1.8: Discussion Questions
- Page ID
- 28314
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- What are generally accepted accounting principles (GAAP)?
- When is revenue recognised?
- How does the matching concept more accurately determine the Net Income of a business?
- What are the qualities that accounting information is expected to have? What are the limitations on the disclosure of useful accounting information?
- What are assets?
- To what do the terms liability and equity refer?
- Explain the term financial transaction. Include an example of a financial transaction as part of your explanation.
- Identify the three forms of business organization.
- What is the business entity concept of accounting? Why is it important?
- What is the general purpose of financial statements? Name the four financial statements?
- Each financial statement has a title that consists of the name of the financial statement, the name of the business, and a date line. How is the date line on each of the four financial statements the same or different?
- 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? a statement of cash flows?
- Why are financial statements prepared at regular intervals? Who are the users of these statements?
- What is the accounting equation?
- Explain double-entry accounting.
- What is a year-end? How does the timing of year-end financial statements differ from that of interim financial statements?
- How does a fiscal year differ from a calendar year?