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    Accounting Test Bank

    Uploaded by

    leah_may6
    The document provides definitions and explanations of key accounting terms related to financial statements, including: - The income statement reports revenues and expenses over a period of time like a year or month. The balance sheet reports assets, liabilities, and equity at a point in time. The statement of cash flows reports cash inflows and outflows. - Under accrual accounting, revenues are reported when goods or services are delivered, and expenses are reported when used rather than when cash is received or paid. - The three main financial statements are the income statement, balance sheet, and statement of cash flows.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd

    Accounting Test Bank

    Uploaded by

    leah_may6
    51 views32 pages
    The document provides definitions and explanations of key accounting terms related to financial statements, including: - The income statement reports revenues and expenses over a period of time like a year or month. The balance sheet reports assets, liabilities, and equity at a point in time. The statement of cash flows reports cash inflows and outflows. - Under accrual accounting, revenues are reported when goods or services are delivered, and expenses are reported when used rather than when cash is received or paid. - The three main financial statements are the income statement, balance sheet, and statement of cash flows.

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    The document provides definitions and explanations of key accounting terms related to financial statements, including: - The income statement reports revenues and expenses over a period of time like a year or month. The balance sheet reports assets, liabilities, and equity at a point in time. The statement of cash flows reports cash inflows and outflows. - Under accrual accounting, revenues are reported when goods or services are delivered, and expenses are reported when used rather than when cash is received or paid. - The three main financial statements are the income statement, balance sheet, and statement of cash flows.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    51 views32 pages

    Accounting Test Bank

    Uploaded by

    leah_may6
    The document provides definitions and explanations of key accounting terms related to financial statements, including: - The income statement reports revenues and expenses over a period of time like a year or month. The balance sheet reports assets, liabilities, and equity at a point in time. The statement of cash flows reports cash inflows and outflows. - Under accrual accounting, revenues are reported when goods or services are delivered, and expenses are reported when used rather than when cash is received or paid. - The three main financial statements are the income statement, balance sheet, and statement of cash flows.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 32

    The financial statement that reports the

    revenues and expenses for a period of


    time such as a year or a month is the
    Balance Sheet
     Income Statement
     Statement Of Cash Flows
    The financial statement that reports the
    assets, liabilities, and stockholders'
    (owner's) equity at a specific date is the
    Balance Sheet
     Income Statement
     Statement Of Cash Flows
    Under the accrual basis of
    accounting, revenues are reported in
    the accounting period when the
    Cash Is Received
     Service Or Goods Have Been Delivered
    Under the accrual basis of
    accounting, expenses are reported in
    the accounting period when the
    Cash Is Paid
     Expense Matches The Revenues Or Is Used Up
    Revenues minus expenses
    equals __________.
    Resources owned by a company (such as
    cash, accounts receivable, vehicles) are
    reported on the balance sheet and are
    referred to as __________.
    Assets are usually reported on the
    balance sheet at which amount?
    Cost
     Current Market Value
     Expected Selling Price
    Obligations (amounts owed) are
    reported on the balance sheet and
    are referred to as __________.
    Liabilities often have the
    word __________
     in their account title.
    Unearned Revenues is what type
    of account?
    Asset
     Liability
     Stockholders' (Owner's) Equity
    Accounting entries involve a
    minimum of how many
    accounts?
    One
     Two
     Three
    The listing of all of the accounts
    available for use in a company's
    accounting system is known as
    the __________.
    Assets minus liabilities
    equals __________.
    Which term is associated with
    "left" or "left-side"?
    Debit
     Credit
    When cash is received, the
    account Cash will be
    Debited
     Credited
    When a company pays a bill, the
    account Cash will be
    Debited
     Credited
    What will usually cause an asset
    account to increase?
    Debit
     Credit
    Entries to expenses such as Rent
    Expense are usually
    Debits
     Credits
    Entries to revenues accounts such
    as Service Revenues are usually
    Debits
     Credits
    A company receives $500 of cash as an
    additional investment in the company by its
    owner, Mary Smith. The company's Cash
     account is increased and 
    Mary Smith, Capital is increased. Should
    the $500 entry to the Cash account be
    a debit?
    Yes
     No
    A company using the accrual method of
    accounting performed services on account in
    August. The services were for $2,000 and the
    company gave the customer credit terms that state
    the amount is to be paid to the company in
    September. Assuming that the company prepares
    monthly income statements, what will be the
    account debited for $2,000 in August?
    Cash
     Accounts Receivable
     Service Revenue
    In September when the company
    receives the $2,000 from the customer,
    which account should the
    company debit?
    Cash
     Accounts Receivable
     Service Revenue
    In September when the company
    receives the $2,000 from the customer,
    which account should the
    company credit?
    Cash
     Accounts Receivable
     Service Revenue
    A contra-asset account such as
    Accumulated Depreciation will
    likely have which balance?
    Debit
     Credit
    A contra-liability account such as
    Discount on Notes Payable will
    likely have which balance?
    Debit
     Credit
    Which of the following names is
    NOT associated with the income
    statement?
    P&L
     Statement Of Financial Position
     Statement Of Operations
    The income statement heading
    will specify which of the
    following?
    A POINT In Time
     A PERIOD Of Time
    On December 1 a company borrowed $100,000 at
    12% per year. The interest will be paid quarterly,
    with the first payment due on March 1. What
    should the company report on its income
    statement for December?
    Nothing
     Interest Expense Of $1,000
    Which of the following
    would not be a current asset?
    Accounts Receivable
     Land
     Prepaid Insurance
     Supplies
    On December 1, ABC Co. hired Juanita
    Perez to begin working on January 2 at a
    monthly salary of $4,000. ABC's balance
    sheet of December 31 will show a liability of
    $4,000
     $48,000
     No Liability
    ABC Co. has current assets of $50,000 and total
    assets of $150,000. ABC has current liabilities
    of $30,000 and total liabilities of $80,000. What
    is the amount of ABC's owner's equity?
    $20,000
     $30,000
     $70,000
     $120,000

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