Barrows

Review Question

Which of the following publications does not qualify as a statement of generally accepted accounting principles? a. Statements of financial standards issued by the FASB b. Accounting interpretations issued by the FASB c. APB Opinions d. Accounting research studies issued by the AICPA

3-1

Review Question

Members of the Financial Accounting Standards Board are a. employed by the American Institute of Certified Public Accountants (AICPA). b. part-time employees. c. required to hold a CPA certificate. d. independent of any other organization.

3-2

Review Question

The objectives of financial reporting include all of the following except to provide information that a. is useful to the Internal Revenue Service in allocating the tax burden to the business community. b. is useful to those making investment and credit decisions. c. is helpful in assessing future cash flows. d. identifies the economic resources (assets), the claims to those resources (liabilities), and the changes in those resources and claims.

3-3

The Accounting Information System

•  •  • 

The accounting information system The accounting cycle Four financial statements

3-4

The Accounting Information System

Accounting Information System

" " " "

The Accounting Cycle

" " " " " " " " " "

Financial Statements for Merchandisers

" " " "

Basic terminology Debits and credits Accounting equation Financial statements and ownership structure

Identifying and recording Journalizing Posting Trial balance Adjusting entries Adjusted trial balance Preparing financial statements Closing Post-closing trial balance Reversing entries

Income statement Statement of retained earnings Balance sheet Closing entries

3-5

Accounting Information System

Basic Terminology

u  u  u  u  u  u 

Event Transaction Account Real Account Nominal Account Ledger

u  u  u  u  u  u 

Journal Posting Trial Balance Adjusting Entries Financial Statements Closing...