International Finance and Accounting

MBA 664 International Finance and Accounting
Pre-class Assignment
Requirements:
* Please type answers right after each question.
* Submission must be WORD format, made through the designated Dropbox in Moodle
* For ease of reference, please use file name “PreClass_LastName”
1 What is the basic accounting equation? Assets = Liabilities + Equity
2 Explain what asset is, and provide three examples of assets. An asset is anything that has value and can be used to generate income. Examples of assets include cash, investments, property, equipment, and inventory.
3 Explain what liability is, and provide three examples of liability. Liability is the legal or financial obligation of an individual or organization. Examples of liability include: debt, credit cards, mortgages, loans, and leases. Equity is the ownership stake that an individual or organization has in a company or property.
4 Explain what equity is, and what would increase equity and what would decrease it. Equity would increase if the value of the company or property increased, or if the individual or organization acquired additional ownership stake. Equity would decrease if the value of the company or property decreased, or if the individual or organization sold or transferred some of their ownership stake.
5 What type of accounts have debit balances? debit balances are found in asset and expense accounts
6 What type accounts have credit balances? credit balances are found in liability, equity, and revenue accounts.
7 Explain double entry bookkeeping. Double entry bookkeeping is a system where every transaction is recorded in at least two accounts, with the debit entry being recorded in one and the credit entry being recorded in the other. This system helps to ensure the accuracy of financial records.
8 What are the five stages of accounting system? The five stages of an accounting system are:
1. Planning and designing the system
2. Creating the system
3. Implemen...