1. Why must Total Asset be equal to Total Liability + Equity on the Balance Sheet?

2. Describe the meanings and examples of the following Asset accounts on the Balance Sheet.

a. Accounts Receivable

b. Inventory

c. Prepaid Expense

d. Property, Plant, and Equipment

e. Accumulated Depreciation

3. Describe the meanings and examples of the following Liability accounts on the Balance Sheet.

a. Accounts Payable

b. Accrued Liability (Accrue Expense)

c. Unearned Revenue

d. Bond Payable

4. Describe the meanings and examples of the following Equity accounts on the Balance Sheet.

a. Common Stock

b. Preferred Stock

c. Additional Paid In Capital

d. Retained Earnings

e. Treasury Stock.

5. Describe the meanings and examples of the following items on the Income Statement.

a. Sales

b. Cost of Goods Sold

c. Operating Expenses

d. Other Revenue and Gain

e. Other Expense and Loss

6. Explain the components of Cash Flow Statement and the purpose of the statement.

7. Explain the components of Retained Earnings Statement and the purpose of the statement.

8. Describe the relationships between Balance Sheet, Income Statement, Retained Earning Statement, and Cash flow Statements.

9. What is the Journal Entry? Explain the Journal Entry rules.

10. Explain each step on the Financial Reporting Cycle.