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This 4 page Class Notes was uploaded by Bo Yang on Wednesday February 11, 2015. The Class Notes belongs to a course at Kansas taught by a professor in Fall. Since its upload, it has received 14 views.
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Date Created: 02/11/15
Yang Review of Exam 1 Contents 1 3 types of Business Entities 2 Accounting function 3 Ratio Function 4 T account 5 The steps for the cash flowaimed to test onereay important 6 Category cash flow statement to O I F 7 Definition of Term Yang 1 3 types of Business Entities Advantage easy to form and dissolve Proprietorship owner is the boss Disadvantage dif cult to raise capital No diversity of talent Owned by single individual Advantage more than one ownerspread risk Partnership easy to form and dissolve Two or more owners Disadvantage must split the pro t Slight more reporting requirements Advantage easier to raise capital Corporation lt typically professional management More proprietorship and partnerships Disadvantage more dif cult to formdissolve Considerable regulation and reporting 2 Accounting function ll 11 3 Ratio Function Current Ratio CACL Quick Ratio Cash Net current Receivable Shortterm investment CL Working Capital CA CL Debt Ratio Total LTotal A 4 T account Debit Credit Assets increase decrease LiabilitiesOwners Equity decrease increase Yang 3 Assets Cash liabilities Accounts Payable Equity Common Stock Accounts Receivable Notes Payable Retained Earnings Supplies Unearned Revenue Dividends Prepaid Insurance Wages Payable Revenue Prepaid XX Interest Payable Rent Expense Land XX Payable Supplies Expense Equipment Insurance Expense Accumulated Depreciation Depreciation Expense Building Wage Expense Accumulated Depreciation Expense and dividends always on debit side revenue on credit side 5 The steps for the cash flowaimed to test onereally important 1 Read problems especially the income statement amp other info Record other info amp income statementrevenue and expense Do the other side of each revenue and expense when record them Close revenues and expenses to income summary Close income summary to retained earning Close retained earning to cash Reconcile all balance sheet accounts ICDU IPOON 6 Category cash flow statement to O I F Operation 1income 2payment to suppliers employees tax collectors Investment 1Purchase or sales of land equipment machinery 2Lending money for getting more money Financial 1Common stock 2dividends 3borrowing money 4debts 7 Definition of Term SECSecurity and Exchange Commission which is legislation to regulate the sales of any type of investment FASBFinanciaI Accounting Standards Board Accounting standard in USA ASBInternationaI Accounting Standards Board International Accounting standard GAAPGeneraIIy Accepted Accounting principles Accounting Rules in USA FRSInternationaI financial reporting standards IGAAP CPACertified Public Accountant people who check the information provided by the company Posting Transfer Journal to Ledger Historical cost valuing stuff according to the historical valueUS GAAP Current cost valuing stuff according to the future valueMark to Market Chart of Accounts list of the accounts used by company General journal record of both the debits and credits associated with each specific transaction kept in chronological order Journal reference page number where the entry cam from Yang 4 Contraaccounts when the accounts have the opposite normal balance Book value net value for each entry Temporary accounts Starting next period is a whole bunch of accountsnonzero Permanent accounts are cumulative in the nature and need to be maintained to next period Liquidity how rapidly an asset can be converted to cash or how soon a liability will have to be satisfied Report format balance sheet lists assets on top of liabilities and equity Account format balance sheet lists side by side
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