Review of Principles of Financial Accounting O\'Shaughnessy ACCT 201 1. Use the

Question

Review of Principles of Financial Accounting O'Shaughnessy ACCT 201 1. Use the following list of accounting principles and match with the appropriate desaription Business entity principle Cost-benefit Full disclosure principle Going concen principle Objectivity principle Revenue recognition principle principle Matching Materiality principle Measurement (cost) principle Time period assumption Monetary unit principle 1. The principle that required that revenue be recognized when eamed. 2. Principle that requires a business to be accounted for separately from ts owners and from any other entity 3. Principle that assumes transactions and events can be expressed in money units 4. Principle that prescribes financial statement information to be based on actual costs incurred in business transactions. 5. Principle that prescribes independent, unbiased evidence to support financial statement information 6. The principle that requires expenses to be reported in the same period as the revenues that were eaned as a result of the expenses 7. A principle that assumes that an organization's activities can be divided into specific time periods such as months, quarters or years. 8. Principle that requires a company to report the details behind financial statements that would impact users' decisions. 9. Assumption that the business will continue operating instead of being closed or sold. 10. Notion that only information with benefits of disclosure greater than the costs of disclosure need be disclosed. 11. Prescribes that accounting for items that significantly impact financial statement and any inferences from them adhere strictly to GAAP 2. Identify the each financial statement based on the description. Financial Statement Financial Statement Description Financial statement that subtracts expenses from revenues to yield a net income or loss over a specified period of time; also includes any gains or Financial statement that lists types and dollar amounts of assets, liabilities, and equity at a specific A Financial statement that lists cash inflows and cash outflows during a period; aranged by operating investing, and financing activities. Financial statement that lists the beginning and ending balances of each major equity account and describes all changes in those accounts. Report of changes in retained eanings over a period; adjusted for increases, decreases, and any prior period adjustment

Explanation / Answer

Only first 7 questions are answered

1) Accounting principles and assumptions-

2) Types of Financial Statements

3) Stages in Accounting Cycle in chronological order

4) Accounting Ratios

5) Accounting Equation

The basic accounting equation, also called the balance sheet equation, represents the relationship between the assets, liabilities, and owner's equity of a business.

ASSETS = EQUITY + LIABILITIES

6) Normal Balance of asset is Debit Balance.

7) Normal Balance of Liabilities is Credit Balance.

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