Accounting "Final"

If the assets of a company are $10 000 and the liabilities are $7 000, then the correct figure for Owner's Equity is

$3 000

The financial statement, reporting assets, liabilities and owner's equity at a specific date, is called a?

Balance sheet

The ______ account represents the Owner's claim on the assets of his business.

Capital

The ______ is increased by a debit

Cash account

A cash investment by the owner increases __________ and __________.

Cash and capital

The accounts payable account is increased by a ________.

Credit (AP)

The accounts receivable account is decreased by a ________.

Credit (AR)

The normal balance of a liability account is a ________.

Credit (L)

The normal balance of revenue account is a ______.

Credit (R)

_______ accounts are increased by a credit

Revenue

A file, group of accounts, is known as a(n)

Ledger

The _____ side of an account is the debit side.

Left

________ accounts are decreased by a Debit_.

Liability

The financial statement on which the Drawings account appears is called the

NO WHERE!! None!!

Arrowhead Lake Boat Shop bought a $700 electric hoist to lift engines out of boats. The boat shop paid $200 in cash and promised to pay the balance in 20 days. This transaction will cause:

No change in owner's equity, but a $500 increase in both assets and liabilities

The owner's withdrawal of cash for personal use reduces cash and

Owner's Equity (capital)

Which of the following equations cannot be derived from the basic accounting equation (Assets=Liabilities + Owners Equity):

Owner's Equity = Liabilities - Assets

_____ is increased by a credit

Owners equity

When a check is issued to decrease the balance owed to a creditor, this money is said to be a ________.

Payment on account

A listing of ledger accounts and their balances is referred to as a

Trial Balance

If a trial balance is in balance, the account balances are correct

True (probably)

If an entry involves a debit to an asset account, it may also involve a credit to:

a liability account, an asset account and a capital account

A debit to an account may:

increase any asset

In reviewing the books for his company, the owner noted that one transaction was recorded as a $500 debit to Cash and a $500 debit to Furniture and Fixtures. The result of this error will cause

the Cash account to be overstated by $1 000

A business buys land for $50 000 on credit. In recording the transaction, the effect on the accounting equation will be:

Assets increase and liabilities increase

The accounting equation is based on three fundamental parts: __________, __________ and __________.

Assets, Liabilities, and Owner's Equity

The sum of the debits must be _____ to the sum of the credits.

Equal

After analyzing each transaction, the fundamental accounting equation must still what?

Equal/balance

______ accounts are increased by a debit.

Expense

The term "debit" means increase, and the term "credit" means decrease.

False- debit on the left credit on the right

The third line of the balance sheet heading contains the name of the business.

False- it contains the date/time period

The cash purchase of an asset changes the capital of the business.

False- it would change the cash and whatever asset was bought

Business debts owed to us by our customers are known as accounts payable.

False- known as A/R

The difference between the total debits and total credits in an account is called the

Account Balance

If the owner of a business pays cash to repair the company's delivery truck:

An Expense account is debited and Cash is credited

The normal balance of an _______ account is a debit

Asset

All creditors have a claim against the_____ of a business.

Assets

Asset accounts are increased by a _______.

Debit

The normal balance of an expense account is a ________.

Debit (E)

The equipment account is increased by a ________.

Debit (Eq)

A business borrows $10 000 from the bank. The entry to record the transaction is

Debit Cash and credit Notes Payable

If the total on the left side of an account is greater than the total on the right side, the account has a _____.

Debit balance

The basic feature of the double entry system of accounting is that, for each transaction, the amount of __________ must equal the amount of the __________.

Debit/Credit

When cash is received from a debtor the _______ is credited.

Debtor's account

The period of time over which earnings are measured is called the accounting period or the __________ period.

Fiscal

The _______ side of an account is the credit side.

Right