Accounting

Question 1

There are two bases for accounting; what are they?

Answer 1

cash and accrual

Question 2

What is the amount of assets remaining after all liabilities are paid off? (The true ownership value)

Answer 2

equity

Question 3

Assets minus all liabilities equals what?

Answer 3

net worth

Question 4

a ____________ provides a good, detailed, overview of how current income compares with income received last week?

Answer 4

Sales Journal

Question 5

sales records are needed

Answer 5

for some insurance reports

Question 6

check registers

Answer 6

balance the bank accounts

Question 7

builders need _________ to pay small expenses that arise day to day

Answer 7

petty cash

Question 8

rent, phone, utilities and office supplies are considered _______ expenses

Answer 8

overhead

Question 9

___________ must be presented when apply for performance bonds and for loan applications

Answer 9

financial statements

Question 10

_______ is the simplest bookkeeping method used

Answer 10

double entry

Question 11

_________ is entered on the left side of a T account

Answer 11

Debits

Question 12

_________ is entered on the right side of a T account

Answer 12

credit

Question 13

general ledger

Answer 13

summarizes all business operations
is separate form subsidiary ledgers
is out of balance if there is a posting error

Question 14

A Financial statement ____________

Answer 14

summarizes the general ledger

Question 15

comparisons of net worth to liabilities used by bankers considering load applications are called?

Answer 15

ratios

Question 16

__________ are funds withheld form payments as an incentive for timely job completion

Answer 16

retainage

Question 17

it is important to watch _______, since it can alert the business to the accumulation of hard to collect accounts

Answer 17

trends

Question 18

the most popular and widely used test for cash position is the _______?

Answer 18

current ratio

Question 19

__________ summarizes the existing condition of a business

Answer 19

balance sheet

Question 20

the satisfactory minimum current ration which compares current assets to current liabilities is

Answer 20

2:1

Question 21

a ratio used to determine the ability to pay current debts without including inventory

Answer 21

quick assets

Question 22

working capital is

Answer 22

available current assets

Question 23

These are called the books of ORIGINAL entry and include as much information as possible recorded with each transaction.

Answer 23

journals

Question 24

These are called the books of FINAL entry and include a summary of information from the journals.

Answer 24

general ledger

Question 25

Financial ratios calculated for comparison purposes and used to make business decisions are called ___.

Answer 25

financial statement analysis