Accounting Test 1

The accounting process begins with?

An analysis of business transactions and source documents

If the assets of a business increased by 89,000 during a period of time and its liabilities increased by 67,000 during the same period, equity in the business must have?

increased by 22,000

Double-entry accounting is an accounting system that records:

the effects of transactions and other events in at least two accounts with equal debits and credits.

The account used to record the transfers of assets from a business to its owner is called:

the owners withdraws account.

The description of the relation between a company's assets, liabilities, and equity which is expressed as Assets = Liabilities + Equity, is known as the:

Accounting equation

On June 30th of the current year, Cash 20,500 Accounts Receivable 7,250 Supplies 650 Equipment 12,000 Accounts Payable 9,300 What is the amount of owner's equity as of July 1st of the current year?

31,100

If equity is 300,000 and liabilities are 192,000, then assets equal:

492,000

The assets of a company total 700,000; the liabilities, 200,000. What are the claims of the owners:

500,000

If assets are 99,000 and liabilities are 32,000, then equity equals:

67,000

Zion company has assets of 600,000, liabilities of 250,000, and equity of 350,000. It buys office equipment on credit for 75,000. What would be the effect of this transaction on the accounting equation?

Assets increase by 75,000 Liabilities increase by 75,000

If a company paid 38,000 of its accounts payable in cash, what was the effect on the assets, liabilities, and equity.?

Assets would decrease 38,000 liabilities would decrease by 38,000 equity would not change

DEA-LOR stands for?

D - Dividends E - expenses A - assets L - liabilities O - Owners equity R - revenue

Management Services, Inc. provides services to clients. On May 1st, a client prepaid management services 60,000 fr 6-month services in advance. Management services general entry to record this transaction will include a:

Debit - cash Credit - Unearned management fees for 60,000

The difference between a company's assets and its liabilities, or net assets is:

Equity

The excess of expenses over revenues for a period is:

Net loss

The basic financial statement include what four documents?

The Income Statement Owners Equity The balance sheet Statement of Cash flow

Unearned revenues are liabilities created when:

a customer pays in advance for products or services before the revenue s earned.