Free Printable Worksheets for learning Financial Accounting at the College level

Here's some sample Financial Accounting info sheets Sign in to generate your own info sheet worksheet.

Financial Accounting Info Sheet

What is Financial Accounting?

Financial accounting is the branch of accounting that is concerned with the preparation and presentation of financial statements for external users. It involves the measurement, recording, and communication of financial information about an organization to stakeholders, such as investors, creditors, and regulators.

Key Concepts

Generally Accepted Accounting Principles (GAAP)

GAAP are a set of accounting principles, standards, and procedures that companies must follow when preparing financial statements. They provide a standardized framework for financial reporting and ensure that financial statements are reliable, comparable, and consistent.

Double-Entry Accounting

Double-entry accounting is a system of accounting where every business transaction affects at least two accounts. For example, if a company sells goods on credit, it would record an increase in accounts receivable and an increase in revenue.

Trial Balance

A trial balance is a list of all the accounts in the general ledger and their balances. It is used to check the mathematical accuracy of the accounting records and to prepare financial statements.

Financial Statements

Income Statement

The income statement shows a company's revenues and expenses over a specific period of time. It is used to determine the profitability of the company and is often referred to as the profit and loss statement.

Balance Sheet

The balance sheet shows a company's assets, liabilities, and equity at a specific point in time. It is used to determine the financial position of the company.

Statement of Cash Flows

The statement of cash flows shows the inflows and outflows of cash and cash equivalents over a specific period of time. It is used to determine the liquidity of the company.

Important Information

Auditing

Auditing is the process of examining a company's financial statements and supporting documents to determine whether they are accurate and comply with GAAP. It is often performed by an independent auditor.

Internal Controls

Internal controls are policies and procedures that are designed to ensure the accuracy and completeness of a company's financial records. They are important for preventing fraud and errors.

Takeaways

  • Financial accounting involves the preparation and presentation of financial statements for external users.
  • GAAP provide a standardized framework for financial reporting.
  • Double-entry accounting ensures that every business transaction affects at least two accounts.
  • The income statement shows a company's revenues and expenses, the balance sheet shows its assets, liabilities, and equity, and the statement of cash flows shows its cash flows.
  • Auditing and internal controls are important for ensuring the accuracy and reliability of financial information.

Here's some sample Financial Accounting vocabulary lists Sign in to generate your own vocabulary list worksheet.

Word Definition
Asset Something owned with the intent of generating future economic benefit, like equipment, inventory, buildings, or cash.
Liability An agreed upon obligation to pay back a sum of money or a debt. This can include loans, taxes, wages payable and other outstanding bills.
Revenue Income generated from normal business operations, like the sale of goods or services.
Expense Costs incurred in the process of generating revenue, like salaries, rent, utilities, and office supplies.
Equity The residual interest in the assets of an entity after liabilities are deducted.
Profit The difference between revenue earned and expenses incurred during a specified period of time.
Balance The amount of money remaining in a business’s account after all credits and debits have been tallied.
Depreciation A reduction in the value of an asset over time.
Amortization The practice of spreading the cost of an intangible asset over its useful life.
Cash Flow The movement of cash into and out of a business, taking into account income, expenses, investments and financing.
Accrual A method of recording revenue and expenses when received and paid, rather than when cash transactions occur.
Ledger A book or database used to keep a summary of all financial transactions that have been made by a company.
Double Entry A recordkeeping method in which each financial transaction is recorded as two equal and opposite entries.
Audit A thorough review of a company's accounting records and financial statements to ensure accuracy and compliance with regulations.
Bookkeeping The process of recording and organizing a company's financial transactions.
Income Money earned from various sources, including gross wages, investment income and earned interest.
Expense Ratio The percentage of a company’s total revenue that goes toward costs and expenses.
Financial Statements Reports outlining a company's financial performance including balance sheets, income statements, and statements of cashflows.
GAAP Generally Accepted Accounting Principles. These are the standard guidelines that companies must follow accounting practices.
Gross Profit Revenue minus the cost of goods sold.
Net Income Revenue minus Total expenses.

Here's some sample Financial Accounting study guides Sign in to generate your own study guide worksheet.

Financial Accounting

Financial accounting is a crucial field in the business and finance industry. It is a process of analyzing, summarizing and reporting financial transactions to various stakeholders, including investors, creditors, and regulators.

Here are some essential topics that you should understand to have a strong foundation in financial accounting:

Financial Statements

Financial statements are reports that show an organization's financial performance over a given period. The primary financial statements include:

  • Income statement: It reports a company's revenue, expenses, and profitability over a given period.
  • Balance sheet: It reports a company's assets, liabilities, and shareholder equity at a specific point in time.
  • Cash flow statement: It shows cash inflows and outflows for a given period.

Accounting Standards and Regulations

There are various accounting standards and regulations that companies must follow when preparing financial statements. These include:

  • Generally Accepted Accounting Principles (GAAP): These are accounting standards used in the United States.
  • International Financial Reporting Standards (IFRS): These are accounting standards used in many countries worldwide.
  • Securities and Exchange Commission (SEC) regulations: It regulates companies that issue securities and require them to file financial statements with the agency.

Accounting Cycle

The accounting cycle is a process that companies use to record and report financial transactions. It includes the following steps:

  1. Recording financial transactions in a journal
  2. Posting journal entries to a ledger
  3. Preparing a trial balance
  4. Adjusting entries
  5. Preparing an adjusted trial balance
  6. Preparing financial statements
  7. Closing entries

Assets, Liabilities, and Equity

Assets, liabilities, and equity are the three primary components of a balance sheet. These terms refer to:

  • Assets: Anything that a company owns or has a right to use to generate income.
  • Liabilities: Any money that a company owes to others.
  • Equity: It is the portion remaining after liabilities are subtracted from assets.

Financial Ratios

Financial ratios are calculations used to analyze a company's financial performance. These ratios can help stakeholders evaluate a company's liquidity, profitability, and efficiency. Some commonly used ratios include:

  • Current ratio
  • Debt-to-equity ratio
  • Gross profit margin
  • Return on Equity (ROE)

Conclusion

Understanding financial accounting is essential for anyone who wishes to venture into finance or business. A solid foundation in financial accounting will not only help you make sound financial decisions, but it will also help you identify and mitigate risks in your business operations.

Here's some sample Financial Accounting practice sheets Sign in to generate your own practice sheet worksheet.

Financial Accounting Practice Sheet

Problem 1: Journal Entry

On May 1, 2021, XYZ Company purchased equipment for $20,000, paying $5,000 in cash and signing a promissory note for the remainder. Create a journal entry to reflect this transaction.

Problem 2: Trial Balance

Use the following information to create an unadjusted trial balance as of December 31, 2020.

  • Cash: $10,000
  • Accounts receivable: $5,000
  • Inventory: $15,000
  • Prepaid rent: $1,000
  • Equipment: $25,000
  • Accounts payable: $8,000
  • Salaries payable: $2,500
  • Notes payable (due in 2 years): $20,000
  • Common stock: $30,000
  • Retained earnings: $3,000

Problem 3: Adjusting Journal Entry

The company pays its employees on the 15th of each month. The next payday is January 15th, but due to the holidays, the employees will not be paid until January 18th. Create the necessary adjusting journal entry.

Problem 4: Income Statement

Use the following information to create an income statement for the year ended December 31, 2020.

  • Sales revenue: $100,000
  • Cost of goods sold: $40,000
  • Operating expenses: $25,000
  • Interest expense: $2,000
  • Tax rate: 30%

Problem 5: Balance Sheet

Use the following information to create a balance sheet as of December 31, 2020.

  • Cash: $10,000
  • Accounts receivable: $5,000
  • Inventory: $15,000
  • Prepaid rent: $1,000
  • Equipment: $25,000
  • Accumulated depreciation: $5,000
  • Accounts payable: $8,000
  • Salaries payable: $2,500
  • Notes payable (due in 2 years): $20,000
  • Common stock: $30,000
  • Retained earnings: $3,000

Problem 6: Closing Entries

Use the following information to create the necessary closing entries and calculate the company's net income for the year ended December 31, 2020.

  • Sales revenue: $100,000
  • Cost of goods sold: $40,000
  • Operating expenses: $25,000
  • Interest expense: $2,000
  • Income tax expense: $9,000
  • Tax rate: 30%

Financial Accounting Practice Sheet

Sample Problem

Calculate the net income of a company given the following information:

Total Revenue: $1,000,000

Total Expenses: $500,000

Solution:

Net Income = Total Revenue - Total Expenses

Net Income = $1,000,000 - $500,000

Net Income = $500,000

Practice Problems

  1. Calculate the gross profit of a company given the following information:

Total Revenue: $2,000,000

Total Cost of Goods Sold: $1,000,000

Solution:

Gross Profit = Total Revenue - Cost of Goods Sold

Gross Profit = $2,000,000 - $1,000,000

Gross Profit = $1,000,000

  1. Calculate the operating income of a company given the following information:

Total Revenue: $4,000,000

Total Operating Expenses: $2,000,000

Solution:

Operating Income = Total Revenue - Total Operating Expenses

Operating Income = $4,000,000 - $2,000,000

Operating Income = $2,000,000

  1. Calculate the net income of a company given the following information:

Total Revenue: $3,000,000

Total Expenses: $1,500,000

Solution:

Net Income = Total Revenue - Total Expenses

Net Income = $3,000,000 - $1,500,000

Net Income = $1,500,000

Financial Accounting Practice Sheet

Basic Concepts

  1. What is the difference between a balance sheet and an income statement?
  2. What is the purpose of a double-entry bookkeeping system?
  3. What is the purpose of the accrual accounting method?
  4. What is an example of a non-cash transaction?
  5. What is the difference between a debit and a credit?

Assets

  1. How are assets classified on a balance sheet?
  2. What is the difference between current and non-current assets?
  3. What is the difference between tangible and intangible assets?
  4. What is the purpose of depreciation?
  5. What is the difference between realized and unrealized gains and losses?

Liabilities

  1. How are liabilities classified on a balance sheet?
  2. What is the difference between current and non-current liabilities?
  3. What is the difference between a secured and an unsecured debt?
  4. What is the purpose of accruals?
  5. What is the difference between a contingent liability and a contingent asset?

Equity

  1. What is the purpose of equity in a business?
  2. What is the difference between common stock and preferred stock?
  3. What is the difference between retained earnings and paid-in capital?
  4. What is the purpose of a dividend?
  5. What is the difference between treasury stock and authorized stock?

Here's some sample Financial Accounting quizzes Sign in to generate your own quiz worksheet.

Problem Answer
What is the fundamental accounting equation? The fundamental accounting equation is Assets = Liabilities + Equity.
What is the difference between an asset and a liability? An asset is a resource that a company owns or controls, while a liability is something that a company owes to someone else.
What is the purpose of a journal entry? A journal entry is used to record a single business transaction in the accounting system.
What is the difference between accounts receivable and accounts payable? Accounts receivable is money that is owed to a company by its customers, while accounts payable is money that a company owes to its vendors or suppliers.
How is the balance sheet different from the income statement? The balance sheet shows a company’s financial position at a specific point in time, whereas the income statement shows the company’s financial performance over a period of time.
What is a trial balance and why is it important? A trial balance is a list of all the accounts in the general ledger with their respective debit or credit balances. It is important because it ensures that the total debits are equal to the total credits before creating financial statements.
What is the difference between bookkeeping and accounting? Bookkeeping is the process of recording daily transactions in a consistent manner, while accounting involves analyzing, interpreting, and summarizing financial data to make business decisions.
What is depreciation and how is it calculated? Depreciation is the process of allocating the cost of a long-term asset over its useful life. It is calculated by dividing the cost of the asset by its useful life.
What is the purpose of the cash flow statement? The purpose of the cash flow statement is to show the sources and uses of cash during a particular period of time. It helps users to understand how a company generates and uses cash.
What is the difference between a cash basis and accrual basis of accounting? The cash basis of accounting records revenues and expenses when cash is received or paid, while the accrual basis of accounting records revenues and expenses when they are earned or incurred, regardless of when cash is exchanged.
What is a chart of accounts? A chart of accounts is a list of all the accounts used by a company to record accounting transactions.
Problem Answer
What is the primary goal of financial accounting? The primary goal of financial accounting is to provide useful financial information to stakeholders to help them make informed decisions.
What is the difference between financial accounting and managerial accounting? Financial accounting focuses on providing financial information to external stakeholders, such as investors and creditors, while managerial accounting focuses on providing financial information to internal stakeholders, such as managers and employees.
What is the accounting equation? The accounting equation is Assets = Liabilities + Equity.
What is the purpose of the balance sheet? The purpose of the balance sheet is to provide a snapshot of a company's financial position at a given point in time. It shows the company's assets, liabilities, and equity.
What is the purpose of the income statement? The purpose of the income statement is to show the company's revenues, expenses, and net income over a period of time.
What is the purpose of the statement of cash flows? The purpose of the statement of cash flows is to show the company's sources and uses of cash over a period of time.
What is the difference between cash and accrual accounting? Cash accounting records transactions when cash is exchanged, while accrual accounting records transactions when they are incurred.
What is the difference between a debit and a credit? A debit increases an asset account or decreases a liability or equity account, while a credit decreases an asset account or increases a liability or equity account.
What is the difference between a journal entry and a ledger entry? A journal entry is a record of a transaction, while a ledger entry is the record of a transaction in a specific account.
What is the difference between a balance sheet and an income statement? A balance sheet shows a company's financial position at a given point in time, while an income statement shows the company's revenues, expenses, and net income over a period of time.

Financial Accounting Quiz

Question Answer
What is the primary purpose of financial accounting? To provide useful financial information to decision makers
What is the difference between financial accounting and managerial accounting? Financial accounting focuses on providing external stakeholders with financial information, while managerial accounting focuses on providing internal stakeholders with financial information
What is the accounting equation? Assets = Liabilities + Equity
What is the purpose of the statement of cash flows? The statement of cash flows shows the sources and uses of cash for a given period of time
What is the difference between a balance sheet and an income statement? A balance sheet records the assets, liabilities, and equity of a business at a given point in time, while an income statement shows the revenues and expenses of a business over a given period of time
What is the difference between a debit and a credit? A debit increases an asset or expense account, while a credit increases a liability or equity account
What is the difference between a journal entry and a ledger entry? A journal entry is an individual accounting transaction, while a ledger entry is the sum of all journal entries for a given account
What is the difference between a trial balance and a balance sheet? A trial balance is a list of all accounts and their balances, while a balance sheet is a statement of a company's financial position at a given point in time
What is the difference between gross profit and net profit? Gross profit is the difference between total revenue and total cost of goods sold, while net profit is the difference between total revenue and total expenses
What is the purpose of the generally accepted accounting principles (GAAP)? The generally accepted accounting principles (GAAP) are a set of rules and guidelines used to ensure consistency and accuracy in financial reporting
Background image of planets in outer space