Accounting mid-term study guide questions 1-49
Owner invests $1200 cash into their business. Which 2 accounts are being affected?
Capital & cash
What is owner's equity?
The assets minus the liabilities of a business
An account number in the journal's Post. Ref. column shows
the account to which an amount is posted
An accounting year beginning on July 1 and ending on June 30 is referred to as a _________ year.
Fiscal
An endorsement on the back of a check consisting of the words "Pay to the order of"and a new check owner's name is a
Special endorsement
Accounting entries involve a minimum of how many accounts?
2
Which Information is not included in the Worksheet Heading?
Accountant Name
________ is the language of business
Accounting
Which account is a liability?
Accounts Payable - Cenex
When the business is owed money it is called
Accounts Receivable
Bought supplies on account Which 2 accounts are being affected?
Accounts payable & supplies
What category? Supplies
Asset
What type of account is Prepaid Insurance?
Asset
Anything of value that is owned by the company (such as cash, accounts receivables, vehicles, etc.) are reported on the balance sheet and are referred to as _______________.
Assets
Items found on a balance sheet
Assets, Liabilities, Owner's Equity
Heading, assets, liabilities, and owner's equity are sections of the
Balance sheet
The _____________________________ is one of the main financial statement and reports the assets, liabilities, and owner's equity at a specific point in time.
Balance sheet
On a Worksheet: Asset, Liability and Equity Account are extended to
Balance sheet section
The accounting equation must always be
Balanced
In accounting, which is on the right side of an account?
Credit
When a company pays a bill, the account Cash will be
Credited
How would an accountant record an increase in an Expense?
Debit
All of the transactions entered in a purchases journal are a _?_ to Purchases and a _?_ to Accounts Payable.
Debit; credit
Entries to expenses such as Rent Expense are usually
Debits
When a company pays a bill using cash, the cash account does what?
Decreases
What category? Utility Expense
Expense
The owner's capital amount reported on a balance sheet is calculated as: capital account balance plus drawing account balance less net income.
False
The posting reference should always be recorded in the journal's Post. Ref. column before amounts are recorded in the ledger.
False
The steps for posting are to write the date, the journal page number, the amount, and the balance.
False
What does GAAP stand for?
Generally Accepted Accounting Principles
Items found on an Income Statement
Income, Expenses, Net Profit, Net Loss
What type of an account is Accounts Payable?
Liabilities
Revenues minus expenses equals:
Net Income
When revenue > expenses, the there is a ___
Net income
Transferring information from the general journal to the ledger account is known as _________
Posting
What is a service business?
Provides a needed service for a fee
An increase in owner's equity resulting from the operation of a business
Revenue
Temporary Accounts are____
Revenue and expenses
An outstanding check is one that has been issued but not yet reported on a bank statement.
True
Assets - Liabilities = Equity
True
When posting is complete, the Post. Ref. column in the General Journal is completely filled in with account numbers
True
Sales has a credit balance of $2,345. What is recorded to close this account?
a debit of $2,345
What is assets?
any item or property owned by the business
Anything of value that is owned
asset
The account used to summarize the owner's equity in a business
capital
The entry to establish a $200.00 petty cash fund is
debit Petty Cash, $200.00; credit Cash, $200.00
A decrease in owner's equity resulting from the operation of a business
expense
The steps for posting are to write the date, the journal page number, the amount, and the balance.
on the line with a blank Post. Ref. column in the journal
Assets taken out of a business for the owner's personal use.
withdrawals
