Day 12: Review: Business Transaction Basics

Be sure you can answer the following questions:

1. When should revenues and expenses be reported?
2. Describe the concept of a prepaid expense:
3. Compare and contrast accounts receivable and accounts payable:
4. What does debit and credit mean?

Be sure you know how to record the following transactions:

1. Issue stock for cash.
2. Buying an asset on account or with cash.
3. Paying off a debt.
4. Providing a service for a fee on account or for cash.
5. Collecting a debt.
6. Paying for utilities.
7. Declare and pay dividends.

Be sure you can accurately describe the basic components of each of the financial statements:

• Income Statement
• Retained Earnings Statement
• Balance Sheet
• Cash Flow Statement

Chapter 1 Quiz Next Class Period