Accounting Final
buying items and paying for them at a future date is a. not recommended b. not a common business practice c. illegal d. common business practice
D
when a business pays cash for supplies, a. liabilities increase b. assets and liabilities increase c. assets and liabilities decrease d. assets increase and assets decrease
D
when cash is decreased and supplies are increased by an equal amount, a. increase in liabilities b. increase in owner's equity c. decrease in liabilities d. liabilities and capital are not changed
D
when cash is paid on account, a. 2 assets are changed b. one asset and owner's equity are changed c. one liability and owner's equity are changed d. one asset and one liability are changed
D
T/F: an accounting device used to analyze transactions is a T account
T
When cash is paid for supplies, the supplies account is increased by a debit.
T
a business that performs an activity for a fee is a service business.
T
a proprietorship is also known as a sole proprietorship.
T
a transaction for the sale of goods or services results in an increase in owners equity.
T
a transaction that increases accounts receivable and increases owner's equity is a sale on account.
T
accounts receivable (zwilling Co) are increased by debit
T
after each transaction, the accounting equation must remain in balance.
T
balance of an account increases on the same side as the normal balance side
T
before transaction is recorded in business records, analyzed to determine which accounts changed and how
T
each asset account has a normal debit balance
T
each liability account has a normal credit balance
T
each transaction changes the balance in at least 2 accounts
T
increase in expense are recorded as debits bc they decrease owner's capital account
T
normal balance side of an asset account is based on location of account in accounting equation
T
regardless of when your payment is made, when services are sold the revenue should be recorded at the time of the sale.
T
the accounting equation must be in balance to be correct.
T
the amount in an account is an account balance.
T
the balance of a drawing account represents the total value of assets taken out of a business by the owner
T
the relationship among assets, liabilities, and owner's equity can be written as an equation.
T
when a company makes a sale of $300.00, assets and owner's equity increase by $300.00
T
when items are bought and paid for at a future date, another way to state this is to say these items are bought on account.
T
device used to analyze transactions
T account
amount in an account
account balance
planning, recording, analyzing, and interpreting financial info
accounting
equation showing relationship among assets, liabilities, and owner's equity
accounting equation
items of value owned by business as cash, buildings, merchandise inventory, accounts receivable.
asset
account used to summarize the owner's equity in a business
capital
list of accounts used by a business
chart of accounts
an amount recorded on the R side of the T account
credit
amount recorded on left side of T account
debit
the principles of right and wrong that guide an individual in making decisions
ethics
decrease in owner's equity resulting from the operation of a business
expense
Reports that summarize financial condition and operations of a business
financial statements
amount owed by a business; debt
liability
side of an account thats increased
normal balance
the amount remaining after the value of all liabilities is subtracted from assets
owner's equity
business owned by one person
proprietorship
increase in owner's equity resulting from sale
revenue
revenue transactions for which cash will be received at later date
sale on account
business that performs an activity a fee
service business
business activity that changes assets, liabilities, or owner's equity
transaction
assets taken out of business for owner's personal use
withdrawals
A transaction that increases accounts recievable and increases owner's equity is a. revenue b. withdrawal c. expense d. none of the above.
A
When cash is received from sales, the change in owner's equity is usually a. recorded in a separate revenue account b. recorded into owner's capital account c. recorded as interest revenue d. recorded on debit side always
A
if cash is increased by $2,000 when the owner invests cash into the business the capital is a. increased by 2,000 b. decreased by 2,000 c. increased by 1,000 d. not changed
A
normal balance side of asset account is a. debit b. credit c. decrease d. right
A
prepaid insurance a. an asset account b. liability account c. owner's equity account d. none of the above
A
total assets are $19,500. Cash is paid for $1,500 of supplies. total assets are now a. 19,500 b. 21,000 c. 18,000 d. 22,500
A
when a business buys supplies on account, assets a. increase b. increase and liabilities decrease c. decrease d. decrease and liabilities decrease
A
when business pays for insurance, prepaid insurance is a. increased by D b. increased by C c. decreased by D d. decreased by C
A
a transaction that increases cash and decreases owner's equity is a. revenue b. withdrawal c. expense d. none of the above
D
When supplies are bought on account, the business to whom money is owed is a. asset b. liability c. equity d. capital
B
if amount recorded on the side of T account opposite the normal balance side, the account balance is a. increased b. decreased c. unaffected d. correct
B
recording and reporting a business's financial info separately from the owner's financial info is an application of the accounting concept a. unit of measurement b. business entity c. going concern d. seperation of records
B
right side of T account? a. debit b. credit c. normal balance d. equity
B
the amount remaining after the value of all liabilities is subtracted from the value of all assets is a. the fair market value of the business b. owners equity c. financial report d. transaction
B
total assets are $22,000. Supplies are bought on account for $1,500. the total assets are now a. 22,000 b. 23,500 c. 20,500 d.25,000
B
when a transaction changes both sides of the accounting equation, a. an increase on the R must offset a decrease on the L b. an increase on the L must equal an increase on the R c. neither side changes d. none of the above
B
when a transaction changes only one side of the equation, if one account is increased, the other account on the same side must a. increase b. decrease c. not change d. none of the above
B
when business buys an asset on one date and agrees to pay on a later date, the transaction is a. delayed b. on account c. increased d. none of the above
B
when owner invests cash into business, owner's capital account a. increased by D b. increased by C c. decreased by D d. decreased by C
B
Proprietorships a. owned and controlled by 2 or more people who have a written agreement b. account for the largest % of business revenues in the US c. easiest form of business to start d. owners can lose no more money than the money they've invested directly into the business
C
a record summarizing all info pertaining to a single item in an accouting equation is a. debit b. credit c. account d. T account
C
business has total cash of $30,000. then it pays $1,000 on account, buys insurance of $750, buys supplies for $1,200 and pays $300 more on account. the balance of the cash account is now a. 25,750 b. 26,750 c. 28,700 d. none
C
the account used to summarize the owner's equity in a business is a. equity b. owner's equity c. capital d. liability
C
the accounting equation is most often stated as a. assets= liabilites b. cash= assets c. assets=liabilities+ owners equity d. liabilities + assets= owner's equity
C
the asset most commonly withdrawn by business owners is a. insurance b. supplies c. cash d. contributions
C
to start a business, the owner invested $8,000, bought $1,500 of supplies, insurance of $500, and bought an additional $300 of supplies on account. Total assets a. 5,700 b. 7,000 c. 8,300 d. 6,000
C
when business pays cash on account, liability is a. increased by D b. increased by C c. decreased by D d. decreased by C
C
when services sold on account for $500 a. sales decreased by D & AccRec increased by C b. sales increased by D & AccRec increased by C c. sales increased by C & AccRec increased by D d. sales increased by D & AccRec increased by D
C
Anything of value that is owned is a liability.
F
Christine Jones, Drawing is increased by credit
F
L side of liability account is normal balance side bc liabilities are on left side of the accounting equation
F
T/F: When an owner invests cash in a business, owner's equity decreases.
F
The accounting equation is most often stated as: assets+liabilities=owner's equity.
F
When an account on one side of the accounting equation is increased, there must also be an increase on the other side to keep the equation in balance.
F
accounts payable are increased by debit
F
amount recorded on the L side of T account is a credit
F
asset accounts are listed on the right side of the accounting equation.
F
asset accounts increase on the credit side
F
cash is an asset account with a normal credit balance
F
drawing account is decreased by debits and increased by credits
F
increase in expense are recorded directly in owner's capital account
F
increase in revenue are recorded as debits bc they increase the owner's capital account
F
normal balance side of accounts receivable is credit
F
revenue from a sale on account should be recorded when the payment is received.
F
the capital account is a liability account.
F
the capital account is the owner's liability account
F
the sum of the asset and liabilities of a business always equals the investment of the business owner.
F
to summarize withdrawal info separately from other records, owner withdrawal transactions are recorded in owner's capital account
F
total debits and credits for a transaction do not have to equal
F
when a company pays insurance premiums in advance to an insurer, it records the payment as a liability because the insurer owes future coverage.
F
when cash is paid for expenses, the business has less cash; therefore, the asset account Cash is decreased and the owner's equity account is increased.
F
when cash is paid for supplies, assets increase and liabilities decrease.
F
when cash is paid on account, a liability is increased.
F