UGBA 102A Study Guide - Final Guide: Accounting Equation, Retained Earnings, Historical Cost

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Chapter 2: page 77-78 q 4, 8; page 78-79 mc 3, 7; page 83, 88 e2-2, e2-17. Q4: accounting assumptions are necessary because they reflect the scope of accounting and the expectations that place certain limits on the manner in which accounting information is reported. The assumptions enable a company"s financial statements to be created in a way that investors expect and authorities require. Q8: debit refers to the amount being entered on the left side of the accounting equation, and credit refers to the amount being entered on the right side of the accounting equation. Given: contributed capital (stockholders" equity: received: equipment (assets) Given: cash (assets: no account titles are affected as there is no exchange transaction, received: equipment (assets) Given: notes payable (liabilities: received: building (assets) Given: cash (assets: received: retained earnings (stockholders" equity) Given: cash (assets) and notes payable (liabilities: no accounts titles are affected as there is no exchange transaction, received: investment (assets)

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