Accounting 211 Exam 1

Question 1

Return on Assets

Answer 1

Net income/ Average total assets

Question 2

Accounting equation

Answer 2

Assets=Liabilities + Equity

Question 3

Fraud triangle

Answer 3

Opportunity, Pressure, and Rationalization

Question 4

Source douments

Answer 4

Identify and describe transactions and event entering the accounting process

Question 5

3 major types of business activies

Answer 5

Financing, investing, and operating.

Question 6

Net income

Answer 6

When income is greater than loss

Question 7

Net loss

Answer 7

When loss is greater than income

Question 8

Book value

Answer 8

The difference between the cost of an asset and the accumulated depreciation for that asset

Question 9

Operating ativities

Answer 9

Uses resources to develop, purchase, produce, distribute, and market products and services

Question 10

A financial statement providing info that helps users understand a company’s financial status and assets, liabilities, and equity is called a(n)

Answer 10

Balance sheet

Question 11

Debt ratio

Answer 11

Total liabilities/ Total assets

Question 12

Ending retained earnings

Answer 12

Beginning retained earnings + revenues - expenses - dividends

Question 13

What is an asset?

Answer 13

Resources a company owns or controls and are expected to have future benefits

Question 14

Asset example

Answer 14

Cash, supplies, equipment, land, and accounts receivable

Question 15

What is a liability?

Answer 15

Creditors claims on assets, products, or services

Question 16

Liability examples

Answer 16

Anything with”Payable”

Question 17

What is equity

Answer 17

Owners claim on assets

Question 18

Equity examples

Answer 18

Dividends, common stock, expenses, and revenues

Question 19

Accounts with normal Dr. balance

Answer 19

DrEAD: Expense, assets, dividends

Question 20

Accounts with normal Cr. balance

Answer 20

Liabilities, Common Stock, revenues

Question 21

4 Financial statements (in order)

Answer 21

Income statement, statement of retained earnings, balance sheet, and statement of cash flows

Question 22

4 accounting principles

Answer 22

Measurement principle, revenue and expense recognition, full disclosure

Question 23

Accounting assumptions

Answer 23

Going-on concern, Monetary unit, time period, business entity

Question 24

Compound entry

Answer 24

Affects 3 or more accounts

Question 25

Profit margin

Answer 25

Net income/ net sales

Question 26

Accounting Cycle

Answer 26

Analyze transactions, journalize, post, prepare unadjusted trial balance, adjust and post accounts, prepare adjusted trial balance, prepare financial statements, close accounts, prepare post -closing trial balance, reverse and post (Optional)

Question 27

Investing activities

Answer 27

Buying and selling long-term assets (Land and equipments)

Question 28

Financing Activities

Answer 28

Long-term borrowing and repaying of cash