Accounting Concepts and Measurement Assessment

Question 1

Three
tasks a bookkeeper might do:

Answer 1

Handle bank feeds and reconcile bank accounts, managing accounts receivable/payable, record financial transactions

Question 2

Mary Smith is the owner and operator of Smith Construction. At the end of the company’s accounting period, December 31 2020, Smith construction has assets totaling $760,000 and liabilities totaling $240,000. What would Mary’s owner equity be as of December 31, 2020.

Answer 2

$520,000

Question 3

Mike Anderson is the owner and Operator of Anderson consulting. At the end of 2019, the company’s assets totaled $500,000 and liabilities totaled $175,000. Assuming the over the 2020 fiscal year, assets increased by $120,000 and liabilities increased by $72,000, use the accounting equation to Mike owners equity will be as of December 31, 2020.

Answer 3

$373,000

Question 4

Maria Garcia owns a software accounting firm. At the beginning of 2019, the company’s assets totaled $800,000 and liabilities $185,000. Assuming that Assets decreased by $52,000 and liabilities increased by $24,000, whats the owner equity at the end of 2020.

Answer 4

$539,000

Question 5

The accounting equation can be defined as

Answer 5

Assets = Liability + Equity

Question 6

What the company owns or controls and expects to gain value from can be defined as:

Answer 6

An Asset

Question 7

What the company owes to others is defined as:

Answer 7

A liability

Question 8

The owner’s stake in the company is defined as

Answer 8

Equity

Question 9

A way of book keeping that tracks which accounts increase and which decrease for a certain transaction is known as

Answer 9

Double entry bookkeeping

Question 10

A credit in double entry accounting is

Answer 10

A decrease in assets/expenses and an increase in liabilities/owner’s equity.

Question 11

A debit in double entry accounting is

Answer 11

An increase in assets/expenses and decrease in liabilities/owners equity

Question 11

An owner invest $1000 in a company. In your journal entry, which account do you credit?

Answer 11

Owner’s equity account

Question 12

You purchased inventory from your vendor and paid in cash. In your journal entry, which account would you debit?

Answer 12

Inventory account

Question 13

A sales manager purchases office supplies with the company credit card. In your journal entry, which account do you credit?

Answer 13

Accounts payable

Question 14

The company pays off the credit card bill. This transaction impacts the accounts payable and the cash accounts. In your journal entry, which account do you credit?

Answer 14

Cash account

Question 15

Debits are always represented on what side of a T-chart?

Answer 15

The left.

Question 16

Short-term Investments would be an example of what kind of account?

Answer 16

An asset account

Question 17

Accounts payable would be an example of what kind of account?

Answer 17

A liability account

Question 18

Accounts receivable would be an example of what kind of account?

Answer 18

An asset account.

Question 19

True or False: Your client was paid in cash for a service that they provided. They’ve asked you to leave it off their financial records. Since you are employed by the client, you should do what they ask.

Answer 19

False