Accounting Unit 1- ch 1 and 2

a. Interest Revenue Credit b. Accounts Payable Credit c. Calhoun, Capital Credit d. Office Supplies Debit e. Advertising Expense Debit f. Unearned Revenue Credit g. Prepaid Rent Debit h. Utilities Expense Debit i. Calhoun, Withdrawals Debit j. Service Revenue Credit

2. Identify whether the account is increased with a debit​ (DR) or credit​ (CR).

a. Interest Revenue Credit b. Accounts Payable Credit c. Calhoun, Capital Credit d. Office Supplies Debit e. Advertising Expense Debit f. Unearned Revenue Credit g. Prepaid Rent Debit h. Utilities Expense Debit i. Calhoun, Withdrawals Debit j. Service Revenue Credit

3. Identify whether the normal balance is a debit​ (DR) or credit

D. All of the above

Accounting is the information system that A. processes information into reports. B. measures business activity. C. communicates the results to decision makers. D. All of the above

Accounting Equation

Assets = Liabilities + Equity

Equity Equation

Capital, Beginning + Owner contribution + Net income or - Net loss - Owner withdrawal = Capital, Ending

1. Rent Expense Equity 2. Brock, Capital Equity 3. Furniture Asset 4. Service Revenue Equity 5. Prepaid Insurance Asset 6. Accounts Payable Liability 7. Unearned Revenue Liability 8. Notes Receivable Asset 9. Brock, Withdrawals Equity 10. Insurance Expense Equity

Consider the following accounts and identify each as an asset​ (A), liability​ (L), or equity​ (E). 1. Rent Expense 2. Brock, Capital 3. Furniture 4. Service Revenue 5. Prepaid Insurance 6. Accounts Payable 7. Unearned Revenue 8. Notes Receivable 9. Brock, Withdrawals 10. Insurance Expense

a. customer --------- E b. company manager --------- I c. Internal Revenue Service -------- E d. lender ---------- E e. investor --------- E f. controller -------- I g. cost accountant ----------- i h. SEC -------- E

For each of the users of accounting​ information, identify whether the user is an external decision maker​ (E) or an internal decision maker​ (I):

a. investor Financial Accounting b. banker Financial Accounting c. IRS Financial Accounting d. manager of the business Managerial Accounting e. controller Managerial Accounting f. stockholder Financial Accounting g. human resources director Managerial Accounting h. creditor Financial Accounting

For each user of accounting​ information, identify if the user would use financial accounting or managerial accounting.

Financial Accounting Standards Board​ (FASB).

Generally Accepted Accounting Principles​ (GAAP) are currently formulated by the

a. Accounts Payable Liability b. Cash Asset c. Owner, Capital Equity d. Accounts Receivable Asset e. Rent Expense Equity f. Service Revenue Equity g. Office Supplies Asset h. Owner, Withdrawals Equity i. Land Asset j. Salaries Expense Equity

Identify each account as​ Asset, Liability, or Equity. a. Accounts Payable b. Cash c. Owner, Capital d. Accounts Receivable e. Rent Expense f. Service Revenue g. Office Supplies h. Owner, Withdrawals i. Land j. Salaries Expense

A. Economic Entity Assumption B. The Cost Principle C. Monetary Unit Assumption D. The Going Concern Assumption

Michael McNamee is the proprietor of a property management​ company, Apartment​ Exchange, near the campus of Pensacola State College. The business has cash of​ $8,000 and furniture that cost​ $9,000 and has a market value of​ $13,000. The business debts include accounts payable of​ $6,000. Michael's personal home is valued at​ $400,000, and his personal bank account has a balance of​ $1,200. Identify the principle or assumption that best matches the​ situation: a. Michael's personal assets are not recorded on the Apartment​ Exchange's balance sheet. b. The Apartment Exchange records furniture at its cost of​ $9,000, not its market value of​ $13,000. c. The Apartment Exchange reports its financial statements in U.S. dollars. d. Michael expects the Apartment Exchange to remain in operations for the foreseeable future.

a. Interest Revenue Equity b. Accounts Payable Liability c. Calhoun, Capital Equity d. Office Supplies Asset e. Advertising Expense Equity f. Unearned Revenue Liability g. Prepaid Rent Asset h. Utilities Expense Equity i. Calhoun, Withdrawals Equity j. Service Revenue Equity

Requirements 1. Identify each account as an asset​ (A), liability​ (L), or equity​ (E). ​ (CR).

A. Financial Accounting Standards Board B. Generally Accepted Accounting Principles

Suppose you are starting a​ business, Wholly​ Shirts, to imprint logos on​ T-shirts. In organizing the business and setting up its accounting​ records, you take your information to a CPA to prepare financial statements for the bank. Name the organization that governs the majority of the guidelines that the CPA will use to prepare financial statements for Wholly Shirts. What are those guidelines​ called? The organization is called the A. ----------------------- The guidelines are called B. ----------------------- that the CPA will use to prepare financial statements for Wholly Shirts.

Assets=Liabilities+Equity

What is the accounting equation?

Faithful representation concept

Which of the following requires accounting information to be​ complete, neutral, and free from material​ error?

Sole proprietorship

Which type of business organization is owned by only one​ owner?

List two advantages of owning a sole proprietorship. 1. Easy to organize. 2. Unification of ownership and management

You would like to start a cellular telephone equipment service business. You are considering organizing the business as a sole proprietorship. Identify the advantages of owning a sole proprietorship.

List three disadvantages of owning a sole proprietorship. 1. Unlimited liability of owner. 2. The owner pays taxes on proprietorship's earnings since it is not a separate tax entity. 3. No continuous life or transferability of ownership.

You would like to start a cellular telephone equipment service business. You are considering organizing the business as a sole proprietorship. Identify the disadvantages of owning a sole proprietorship.

Account

a detailed record of all increases and decreases that have occurred in a particular asset, liability, or equity during a period of time

Compound Journal Entry

a journal entry that is characterized by having multiple debits and/or multiple credits

chart of accounts

a list of all accounts with their account numbers

trial balance

a list of all accounts with their balances at a point in time

Journal

a record of transactions in date order

Debit

left side of the t-chart

credit

right side of the t-chart

normal balance

side of an account when increases are recorded

Ledger

the record holding all the accounts of a business, the changes in those accounts, and there balances

posting

transferring amounts from the journal to the ledger