Accounting Midterm

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A blank is often called the book of original entry

Journal

Another term used for recording a business transaction is

Journalizing

The county stationary used to record financial information about specific accounts is a

Ledger account form

A(n) _______ operates to support a cause or an interest.

not-for-profit organization

A blank is an any type of business paper that verifies that a transaction occurred

Source document

If you meant to write $27 but route $72 this mistake is called a

Transposition error

A business should have separate accounts for recording revenue and expenses

True

A partnership can be owned by a more than two individuals

True

Corporations often start out as a sole proprietorships or partnerships

True

Expenses decrease owners equity and recorded as debits

True

Expenses have the opposite effect from revenue on the capital account.

True

For accounting purposes , a business is an entity separate from its owners.

True

GAAP is a way to communicate financial information in a form understood by those interested in the operations and financial condition of the business

True

In a free enterprise system, businesses compete for customers.

True

One advantage of owning your own business is that any financial gain from operating the business is yours.

True

Only businesses that earn a profit will have the economic resources to continue to operate.

True

Temporary capital accounts are extensions of the owners capital account

True

The life of a business is divided into specific periods for reporting purposes.

True

The rules of debit and credit for expense accounts are the same as the rules for asset accounts

True

The toll of all accounts with normal debit balance it should equal the total of all accounts with normal credit balances if the rules of debit and credit were followed correctly

True

The withdrawal of cash by the owner of a business decreases owners equity

True

A(n) _______ operates to earn money for its owners.

for-profit business

Accounts Payable

liability

_______ refers to the way a person uses his or her time, energy, and resources

lifestyle

Accounts Receivable

Asset

A business is earning a profit if the selling price of its product covers the cost of the raw materials needed to make the product.

False

A business owner must always get permission to operate from the state government.

False

All businesses set up their accounting systems in the same manner.

False

All types of businesses sell a product.

False

Basic accounting rules and procedures differ from business to business.

False

Income from fees as a permanent account

False

Liability, expense, and capital accounts all have normal credit balances.

False

Liability, revenue, and withdrawal accounts all have normal credit balances

False

Permanent accounts start each accounting. With a zero balance

False

Revenues increase owners equity in increases in revenues are recorded as debits

False

Service businesses are not intended to operate at a profit.

False

The principles you live by and the beliefs that are important to you are your

values

If the creditors financial claim to property totals $1000 in the owners financial claim the property totals $11,000 the property value is

12,000

The various activities a business completes to organize its accounting records in an orderly fashion is called the blank

Accounting cycle

A blank accounting period begins on January 1 and ends on December 31

Calendar year

If Paul Abdu deposits $30,000 in a checking account and the name of his business the two accounts affected are

Cash and bank and paul abdou capital

A decreased to an expense account is a

Credit

And increase to revenue account is a

Credit

A business transaction involves a purchase on account is considered to be an

Credit transaction

A decrease in the owners capital accounts recorded as a

Debit

A decrease to accounts payable is a

Debit

A decrease to collection fees is recorded as a

Debit

An increase the office furniture is a

Debit

An increase to Mark Cookson withdraws is recorded as a

Debit

An increase to Utilities Expense is a recorded as a ____________________.

Debit

An increase to the withdrawal's account is a

Debit

The left side of a T account is a

Debit

The normal balance for accounts receivable is a

Debit

The normal balance for asset accounts is a

Debit

The normal balance for expense accounts is a

Debit

The normal balance for the owners with drawls account is a

Debit

Each of the following is a business expense accept a payment for

Equipment

The corporation is the easiest form of business to organize.

False

A blank is an accounting period of 12 months in the in the last day of any month except December

Fiscal year

The blank is an all purpose journal used for recording business transactions

General journal

Weather accounts are kept manually in a specific file or electronically on magnetic desks or tapes the ledger is often called a

General ledger

Adding all the debit balance is and all the credit balances and then comparing the two totals to see whether they are equal is called

Proving the ledger

If you were to write $190 as either $19 or $1900 this mistake would be called a

Slide

All of the following account titles are asset titles except

accounts payable

The purchase of a desk on account will increase Office Furniture and will also increase ____.

accounts payable

Cash in bank

asset

Repair Tools

asset

The account accounts receivable is an example of an

asset

computer equipment

asset

office supplies

asset

The word equities refers to claims against the assets of a business by

both creditors and owners

A(n) _________ is work that is built on a foundation of interest, knowledge, training, and experience

career

Errors discovered after posting has taken place require a

correcting entry

A decrease in an asset account is recorded as a

credit

An increase in a liability account is recorded as a

credit

An increase to Gilberto Ferreira capital is a

credit

The normal balance for accounts payable is a

credit

The normal balance for consulting fees is a

credit

The normal balance for the owners capital Account is a

credit

The accounts used by business can be kept on pages or cards which are kept together in a book or file called a

ledger

The sharing of information and advice is called

networking

Roberta Saba, Capital

owner's equity

_______ Can help you identify preferences that will have an impact on your career choice

personal interest tests

Your ____ is the set of unique qualities that makes you different from all other people.

personality

Transferring data from the journal to the ledger is called

posting

A(n) __________ firm provides accounting services to clients such as individuals or businesses

public accounting

A person's ______ are his or her abilities, such as the ability to think creatively or to make decisions.

skills

A periodic report prepared by business to test the equality of total debits and total credits in the ledger is called a

trial balance


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