principle

Assumes the same accounting methods are used across multiple accounting periods.

• Going Concern

• Time Period

• Economic Entity

• Consistency

Assumes all transactions represent business activities and are separate from the owner's personal accounting records.

• Economic Entity

• Going Concern

• Time Period

• Consistency

This method of accounting means that revenue and expenses are recognized recorded at the time they are earned or incurred, even if money doesn't change hands.

• Accrual Accounting Menthod

• Cash Accounting Method

What is an example of an asset?

• Accounts Payable

• Credit Card Balances

• Cash

• Owner's Equity

The financial claims on a company’s assets are called ___________, and are organized into two types of claims: liabilities and owner’s equity.

• Equitites

• Assets

• Tangibles

• Accounts Receivable

A(n) __________ is a debt or obligation owed to any other person or organization, oftentimes referred to as a creditor.

• Asset

• Liability

• Equity

• Equipment

In any business, the __________ of a company always have the first financial claim on the assets of a company.

• Customers

• Owners

• Creditors

• Investors

Which equation below is the accounting equation?

• Assets = Liabilities - Owners’ Equity

• Equity = Assets + Liabilities

• Assets = Owners’ Equity/Liabilities

• Assets = Liabilities + Owners’ Equity