Fundamental of Accounting – Final Exam Review (Part 1 ) – Flashcards
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Which of the items below is NOT a business entity? a. corporation b. partnership c. proprietorship d. entrepreneurship
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d. entrepreneurship
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Financial reports are used by a. creditors b. management c. investors d. all are correct
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d. all are correct
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Two common areas of accounting that respectively provide information to internal and external users are
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c. managerial and financial accounting
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All of the following are general purpose financial statements a. balance sheet b. statement of owner's equity c. income statement d. cash budget
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d. cash budget
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Which of the following is a mamufacturing business? a. Walmart b. Amazon.com c. Ford Motors d. Delta Airlines
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c. Ford Motors
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The initials for GAAP stand for
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Generally Accepted Accounting Principles
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Within the U.S., the dominant body in the primary development of accounting principles is the
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Financial Accounting Standards Board (FASB)
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Debts owed by a business are referred to as
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Liabilities
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The accounting equation may be expressed as
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Assets - Liabilities = Owners Equity
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Accounts are classified in the ledger
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in accordance with their appearance in the financial statements
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Which of the following groups have a normal debit balance? a. capital and assets b. liabilities and expenses c. assets and expenses d. revenues, liabilities, and capital
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c. assets and expenses
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Which of the following is true about a T account? a. Left hand side of the T-Account is called a credit b. Right hand side of the T-Account is called a debit c. Left hand side of the T-Account is called a debit d. None are true
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c. Left hand side of the T-Account is called a debit
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What are the correct abbreviations for Credit and Debit?
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Debit - Dr Credit - Cr
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The matching concept..
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States that the revenues and related expenses should be reported in the same period
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Deferred revenue is the revenue that is
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not earned but the cash has been recieved
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GAAP requires that companies use the ___ of accounting.
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Accrual basis
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What effect will the adjusting journal entries Depreciation Expense and Accumulated Depreciation have on the accounting records.
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Decreases the net book value
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What is the major difference between the Unadjusted Trial Balance and the Adjusted Trial Balance?
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The Adjusted Trial Balance includes the postings of the adjustments for the period in the balance of the accounts.
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Net Income =
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Revenue - Expenses
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Owner's Equity =
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Capital - Withdraws + Net Income
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Current Assets =
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Total Assets - Equipment
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Working Capital =
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Current Assets - Current Liabilities
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Current Ratio =
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Current Assets /// Current Liabilities
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Short-term liabilities are those that
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will be paid in less than one year
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Which of the following journals is called an all-purpose journal? a. Purchases Journal b. General Journal c. Accounting Journal d. Revenue Journal
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b. General Journal
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Adjusting entries are found in which journal?
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General Journal
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Which of the following types of accounts have a normal credit balance? a. assets and liabilities b. liabilities and expenses c. capital and drawing d. revenues and liabilities
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d. revenues and liabilities
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Deferred expenses have..
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not yet been recorded as an expense
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The adjusting entry to record the depreciation of equipment for the fiscal period is..
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Debit: Depreciation Expense Credit: Accumulated Depreciation
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Notes Receivable due in 350 days on the
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balance sheet in the current assets sections
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Which of the following accounts should be closed to the Income Summary at the end of the year? a. Accumulated Depreciation b. Prepaid Insurance c. Supplies Expense d. Unearned Rent
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c. Supplies Expense
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What indicates that a company earned a net income for the period?
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The sum of the credits exceeds the sum of the debits in the Income Statement columns on the work sheet.
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The primary ledger containing all the balance sheet and income statement accounts is the
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general ledger
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The subsidiary ledger that includes customer account activity is called the
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accounts receivable ledger
