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Define Accounting	Accounting is the process of recording all financial transaction regarding to a business. It is the process for summarizing, analyzing and reporting of business transactions . Accounting The information system that identifies, records, and communicates the economic events of an organization to interested users.
Accounting equation & definitions of each component	Accounting equation is Asset = Liabilities + Equity Asset - Assets are resources controlled by an entity as a result of past events and from which future economic benefits are expected to flow to the entity. Simply speaking, Assets are anything that a company has ownership on it. Liabilities - Liability is a present obligation of the entity arising from past events and the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits. It is what a company owes. Equity - Equity can be defined as the residual interest in the assets of the company after deducting all its liabilities. It is the amount of capital invested by the shareholders of the company.
3 forms of ownership	Sole Proprietorship Simple to establish Owner-controlled Tax advantages Partnership Simple to establish Shared control Broader skills and resources Tax advantages Corporation Easier to transfer ownership Easier to raise funds No personal liability
Net income formula and definitions of revenues and expenses	Net income = Total revenue Total expenses Revenues are generated Amounts earned from the sale of products and other sources Sales revenue, service revenue, interest revenue Expenses incurred to earn revenue Costs of assets consumed or services used Include cost of goods sold, selling, marketing, administrative, interest, and income taxes expense
3 things that affect retained earnings	i. Net Gain: Retained earnings increase when a business receives income, whether through profits gained by providing customers a service or a product or through capital stock investments. Retained earnings carry over from the previous year if they are not exhausted and continue to be added to retained earnings statements in the future. ii. Net Losses: Events that cause a net loss in a business's cash flow will decrease retained earnings. This is usually the result of paying the costs of doing business. Overhead expenses such as rent, payroll and purchasing goods or supplies to provide services or products to customers are all things that will reduce retained earnings. iii. Dividend Payments: Dividends are what allow stockholders to receive a return on their investment in the business through the receipt of company assets, often cash. This cash is paid out by the company to its stockholders on a date declared by the business's board of directors, but only if the company has sufficient retained earnings to make the dividend payments
Cash vs. Accrual basis; define revenue recognition and expense recognition	Accrual Basis: The transaction and revenue are recorded when earned and expenses are recorded when consumed. Cash Basis: The transaction and revenue are recorded when cash is received from customers. Expenses are recorded when cash is paid to suppliers and employees.
Balance sheet formula, retained earnings formula	Balance sheet formula Assets = Liabilities + Stockholders' Equity a. Ending Retained earnings = Beginning Retaiined earnings + Revenues - Expenses - Dividends Ending retained earnings = $700000 + $530000 - $300000 - $107000 Ending Retained earnings = $823000
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3 parts of the T-account & how to balance an account	1) the title of the account, 2) a left or debit side, and 3) a right or credit side
Liability classifications; list examples of each; define current & long-term liability
Current ratio calculation
Working capital	Difference between the amounts of current assets and current liabilities Calculated as Current Assets Current Liabilities
4 classification of assets; list examples for each category
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Natural balance of the 5 types of accounts (which accounts increase with a DR v. CR)
9 steps of the accounting cycle in order
Journalize the collection of revenue in advance
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Why do we make adjusting Entries	The purpose of adjusting entries is to convert cash transactions into the accrual accounting method. ... It typically relates to the balance sheet accounts for accumulated depreciation, allowance for doubtful accounts, accrued expenses, accrued income, prepaid expenses, deferred revenue, and unearned revenue.
Journalize adjustments; 4 types of adjusting entries
Closing entries
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Calculate gross profit
Journalize sale of inventory
What does FOB mean
What does this mean? 2/10, n/30
Multi-step income statement formula
Calculate payments of invoices with a discount & return
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Calculate ending inventory & COGS
2 types of inventory systems
Inventory valuation FIFO, LIFO & AVG cost; describe how to calculate
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Define internal control
Internal control procedures
Bank reconciliation steps
SOX	Sarbanes-Oxley Act (SOX) Regulations passed by Congress to reduce unethical corporate behavior.
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Difference between A/R and N/R
Calculate the amount of adjustment for writing off accounts
How to value A/R on the balance sheet
What kind of account is the allowance for doubtful accounts
Calculate maturity value & interest on notes receivable
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How do you get the cost basis of property plant & equipment
Calculate depreciation SL, units of activity and declining balance methods
Define intangible assets
Calculate book value
Calculate gains and losses on sale of plant asset
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Calculate interest on note Payable
2 classifications of liabilities
Bond characteristics
Calculate proceeds from issuance of bonds
Amortize bond premium & Discounts
Calculate gains & losses from bond redemption
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SE calculation
Define dividends
Stock characteristics
Calculate dividends based on stock characteristics
Journalize entries for Dividends
3 terms for number of shares of stock
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3 activities for cash flow & what goes in each
4 adjustments to Net Income (indirect method