Accounting mid-term study guide questions 1-49

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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


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