Chapter One and Two Study Set Accounting I

Full Disclosure Principle

A company reports details behind financial statements that would impact users' decisions.

journal

A complete record of all transactions made by an organization is kept in a(n) ______.

chart

A list of all ledger accounts and identification numbers, not including account balances, is called a(n) ______ of accounts.

Rationalization

A person justifies fraud or does not see it's criminal nature.

opportunity

A person must be able to commit fraud with a low risk of getting caught.

pressure

A person must feel pressure, or incentive to have commit fraud.

source document

A(n) ______ , such as a bank statement, is objective evidence of transactions and their amounts.

opportunity

Identify the fraud triangle risk factor (Opportunity, pressure, or rationalization): Company computers are not password protected.

opportunity

Identify the fraud triangle risk factor (Opportunity, pressure, or rationalization): No one matches the cash in the register to receipts when shifts end.

Rationalization

Identify the fraud triangle risk factor (Opportunity, pressure, or rationalization): Payroll manager feels she is greatly underpaid.

opportunity

Identify the fraud triangle risk factor (Opportunity, pressure, or rationalization): The business has no cameras or security devices at its warehouse.

opportunity

Identify the fraud triangle risk factor (Opportunity, pressure, or rationalization): There is no supervision of employees handling inventory.

credit

Identify the normal balance (debit or credit) for each of the following accounts: Accounts Payable

Debit

Identify the normal balance (debit or credit) for each of the following accounts: Building

Debit

Identify the normal balance (debit or credit) for each of the following accounts: Cash

Debit

Identify the normal balance (debit or credit) for each of the following accounts: Factory

credit

Identify the normal balance (debit or credit) for each of the following accounts: Haircutting Revenue

Debit

Identify the normal balance (debit or credit) for each of the following accounts: Insurance Expense

Debit

Identify the normal balance (debit or credit) for each of the following accounts: Land

Debit

Identify the normal balance (debit or credit) for each of the following accounts: Office Supplies

credit

Identify the normal balance (debit or credit) for each of the following accounts: Rideshare Revenue

account

Increases and decreases in a specific asset, liability, equity, revenue, or expense are recorded in a(n) ______.

Income Statement

Indicate the financial statement on which each of the following items appears: income statement, statement of owner's equity, or balance sheet: Rent Expense

Income Statement

Indicate the financial statement on which each of the following items appears: income statement, statement of owner's equity, or balance sheet: Rental Revenue

Income Statement

Indicate the financial statement on which each of the following items appears: income statement, statement of owner's equity, or balance sheet: Repairs Expense

Income Statement

Indicate the financial statement on which each of the following items appears: income statement, statement of owner's equity, or balance sheet: Salaries Expense

Balance Sheet

Indicate the financial statement on which each of the following items appears: income statement, statement of owner's equity, or balance sheet: Salaries Payable

Income Statement

Indicate the financial statement on which each of the following items appears: income statement, statement of owner's equity, or balance sheet: Service Revenue

Balance Sheet

Indicate the financial statement on which each of the following items appears: income statement, statement of owner's equity, or balance sheet: Store Equipment

Balance Sheet

Indicate the financial statement on which each of the following items appears: income statement, statement of owner's equity, or balance sheet: Store Supplies

Balance Sheet

Indicate the financial statement on which each of the following items appears: income statement, statement of owner's equity, or balance sheet: Supplies

Income Statement

Indicate the financial statement on which each of the following items appears: income statement, statement of owner's equity, or balance sheet: Supplies Expense

Income Statement

Indicate the financial statement on which each of the following items appears: income statement, statement of owner's equity, or balance sheet: Taxes Expense

Balance Sheet

Indicate the financial statement on which each of the following items appears: income statement, statement of owner's equity, or balance sheet: Taxes Payable

credit

Indicate whether a debit or credit decreases the normal balance of each of the following accounts: Buildings

credit

Indicate whether a debit or credit decreases the normal balance of each of the following accounts: Cash

credit

Indicate whether a debit or credit decreases the normal balance of each of the following accounts: Notes Receivable

Debit

Indicate whether a debit or credit decreases the normal balance of each of the following accounts: Rent Payable

credit

Indicate whether a debit or credit decreases the normal balance of each of the following accounts: Supplies

Debit

Indicate whether a debit or credit decreases the normal balance of each of the following accounts: Unearned Ticket Revenue

Measurement Principle (Cost Principle)

Accounting information is based on actual cost. Actual cost is considered objective.

Proprietorship

Business owned by one person that is not organized as a corporation.

liability

Identify the following accounts as either an Asset, Liability, Equity, Revenue, or Expense Account: Salaries Payable

revenue

Identify the following accounts as either an Asset, Liability, Equity, Revenue, or Expense Account: Sales

expense

Identify the following accounts as either an Asset, Liability, Equity, Revenue, or Expense Account: Selling Expense

revenue

Identify the following accounts as either an Asset, Liability, Equity, Revenue, or Expense Account: Services Revenue

asset

Identify the following accounts as either an Asset, Liability, Equity, Revenue, or Expense Account: Store Supplies

liability

Identify the following accounts as either an Asset, Liability, Equity, Revenue, or Expense Account: Unearned Revenue

expense

Identify the following accounts as either an Asset, Liability, Equity, Revenue, or Expense Account: Utilities Expense

expense

Identify the following accounts as either an Asset, Liability, Equity, Revenue, or Expense Account: Wages Expense

Rationalization

Identify the fraud triangle risk factor (Opportunity, pressure, or rationalization): A worker feels that fellow employees are not honest.

General Ledger

The ______ is a record containing all accounts used by a company, including account balances.

Revenue Recognition Principle

The principle that companies recognize revenue in the accounting period in which the performance obligation is satisfied.

Generally Accepted Accounting Principles (GAAP)

What does GAAP stand for?

General Ledger

What is a record of all accounts and their balances?

Debit

What is the Natural Balance of Asset?

credit

What is the Natural Balance of Revenue?

Expense Recognition Principle

a company records the expenses it incurred to generate the revenue reported