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Questions and Answers

What is the total amount Data Care has purchased from Acme Supply Company?

  • $1,800
  • $1,200
  • $1,600 (correct)
  • $2,000

What type of supplies did Data Care purchase from Acme Supply Company?

  • Computer paper and other supplies (correct)
  • Furniture
  • Stationery only
  • Office electronics

When is Data Care expected to pay their bill to Acme Supply Company?

  • In September
  • In July
  • In October (correct)
  • In December

How long are the supplies expected to last for Data Care?

<p>Several months (B)</p> Signup and view all the answers

Which company supplies the computer paper and other supplies to Data Care?

<p>Acme Supply Company (C)</p> Signup and view all the answers

What was the net cash provided by operating activities for the month ended September 30, 2022?

<p>$1,350 (D)</p> Signup and view all the answers

What is the total liabilities and owner’s equity as reported?

<p>$18,050 (C)</p> Signup and view all the answers

Which of the following represents the cash at the end of the period?

<p>$8,050 (D)</p> Signup and view all the answers

What was the amount of cash invested by the owner during the month?

<p>$15,000 (C)</p> Signup and view all the answers

How much cash was used for purchasing equipment?

<p>$7,000 (A)</p> Signup and view all the answers

What are the segments called that are used to report on the periodic progress of an entity?

<p>Accounting periods (B)</p> Signup and view all the answers

Why are accounting periods considered arbitrary?

<p>They can vary in length depending on the company's fiscal policies. (C)</p> Signup and view all the answers

What is the purpose of dividing an entity's life into accounting periods?

<p>To report on periodic progress over time. (C)</p> Signup and view all the answers

Which statement best describes the characteristics of accounting periods?

<p>They are of equal length and serve reporting needs. (A)</p> Signup and view all the answers

What can be a consequence of not using accounting periods in reporting?

<p>Loss of track of financial performance over time. (B)</p> Signup and view all the answers

What is the value of the largest option presented?

<p>$100,000 (C)</p> Signup and view all the answers

What is the effect of collecting a $500 Accounts Receivable?

<p>Increases an asset $500; decreases an asset $500. (A)</p> Signup and view all the answers

Which option reflects an amount that is less than $90,000?

<p>$85,000 (B)</p> Signup and view all the answers

What is the primary purpose of a statement of cash flows?

<p>To provide information on cash receipts and payments for a specific period (C)</p> Signup and view all the answers

Which of the following does the statement of cash flows NOT directly report?

<p>Total assets at year end (A)</p> Signup and view all the answers

What is the total increase in assets when a $500 Accounts Receivable is collected?

<p>$500 increase (B)</p> Signup and view all the answers

Which of the following does NOT occur when collecting an Accounts Receivable?

<p>A liability increases. (B)</p> Signup and view all the answers

In what type of report would you find details about cash payments made during a financial period?

<p>Statement of cash flows (B)</p> Signup and view all the answers

Which component is not included in the statement of cash flows?

<p>Shareholder equity changes (D)</p> Signup and view all the answers

What type of information does the statement of cash flows emphasize?

<p>Cash transactions during the reporting period (B)</p> Signup and view all the answers

What formula represents the basic accounting equation?

<p>Assets = Liabilities + Owner’s Equity (B)</p> Signup and view all the answers

Which of the following components is NOT part of the owner's equity?

<p>Accounts Payable (D)</p> Signup and view all the answers

Which financial statement details the revenues and expenses of a business?

<p>Income Statement (B)</p> Signup and view all the answers

In the owner's equity section, which component reduces the owner's equity?

<p>Drawings (D)</p> Signup and view all the answers

What is the relationship between assets, liabilities, and owner's equity at a specific date?

<p>Owner's equity is the difference between assets and liabilities. (C)</p> Signup and view all the answers

Flashcards

Purchase amount

Data Care bought $1,600 worth of supplies.

Supplier

Acme Supply Company provided the supplies.

Payment terms

Data Care will pay later, in October.

Supply type

Computer paper and other office supplies.

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Expected duration

The supplies are expected to last months.

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Statement of Cash Flows

A financial statement that summarizes the movement of cash both into and out of a business over a specific period.

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Net Increase in cash

The overall change in cash balance during a specific period, calculated by summing cash flows from operating, investing, and financing activities.

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Cash flows from operating activities

Cash inflows and outflows directly related to the main business operations such as revenue collection and expense payments.

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Investing Activities

Cash flows related to long-term assets, such as purchasing equipment or property.

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Financing Activities

Cash inflows and outflows related to how the business is funded, like owner investments or withdrawals.

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Statement of Cash Flows

A financial statement showing cash inflows and outflows for a period.

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Cash Receipts

Cash coming into a business.

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Cash Payments

Cash going out of a business.

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Specific Period

A particular time frame (e.g., a month, a quarter, a year).

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Financial Statement

A report summarizing business activity.

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Accounts Receivable Collection

Collecting money owed to a business by customers.

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$500 Accounts Receivable

A customer owes the business $500.

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Income Statement

A financial statement summarizing a company's revenues and expenses over a period, showing the net income or loss.

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Collection Effect

The action of a business collecting money owed by a client.

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Owner's Equity Statement

A financial statement detailing changes in an owner's stake in a business over a period.

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Balance Sheet

A financial statement presenting a company's assets, liabilities, and owner's equity at a specific point in time.

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$85,000- $100,000

Possible values for a particular amount.

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Assets

Resources owned or controlled by a company that have economic value.

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Accounts Receivable

Money owed to a company by customers for goods or services.

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Liabilities

Amounts owed by a company to creditors.

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Accounting Periods

Arbitrary time periods of equal length used to track entity progress.

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Reporting Entity Progress

Tracking the development of an entity over a period of time.

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Equal Time Periods

Accounting periods all have the same length.

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Arbitrary Time Periods

Pre-determined timeframes not necessarily tied to specific events.

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Periodic Progress Reporting

Regularly evaluating and documenting an entity's development over time.

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Study Notes

Fundamentals of Accounting I (ACC 102)

  • Course title: FUNDAMENTALS OF ACCOUNTING I
  • Course code: ACC 102

Brief Contents

  • Chapter 1: Accounting Information and Decision Making (page 3)
  • Chapter 2: The Recording Process (page 56)
  • Chapter 3: Adjusting the Accounts (page 116)
  • Chapter 4: Completing the Accounting Cycle, Closing and Correcting Entries (page 165)

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