SB CHP.4 ACCY 200 EXAM 1

Which of the following are acceptable/correct expressions of the balance sheet equation?

Assets - Liabilities = Stockholders' equity Assets = Liabilities + Paid-in capital + Retained earnings (beginning of period) + Revenues (during the period) - Expenses (during the period) Assets = Liabilities + Stockholders' equity Assets = Liabilities + Paid-in capital + Retained earnings

Assets = Liabilities + Paid-in capital + Retained earnings ___________ + ____________ - ___________

Blank 1: beginning Blank 2: Revenues Blank 3: Expenses

Although ______ and _______ are reported on the income statement, they also impact the ending balance of retained earnings shown on the balance sheet.

Blank 1: revenues Blank 2: expenses

Accounts are summarized in financial statements ________,whereas ________ are summarized in accounts.

Blank 1: statements Blank 2: transactions

Which of the following groups of accounts would be closed in the year-end closing process?

Insurance Expense, Service Revenue, Loss on Sale of Equipment, and Sales

Which of the following groups of accounts would all be closed in the year-end closing process?

Interest Income, Cost of Goods Sold, Dividends, and Gain on Sale of Land

In the closing process, all income statement accounts (revenues, expenses, gains, and losses) and dividends are closed. What is the name of the account in which all the aforementioned accounts are closed into?

Retained Earnings

Assets = Liabilities + Paid-in capital +

Retained earnings (beginning of period) + Revenues (during the period) - Expenses (during the period)

Which of the following accounts would be closed during the year-end closing process?

Service Revenue Gain on Sale of Land Rent Expense Cost of Goods Sold

Assets = Liabilities +

Stockholders' equity

Transactions:

are economic interchanges between entities are the starting point in the accounting process that ends with the preparation of financial statements

If debits equal credits, then:

assets will equal the sum of liabilities and stockholders' equity.

Transactions

can be seen as the bricks that build financial statements are summarized in accounts, and accounts are further summarized in financial statements

Credit entries:

decrease asset accounts and increase liability and stockholders' equity accounts.

Stockholders' equity accounts:

decrease with debit entries increase with credit entries normally have a credit balance

Normal account balances:

for asset accounts are on the debit side, and the balances for liability and stockholders' equity accounts are on the credit side.

Although revenues and expenses are reported on the income statement, they also:

impact stockholders' equity on the balance sheet.

Debit entries:

increase asset accounts and decrease liability and stockholders' equity accounts.

Asset accounts:

increase with debit entries normally have a debit balance decrease with credit entries

Net income from the income statement is added to the beginning balance of:

retained earnings in the statement of changes in retained earnings.

If debits equal credits, then:

the company's balance sheet equation will be in balance.