accounting BUS2203 exam#1

The matching principle is the principle that states:

A. All costs that are used to generate revenue are recorded in the period the revenue is recognized.

Consider the following accounts:

A. One

How many of these accounts are increased with debits?

A. One

When a company INCURS employee salaries but does not pay them, how will the basic accounting equation be affected?

A. Stockholders' equity decreases.

Accounting is a system of maintaining records of a company's operations and communicating this info. to decision makers.

A. True

Retained earnings represent the cumulative amount of net income earned over the life of the company that has not been distributed to stockholders as dividends.

A. True

The accounting equation is defined as:

A. liabilities + stockholders' equity= Assets

Which of the accounts are decreased on the debit side and increased on the credit side?

A. liabilities, common stock, revenues.

Use the following appropriate amounts to calculate NET INCOME: Revenues $12,000; Liabilities, $5000; Expenses $4,000; Assets, $19,000; Dividends, $4,000.

B. $8,000

Which of the following is NOT an asset account?

B. Accounts Payable.

The cost of providing goods and services to customers are refereed to as:

B. Expenses

The balance sheer is a financial statement that reports the company revenues and expenses over an interval of time.

B. False

Today, financial accounting and reporting standards in the United States are established primarily by the:

B. Financial Accounting Standards Board. (FASB)

The body of rules and procedures that guide the measurement and communication of financial accounting information in the United States is known as:

B. Generally Accepted Accounting Principles. (GAAP)

A trail balance represents the:

B. List of all accounts and their balances at a particular date to ensure that debits equal credits.

The Unearned Revenue account is shown in which statement?

C. Balance sheet.

Which of the following is not part of measuring external transactions?

C. Making payments on all amounts owed.

What is the primary purpose of financial accounting?

C. Measure business transactions and communicate those measures to external users to make decisions.

In what order are the following financial statements prepared: (1) balance sheet, (2) income statement, and (3) statement of stockholders' equity?

D. $32,900

The adjusting entry required to record accused expenses includes:

D. A credit to liability.

Which of the following items would NOT appear in an income statement?

D. Cash

Which of the following accounts would normally have a debit balance?

D. Cash, Delivery expense, Dividends.

Which of the following is NOT a balance sheet item?

D. Revenues

POSTING transactions to T-accounts involve:

D. Transferring debit and credit information from the JOURNAL to the accounts in the general ledger.