Chp1. Q1 – What are the four basic financial statements and what do they tell you about a company? What is the primary purpose of each of the four basic financial statements? In your opinion, which financial statement is the most important? Explain why. How the four basic financial statements are interrelated?
Chp1. Q2 – List some examples of internal or external users of financial statements. Pick one and describe how that person or department would use a specific financial statement. You can also share an example from your work experience.
Chp1. Q3 – The Balance Sheet is made up of Assets, Liabilities and Equity accounts. The Balance Sheet follows the Accounting Equation: Assets = Liabilities + Owners’ Equity. Can you provide some examples of Asset, Liability and Equity accounts?
Chp 2. Q4 – Financial reporting follows a set of accounting standards known as U.S. GAAP (Generally Accepted Accounting Principles.) Under GAAP, there are important Principles/Assumptions that are used: Economic Entity Assumption, Monetary Unit Assumption, Time Period Assumption, Cost Principle, Full Disclosure Principle, Going Concern Principle, Matching Principle, Revenue Recognition Principle, Materiality, Conservatism, Consistency, Comparability, and Reliable Verifiable and Objective. Describe one of the principles/assumptions and explain why it is important for all companies who follow U.S. GAAP.
Chp 3. Q5 – What do you think of when you hear the word debit? What do you think of when you hear the word credit?
When we speak about debits and credits in accounting, we are not referring to debit cards, credit cards or the debits and credits found on your personal bank statement
What does our textbook say about debits and credits? Suppose a company earns $200 in services revenue. In this transaction, cash increases and services revenue increases. How would you journalize this transaction?
Answers can be up to 50-70…