FINAL EXAM- ACCOUNTING.

Hamilton Lawn Service incurred $500 as labor expense and promised to pay the labor agency within 30 days. Which of Hamilton's accounts would increase as a result of this transaction?

Accounts Payable

Business renders services to a customer for $26,000 on account. Which of the following accounts will be debited

Accounts Receivable

Lush Lawns earned $1,000 for lawn mowing services rendered. The customer promised to pay at a later time. Which of the following accounts increased as a result of this transaction?

Accounts Receivable

Which of the following is an asset account

Accounts Receivable

Entry to record depreciation includes a credit to

Accumulated Depreciation account.

Sum of all the depreciation Expense recorded to date for a depreciate asset is called

Accumulated depreciation

An adjusting entry that credits Salaries Payable is an example of

Accused expense

An expense that has been incurred but not yet paid is called a

Accused expense

Which of the following is a collection of all the accounts, the changes in those accounts, and their balances?

Ledger

Assets of Sunlight Company are $270,000 and equity is $90,000. Liabilities will be

$180,000

The assets of Moon Company are $150,000 and liabilities are $90,000. The equity will be:

$60,000

A business makes a cash payment to a supplier on account ( for office supplies which were purchased earlier.) Which of the following accounts will be debited?

Accounts Payable

Economic resources of a business such as furniture, building, and land are its?

Assets

What is the Accounting Equation

Assets = Liabilities + Equity

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

Assets and Expenses

A sole proprietor makes a cash withdrawal from his company. How does this transaction affect the accounting equation

Assets decrease; equity decrease.

Which of the following financial statements reports that total assets are equal to total liabilities plus total owners equity?

Balance Sheer

Depreciate assets cost minus accumulated Depreciation is called

Book value

Which of the following accounts decreases with a credit?

Cash

Which of the following accounts increases with a debit?

Cash

According to the _____, the acquired assets should be recorded at the amount actually paid rather than at the estimated market value.

Cost Principle

Statement of owner's equity shows the changes in Owner's capital. Which one of these statements is true?

Decreases in Owners Equity result from net losses.

Entry to record depreciation includes a debit to

Depreciation Expense account.

Owners claim to the assets of the business is called?

Equity

Which type of account is Owner's Capital?

Equity

Which of the following accounting elements does the matching principle help to match.

Expenses and revenues.

GAAP?

Generally Accepted Accounting Principles

Which of the following is the correct order of preparation of financial statements?

Income Statement --> Statement of Owners Equity --> Balance Sheet --> Statement of cash flows.

Which of the following groups of accounts normally have a credit balance?

Liabilities and owners equity

Which of the following groups of accounts will decrease with a debit?

Liabilities and owners equity

A debt that a business owes to an outside party is called

Liability

Unearned Revenue is classified as a _______ account.

Liability

Which of the following accounts decreases with a debit?

Notes Payable

Which of the following is a liability account?

Notes Payable

Which of the following would result in an increase in income under the accrual method of accounting but would not result in an increase in income under the cash basis accounting?

Performance of services on account.

Which of the following is an asset account?

Prepaid Expense

The account title used for recording the prepayment of rent for a building in the future is?

Prepaid Rent

Advance cash payments of future expenses are called

Prepaid expense.

Nuptial Inc. paid the rent for the current month in cash. Which of the following account titles will be debited?

Rent Expense

Viva Inc. produces and sells coffee beans. This month it earned $500 by selling coffee beans to Jeffery Inc. The $500 received by Viva is its?

Revenue

The earnings that result from delivering goods or services to customers are called?

Revenues

Employees of Robert Rogers, CPA, worked the last two weeks of December. They received their paychecks on Jan 2. Which of the following accounts should appear on the balance sheet as of Dec 31 as per the matching principle.

Salaries Payable.

Which of the following accounts increases with a credit?

Smith, Capital

Which of the following is the correct formula for calculation depreciation under the straight line method?

Straight line depreciation = (cost + residual value) ÷ useful life.

Accused revenue is revenue that

The business has earned, but not yet collected in cash.

Income Statement presents a summary of an entity's revenues and expenses for a period of time. Which of the following statements is true of an income statement?

There is new income when total revenues are greater than total expenses

Which of the following account terms assumes that a business's activities can be divided into small segments and financial statements can be prepared for specific peruods, such as a month, quarter, or a year?

Time period concept

Which of the following is a liability account?

Unearned Revenue

Advance cash receipts of future revenues are called

Unearned revenues

If a company is using the accrual basis accounting method, when should it record it's earned revenue?

When services are rendered, even though services may be received at a later date.