Proctored Accounting Exam Video Quiz Answers
Debit
Cash is an asset. Assets are on the left side of the accounting equation. The left side is called the debit. Therefore, the increase side of cash is a ________________.
Cash, Supplies, Land
Click on all of the following that are assets.
Must be journalized and posted.
Closing entries
$212,000
Donner Company is selling a piece of land adjacent to its business premises. An appraisal reported the market value of the land to be $220,000. The Focus Company initially offered to buy the land for $177,000. The companies settled on a purchase price of $212,000. On the same day, another piece of land on the same block sold for $232,000. Under the cost concept, at what amount should the land be recorded in the accounting records of Focus Company?
Prepare a Trial Balance
Each time journalizing and posting takes place, the next step is ALWAYS
They have a negative impact on owner's equity; therefore, they work the opposite and increase with a debit.
Even though Expenses and owner's drawing are on the right side of the accounting equation, they do not increase on the credit side. Why?
The entity is an individual economic unit for which data are recorded, analyzed, and reported.
If an owner pays a personal expense, it is not recorded by the business. Therefore, the business entity would be best described by:
Bucket
In the "Steps of the Accounting Cycle" video, a picture of a _________ was used to illustrate accounts.
H & R Block journalizes the events that impact their finances, while Ms. Bergeron journalized events of her morning.
In the video, a journal example was shown for Ms. Bergeron. What is the main difference in the journal for Ms. Bergeron and the journal for H & R Block?
Net Income of $44,580
In the video, it was determined that the most accurate net income/loss was
$7,700
In the video, we purchased supplies for $10,000 and were told that we have $2300 of supplies that have not been used up. Therefore, we should expense in the current period how much?
When earned, regardless of whether the cash has been received.
In the video, when adhering to the revenue recognition concept, revenue would be recognized
1.) Income Statement 2.) Statement of Owner's Equity 3.) Balance Sheet
Indicate in which order the financial statements MUST be prepared.
$115,000
On May 20, White Repair Service extended an offer of $108,000 for land that had been priced for sale at $140,000. On May 30, White Repair Service accepted the seller's counteroffer of $115,000. On June 20, the land was assessed at a value of $95,000 for property tax purposes. On July 4, White Repair Service was offered $150,000 for the land by a national retail chain. At what value should the land be recorded in White Repair Service's records?
Matching
One of the most important concepts in accounting focuses on timing. For example, a business may pay $200 for a pair of blue jeans (merchandise) in January, but until that business sells those blue jeans, the business will not categorize the $200 as an expense. Instead, it will be an asset (merchandise) because it will benefit the business in the future. The benefit is SELLING it. Therefore, once it is sold, the business will record the expense. This process "matches" the expense into the same period as the sale. What principle requires this $200 to be an asset until it is sold?
- A left side and a right side - A debit side and a credit side - An increase side and a decrease side
A T account always has ________________.
Heater to be used in her business.
A business owner went to Walmart and purchased school supplies for her children and a portable heater to be used in her business. The business entity concept indicates which transaction should be recorded by her business.
It will benefit the company in future periods, and therefore has not been used up.
A company often pays insurance that will provide the company insurance coverage for 6 months or longer. When the company pays for the insurance, the account that is debited is called a prepaid expense. This is an asset, not an expense. Why?
Credit
Accounts payable is a liability. Liabilities are on the right side of the accounting equation. The right side is called the credit. Therefore, the increase side of accounts payable is a ________________.
Cash Basis Accounting
Accrual Basis of accounting is an overall broad category that encompasses the idea that we record revenue when earned and expenses into the period we incurred (used) them WITHOUT REGARD TO WHEN CASH IS PAID. Therefore, the opposite of Accrual Based Accounting is known as
- $80,000 that we earned and received - $2,500 that we earned but have not received
Adhering to the revenue recognition concept, the profit for the current period should include:
At the end of the period.
Adjusting journal entries typically are recorded
Two; Increase; Capital
An example of a transaction is Owner deposited money into his/her business account. Please complete the following paragraph using the drop down options to make the paragraph correct. Every transaction must affect at least one accounts . In this example, the word "deposited money" tell us that one of the entries will be an increase to cash. The fact that it was the owner placing personal money into his/her business tells the student that the other entry is an increase to Fees Earned .
Debit Insurance Expense; Credit Prepaid Insurance
An example of an adjusting journal entry is
Debit Unearned Fees and Credit Fees Earned.
An example of an adjusting journal entry is
Increase
As a component of owner's equity, capital (used for owner's investments) would __________ owner's equity.
Decrease
As a component of owner's equity, drawing would __________ owner's equity.
Decrease
As a component of owner's equity, expenses would __________ owner's equity.
Increase
As a component of owner's equity, revenues would __________ owner's equity.
Are called permanent or real accounts.
Balance sheet accounts
In accounting, "normal balance" refers to the expected or usual side (debit or credit) in which an account's balance increases. It is based on the accounting equation, which states that assets equal liabilities plus equity. To remember the rules of debits and credits, the sentence "After eating dinner, let's read comics" can be used as a mnemonic device. Each word in the sentence corresponds to the first letter of an account classification and its normal balance: "after" represents "assets", "eating" represents "expenses", "dinner" represents "dividends", "let's" represents "liabilities", "read" represents "revenues", and "comics" represents "capital". By associating these words with the account classifications and their normal balances, students can create a mental link to help them remember the appropriate side (debit or credit) for recording transactions in those accounts.
Please describe what "normal balance" means in accounting. Also, briefly explain how the sentence "After eating dinner, let's read comics" can help students memorize the rules of debits and credits.
Subtract 1/5 of the cost in this period, and keep the remaining 4/5 as an asset since it will benefit of for 4 more years.
Regarding the purchase of sewing machines, to match the expense into the proper period, we should:
Credit
Revenues and Capital are on the right side of the accounting equation. The right side is called the credit side. Therefore, the increase side of revenues and capital is _____________.
Income Statement
Revenues less expenses = Net income may see seen on which financial statement?
They allow users of the financial statements to compare company to company consistently.
What is the purpose of accounting principles and concepts?
Cash
What is the first account that should be listed in the post-closing trial balance?
Copying
What word was used to describe the process of posting the debits and credits from the journal to the ledger accounts?
Reliability or Verifiability Concept
Which concept requires that the amounts recorded in the accounting records be based on objective evidence?
Fees Earned
Which of the accounts below would be closed by posting a debit to the account?
Rent Revenue, Fees Earned, Miscellaneous Expense
Which of the following account groups includes temporary (nominal) accounts?
Accounts Payable
Which of the following accounts is a liability?
Service Revenue
Which of the following accounts should be closed to the capital account at the end of the year?
Fees Earned
Which of the following accounts will be debited in the closing entry at the end of the year?
Business Entity Concept
Which of the following concepts relates to separating the reporting of business and personal economic transactions?
Going Concern Principle
Which principle requires a business to make financial decisions based on the assumption that the company will remain operating for the foreseeable future?
1.) Unadjusted Trial Balance 2.) Adjusted Trial Balance 3.) Post-Closing Trial Balance
Within the 10 steps of the accounting cycle, 3 different trial balances are prepared. Place the trial balances in order in which they are prepared.
True
T/F- All income statement accounts will be closed at the end of the period.
True
T/F- Assets, liabilities, and owner's capital are permanent (real) accounts and do not get closed at the end of the period.
True
T/F- The cost concept is the basis for entering the purchase price into the accounting records.
True
T/F- The post-closing trial balance will generally have fewer accounts than the trial balance.
Assets = Liabilities + Owner's Equity
The accounting equation is
Balance Sheet
The accounting equation is assets = liabilities + owner's equity. These are the same accounts that are reported on the
- Updates the supplies account balance to reflect supplies on hand - Updates the supplies expense account to show the amount used up during the period
The entry Debit Supplies Expense Credit Supplies Achieves the following:
Statement of Owner's Equity
The four components of owner's equity are added/subtracted with beginning capital to arrive at ending capital in which financial statement?
