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- What is the difference between managerial and financial accounting?
- What is the difference between a business organization and a nonbusiness organization?
- What are the three types of business organizations?
- What is a publicly accountable enterprise? A private enterprise?
- What does the term limited liability mean?
- Describe what GAAP refers to.
- Identify and explain the six qualitative characteristics of GAAP.
- What is the general purpose of financial statements? What are the four types of financial statements?
- What is the purpose of an income statement? a balance sheet? How do they interrelate?
- Define the terms “revenue” and “expense”.
- What is net income? What information does it convey?
- What is the purpose of a statement of changes in equity?
- Shareholders’ equity consists of what two components?
- Explain how retained earnings and dividends are related.
- What are the three primary components of the balance sheet?
- What are assets?
- To what do the terms “liability” and “shareholders’ equity” refer?
- What information is provided in the statement of cash flows?
- What are notes to the financial statements?
- Illustrate how the double-entry accounting system works.
- Why are financial statements prepared at regular intervals? Who are the users of these statements?
- What is the basic accounting equation? How does it work?
- Explain what is meant by the term “financial transaction”. Give an example of a financial transaction.
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