FINAL EXAM- ACCOUNTING.
Hamilton Lawn Service incurred $500 as labor expense and promised to pay the labor agency within 30 days. Which of Hamilton's accounts would increase as a result of this transaction?
Accounts Payable
Business renders services to a customer for $26,000 on account. Which of the following accounts will be debited
Accounts Receivable
Lush Lawns earned $1,000 for lawn mowing services rendered. The customer promised to pay at a later time. Which of the following accounts increased as a result of this transaction?
Accounts Receivable
Which of the following is an asset account
Accounts Receivable
Entry to record depreciation includes a credit to
Accumulated Depreciation account.
Sum of all the depreciation Expense recorded to date for a depreciate asset is called
Accumulated depreciation
An adjusting entry that credits Salaries Payable is an example of
Accused expense
An expense that has been incurred but not yet paid is called a
Accused expense
Which of the following is a collection of all the accounts, the changes in those accounts, and their balances?
Ledger
Assets of Sunlight Company are $270,000 and equity is $90,000. Liabilities will be
$180,000
The assets of Moon Company are $150,000 and liabilities are $90,000. The equity will be:
$60,000
A business makes a cash payment to a supplier on account ( for office supplies which were purchased earlier.) Which of the following accounts will be debited?
Accounts Payable
Economic resources of a business such as furniture, building, and land are its?
Assets
What is the Accounting Equation
Assets = Liabilities + Equity
Which of the following groups of accounts normally have a debit balance?
Assets and Expenses
A sole proprietor makes a cash withdrawal from his company. How does this transaction affect the accounting equation
Assets decrease; equity decrease.
Which of the following financial statements reports that total assets are equal to total liabilities plus total owners equity?
Balance Sheer
Depreciate assets cost minus accumulated Depreciation is called
Book value
Which of the following accounts decreases with a credit?
Cash
Which of the following accounts increases with a debit?
Cash
According to the _____, the acquired assets should be recorded at the amount actually paid rather than at the estimated market value.
Cost Principle
Statement of owner's equity shows the changes in Owner's capital. Which one of these statements is true?
Decreases in Owners Equity result from net losses.
Entry to record depreciation includes a debit to
Depreciation Expense account.
Owners claim to the assets of the business is called?
Equity
Which type of account is Owner's Capital?
Equity
Which of the following accounting elements does the matching principle help to match.
Expenses and revenues.
GAAP?
Generally Accepted Accounting Principles
Which of the following is the correct order of preparation of financial statements?
Income Statement --> Statement of Owners Equity --> Balance Sheet --> Statement of cash flows.
Which of the following groups of accounts normally have a credit balance?
Liabilities and owners equity
Which of the following groups of accounts will decrease with a debit?
Liabilities and owners equity
A debt that a business owes to an outside party is called
Liability
Unearned Revenue is classified as a _______ account.
Liability
Which of the following accounts decreases with a debit?
Notes Payable
Which of the following is a liability account?
Notes Payable
Which of the following would result in an increase in income under the accrual method of accounting but would not result in an increase in income under the cash basis accounting?
Performance of services on account.
Which of the following is an asset account?
Prepaid Expense
The account title used for recording the prepayment of rent for a building in the future is?
Prepaid Rent
Advance cash payments of future expenses are called
Prepaid expense.
Nuptial Inc. paid the rent for the current month in cash. Which of the following account titles will be debited?
Rent Expense
Viva Inc. produces and sells coffee beans. This month it earned $500 by selling coffee beans to Jeffery Inc. The $500 received by Viva is its?
Revenue
The earnings that result from delivering goods or services to customers are called?
Revenues
Employees of Robert Rogers, CPA, worked the last two weeks of December. They received their paychecks on Jan 2. Which of the following accounts should appear on the balance sheet as of Dec 31 as per the matching principle.
Salaries Payable.
Which of the following accounts increases with a credit?
Smith, Capital
Which of the following is the correct formula for calculation depreciation under the straight line method?
Straight line depreciation = (cost + residual value) ÷ useful life.
Accused revenue is revenue that
The business has earned, but not yet collected in cash.
Income Statement presents a summary of an entity's revenues and expenses for a period of time. Which of the following statements is true of an income statement?
There is new income when total revenues are greater than total expenses
Which of the following account terms assumes that a business's activities can be divided into small segments and financial statements can be prepared for specific peruods, such as a month, quarter, or a year?
Time period concept
Which of the following is a liability account?
Unearned Revenue
Advance cash receipts of future revenues are called
Unearned revenues
If a company is using the accrual basis accounting method, when should it record it's earned revenue?
When services are rendered, even though services may be received at a later date.
