Accounting Concepts and Procedures Quiz

Accounting Concepts and Procedures

• Account Balances: Understanding normal account balances (increasing/decreasing) is crucial for determining account effects in journal entries.
• Financial Statement Classifications: Proper classification of accounts (e.g., assets, liabilities, equity, revenues, expenses) on the Income Statement, Retained Earnings Statement, and Balance Sheet is vital for clear financial reporting. Multiple-step Income statements are often required.
• Journal Entries and Financial Statement Effects: Students should be prepared to analyze and record journal entries, understanding how they impact each financial statement. This requires a comprehension of debit and credit rules.
• Adjusting Journal Entries: Recognizing and recording adjustments for prepaid expenses, supplies, unearned revenues, accrued revenues, accrued expenses, and depreciation is essential to properly reflect financial position and earnings.
• Prepaid Expenses: Prepaid expenses are assets that represent future expense obligations.
• Supplies: Supplies are an asset that provides benefit in future periods.
• Unearned Revenues: Unearned revenue is a liability representing cash received before services are performed.
• Accrued Revenues: Accrued revenues are revenues earned but not yet collected.
• Accrued Expenses: Accrued expenses are expenses incurred but not yet paid.
• Depreciation: Depreciation is the systematic allocation of the cost of a fixed asset over its useful life.
• Closing Entries: Understand the process of closing temporary accounts to permanent accounts (e.g., Revenue, Expense, Dividends).
• Merchandise Company Financial Statements: Study the preparation of financial statements (Multiple-Step Income Statement, Retained Earnings Statement, Classified Balance Sheet) for companies with merchandise inventory.
• Earnings Per Share (EPS): Learning to calculate EPS is necessary.
• Comprehensive Income: Understand how comprehensive income is calculated and presented, including Other Comprehensive Income (OCI) components and Accumulated Other Comprehensive Income (AOCI).
• Statement of Cash Flows - Operating Activities (Indirect Method): The indirect method begins with net income from the income statement. Then, adjustments are made to reconcile net income to net cash flow from operating activities.
• Statement of Cash Flows - Investing Activities: Analyze and prepare journal entries for investing activities such as purchase/sale of long-term assets.
• Statement of Cash Flows - Financing Activities: Understand financing activities like debt issuance/payment, stock issuance/repurchase, and dividend payments, and how these impact the statement.
• Statement of Cash Flows - Total Cash Flows: Accurately sum cash flows from operating, investing, and financing activities.
• Multiple Choice Questions: Practice answering multiple choice questions related to all covered topics.

Test your knowledge on essential accounting concepts such as normal account balances, financial statement classifications, and journal entries. This quiz covers the fundamentals needed to analyze financial statements effectively and understand the impact of adjusting journal entries on financial reporting.