Analysis Of Business Transaction, Accounting Equation, and the Rule of Debit and Credit

Question 1

These are identifications or brief descriptions of items that fall to some kind, class, or nature.

Answer 1

Account Titles

Question 2

These are accounts which are not closed at the end of accounting period.

Answer 2

Balance Sheet/Real/Permanent Accounts

Question 3

These are accounts which are closed at the end of accounting period.

Answer 3

Income Statement/Nominal/Temporary Accounts

Question 4

Refers to all assets that are expected to be realized, sold, or consumed within the enterprise’s normal operating cycle.

Answer 4

Current Assets

Question 5

These are tangible assets which are held by an enterprise for use in production, rental, administrative, etc.

Answer 5

Property, Plant and Equipment

Question 6

Two classifications of assets

Answer 6

Current Assets and Noncurrent Assets

Question 7

Account title used to describe money

Answer 7

Cash

Question 8

Account title used when cash is within premise of the business.

Answer 8

Cash in Hand

Question 9

Account title used when cash is deposited in the bank

Answer 9

Cash in Bank

Question 10

Account title used for money set aside for petty or small expenses.

Answer 10

Petty Cash Fund

Question 11

Account title used for the promissory note that is received by the business from the customer.

Answer 11

Notes Receivable

Question 12

Account title for amounts collectible arising from services rendered.

Answer 12

Account Receivable

Question 13

It as a contra-account shown as a deduction to accounts receivable.

Answer 13

Allowance for Bad Debts

Question 14

These are accounts deducted from related accounts.

Answer 14

Contra Accounts

Question 15

An account title for the site where the building used as office or store is constructed.

Answer 15

Land

Question 16

These are financial long-term obligations of an enterprise which are payable for more than one year.

Answer 16

Non-Current Liabilities

Question 17

An account title for financial obligation of an enterprise.

Answer 17

Accounts Payable

Question 18

A financial obligation of an enterprise which requires a fixed on tangible property to be pledged as collateral to ensure payment.

Answer 18

Mortgage Payable

Question 19

An accounting device used to summarize the effect of changes in Assets, Liabilities, and Owner’s Equity.

Answer 19

Account

Question 20

The simplest form of the accounts.

Answer 20

T-Account

Question 21

The left side-hand of the T-account.

Answer 21

Debit Side

Question 22

The right side-hand of the T-account.

Answer 22

Credit Side

Question 23

System used in accounting which records the dual effect of a business transaction.

Answer 23

Double-Entry System

Question 24

Most basic tool of accounting.

Answer 24

Accounting Equation (Assets=Liabilities+Capital)

Question 25

It is a form used to analyze the effect of business transaction to the assets, liabilities, or owner’s equity of the business entity.

Answer 25

Financial Transaction Worksheet

Question 26

These are the economic activities of a business which can be measured and expressed in terms of money.

Answer 26

Business Transaction