INTUIT BOOKKEEPING EXAM-with 100% verified solutions 2024-2025, Exams of Accounting

Download INTUIT BOOKKEEPING EXAM-with 100% verified solutions 2024-2025 and more Exams Accounting in PDF only on Docsity! INTUIT BOOKKEEPING EXAM-with 100% verified solutions 2024-2025 Four Key Elements of Bookkeeping Ethics Honesty, Objectivity, Confidentiality and Professionalism What is DEALER Dividends + Expenses + Assets = Liabilities + Owner's Equity (beginning) + Revenue What's is the accounting Equation? Assets = Liabilities + Equity Profit and Loss statement. Shows the company's revenues and expenses during a particular period The Income Statement A financial statement that reports a company's assets, liabilities, and equity at a specific point in time The Balance Sheet Reports the changes in company equity, from the opening balance to the end of the period balance. The Statement of Equity Reports the sources and uses of cash by a business The Statement of Cash Flow Accounting Cycle 1. Analyze and record transactions 2. Post transactions to ledger 3. Prepare an unadjusted trial balance 4. Prepare adjusted entries at the end of the period 5. Prepare adjusted trial balance 6. Prepare financial statements If customers pays at the time of sale you must enter it as a Sales Receipt If customers does not pay at the time of sale you must enter it as a Invoice Once and customer has paid an invoice it goes to Receive payment Receive payment and sales receipt are followed by Bank deposit Step 4 of The Accounting Cycle: Preparing adjusted entries includes Deferrals, Accruals, Missing Transactions, and Tax Adjustments Removing transactions that belong to a different period Deferral Opposite of deferral. Concern future payments or expenses Accruals The total you get when adding all current assets and all long-term assets. This should equal Total Liabilities+Toal Equity Total Assets A physical asset, such as inventory, vehicle, or a building Tangible Asset Not a physical asset. Examples would be a copyright, patent, or brand recoginition Intangible Asset A signed document containing a written promise to pay a stated sum to a specified person or bearer at a specified ate or on-demand Promissory Note Notes Receivable A current or non-current asset Notes Payable A current or non-current liability Interest Equation Principle x Interest (mulitply by 30/365 to find day) Receivables, loans, or other debits that have virtually no chance of being paid Accounts Uncollectible An expense that a business incurs once the repayment of credit previously extended to a customer is estimated to be uncollectible Bad Debt A bad debt is charged to expense as soon as it is apparent that an invoice will not be paid. This is easier for business owners. Direct Write-Off Method An estimate of the future amount of bad debt is charged to a reserve account as soon as a sale is made. This is more accurate but complex Allowance Method A contra-asset account that has a natural credit balance. Balances decrease with debits and increase with credits Accumulated Depreciation Account An expense account on the income statement showing the cost of merchandise to the business Cost of Goods Sold (COGS) An inventory system that continuously update the inventory account Perpetual An inventory system that updates the inventory account only at specified intervals Periodic Inventory Cost Flows FIFO, LIFO, and Average Cost First-In, First-Out (FIFO) Method to assign cost to inventory that assumes items are sold in the order acquired; earliest items purchased are the first sold. Last in, First out (LIFO) Method to assign cost to inventory that assumes costs for the most recent items purchased are sold first and charged to cost of goods sold. Average Cost All items in the inventory are priced at their average cost Closing Inventory Closing Inventory=Cost of Goods Available- COGS Non-current liabilities Money owed by the business for more than one year, sometimes called long-term liabilities Bonds Payable long-term liabilities that represent money lent to the firm that must be paid back The expected balance of a particular account type. Assets have a normal debt balance where debts increase and credits decrease. Liabilities have a normal credit balance where debt decrease and credit increase The Natural (Normal) Account Balance Gross Pay the total amount of an employee's earnings before deductions are taken out Net Pay Amount of income left after taxes and deductions have been taken out. Pay Period the period covered by a salary payment Employee Information or Payroll w-2s, I-9's, 1099's and w-4's Sole Proprietorship a business owned and managed by a single individual Partnership a business organization owned by two or more persons who agree on a specific division of responsibilities and profits LLC (Limited Liability Company) Owned by 1 or more and not personably liable. Can be paid by salary, guaranteed payments, or owners draw. Will show up on balance sheet or P&L depending on filing 1 or more shareholders who aren't personable liable. Must have a board of directors and strict rules for operating. Owners can be paid as an employee or from a distribution of dividends. Pay will show up on the balance sheet if paid salary or on P&L is paid dividends. C Corp Owners who are heavily involved and are also employees and paid reasonable salaries. Pay will show up on both the balance sheet and P&L S Corp One or more but no single person or group owns a nonprofit. A public organization governed by a board of directors. No personal liability, A founder can become a staff employee or executive director in order to get paid a reasonable salary. Paid out of wages and will show on the balance sheet Nonprofit Corporation Internal Reports System Gathers relevant information from within the organization's own internal operations. External Reports reports or other output produced for use by people outside the organization Amoritization the reduction of a loan balance through payments made over a period of time Loan Amortization Schedule a schedule of the breakdown of each payment between interest and principal as well as the remaining balance after each payment A loan used to finance a company's daily operations Working Capital Loan the borrower has pledged some asset as collateral. Net Profit Margin Net Profit Margin Formula Net profit/sales revenue Analyzes short term financial risk Current Ratio Current Ratio Formula Current Ratio = Current Assets / Current Liabilities Compares total debt to total equity Debt to Equity Ratio Debt to Equity Ratio Formula Total Debt / Shareholder's Equity Accounts Payable Turnover Net Credit Purchases/Average Accounts Payable Accounts Receivable Turnover Ratio net credit sales/average net accounts receivable Cash Flow Coverage Ratio Cash Flow Operations/ Total Debt Current Liability Coverage Ratio Net Cash from Operating Activities/ Average Current Liabilities Cash Flow Margin Ratio cash flow from operations/net sales Key performance indicators (KPIs) Quantifiable measures of performance used to gauge progress toward strategic objectives or agreed standards of performance. 8 Step Payroll Process 1. Choose payroll system 2. Create Payroll Policy 3. Gather Employee Info 4. Setup Direct Deposit 5. Establish Time Tracking System 6. Collect Employee Time Sheets 7. Approve and Submit Employee Payroll 8. Report and Update Payroll records