Laboratorio De Accounting

I. FIRST PART. Answer the questions.
1. Define accounting.
Is the process of identifying, measuring, and communicating economic information about an organization for the purpose of makingdecisions and informed judgments.
2. What is the Accounting Equation or the Balance Sheet Formula?
Assets= Liabilities + Owner’s Equity
3. What is the income Statement Formula?
Net Income =Revenues - Expenses
4. What is the Retained Earning Formula?
RE = Beginning Balance +/- Net Income - -+Dividends
5. Define the next key terms.

a. Interest
Is a fee paid by a borrower ofassets to the owner as a form of compensation for the use of the assets.
b. Creditor
An organization or individual who lends to the entity.
c. Bookeping
Procedures that are used tokeep track of financial transaction and accumulate the results of an entity’s financial activities
d. Loan
A loan is a type of debt. A loan entails the redistribution of financial assets overtime, between the lender and the borrower.
6. Explain the purpose of the next Financial Statements

e. Balance Sheet
Is a listing of the organization’s assets, liabilities, and owners’equity at a point in time.

f. Income Statement
The principal purpose of the income statement is to answer the question “Did the entity operate at a profit for the period of time underconsideration?” The question is answered by first reporting revenues from the entity’s operating activities and then subtracting the expenses incurred in generating those revenues and operating the entity.Gains and losses are also reported on the income statement.

g. Statement of Changes in Owners’ Equity
This statement shows the detail of owners’ equity and explains the changes thatoccurred in the components of owners’ equity during the year.

h. Statement of Cash Flow
Is to identify the sources and uses of cash during the year.

7. Participations Point (Optional)....