Accounting
A chart of accounts is
A listing of each general ledger account which is assigned a name and a number
Ending amounts on the statement of changes in equity are the same as those on the
Balance sheet
Which of the following is not a form of business organization?
Charity
Double‐entry accounting requires
Debits to equal Credits
Which of the following is not an expense?
Dividends paid
A document that is used to chronologically record a business's debit and credit transactions is called a
General journal
Amounts are posted from the ________ to the ________
Journal, general ledger
This accumulates information regarding the increases and decreases in a specific asset, liability, or equity item
Ledger account
Debit means
Left side of an account
Debits always decrease which accounts?
Liabilities, Revenue and Common Stock
Credits always increase which accounts?
Liabilities, Revenues and Common Stock
A company purchases supplies and records these as an asset. As they are used, they are expensed. This is an example of:
Matching
An accounting policy requiring a corporation to capitalize any asset over $5,000 in value would be an example of:
Materiality
The statement of cash flows is divided into which sections?
Operating, investing, and financing
Which of the following is not a liability?
Prepaid expense
Which of the following best describes a trial balance?
Provides a mathematical check before the financial statements are prepared.
The primary qualitative characteristics of accounting information are:
Relevance and faithful representation
US GAAP is adopted by
SEC
Amounts on the income statement are transferred to the
Statement of changes in equity
Consider the following general ledger T-account:
$4,900 debit
Which of the following does not describe a partnership?
A business owned by one or more individuals
Customer payments receieved in advance of the product or service being provided is recorded in which general ledger account?
Unearned Revenue
Credit means
right side of an account
An example of an asset is:
supplies expense
Which of the following does not describe a proprietorship?
It is a separate legal entity
Which of the following is not a stockholders' equity account?
Investments
Credits always decrease which accounts?
Assets and Expenses
Debits always increase which accounts?
Assets, Dividends, Expenses
A business purchases a vehicle for $35,000. Since the vehicle was advertised for $40,000 the company decided to record the asset at $40,000. This is a violation of which accounting principle?
Historical cost
A company purchased land in 1950 for $10,000. Although the land is now worth $300,000 the accounting records are not changed. This is an applcation of which accounting convention?
Historical cost
A company purchased a building worth $500,000 by paying $50,000 in cash and acquiring a bank loan for the remainder. The effect on the accounting equation is:
Increase in assets and liabilities by $450,000
Which of the following describes a corporation?
The owners have limited liability