Busi 101 Flashcards
The father of double entry bookkeeping
Luca Pacioli
The group that primarily determines how accounting is practiced in the US
FASB
Which statement covers a point in time?
Statement of Retained Earnings
Assets and Liabilities equation
Assets=Liabilities + Owners equity
A debit increases the balance of?
Assets and Dividends
A credit decreases the balance of
Expenses and Dividends
Which of the following is an example of a real/permanent account? Dividends, Rent Revenue, Gain on sale of land, Prepaid Insurance, Supplies Expense
Prepaid Insurance
Which of the following is an example of a nominal/temporary? Accumulated Depreciation, Interest Revenue, Prepaid Rent Expense, Interest Payable, Available for Sale Securities
Interest Revenue
What’s an example of a deferral?
Unearned Revenue, Prepaid Interest Expense
What’s an example of an accrual?
Dues Payable
The adjusting entry for the expiration of a prepaid expense involves a?
Expense Account and an Asset Account
The adjusting entry for the earning of revenue received in advance involves a?
Debit to Liability and
Credit to Revenue
The adjusting entry for recognition of accrued expense involves a?
Expense Account and
Liability Account
The adjusting entry for recognition of accrued revenue involves a?
Debit to Asset and
Credit to Revenue
Equation for Working Capital
Current Assets - Current Liabilities
Current ratio formula
Current Assets / Current Liabilities
In a bank reconciliation outstanding checks are
Subtracted from the bank balance
In a bank reconciliation an EFT collection listed on the bank statement is…
Added to the book balance
In a bank reconciliation, the difference between a check written that is erroneously recorded as less should be…
Added to the book balance
Unrealized gains or losses on “available for sale” securities are reported on the…
Balance Sheet
The “allowance for uncollectible accounts” is a…
Contra Asset and a
Permanent Account
Under the allowance method of accounts receivable, the write off entry for an account…
Has no effect on total assets
uncollectible accounts credit is an expense?
no
uncollectible accounts debit is an expense?
yes
The failure to record the adjusting entry for the expiration of prepaid insurance at year end would understate
Expenses
The failure to record the adjusting entry for the earning of (unearned revenue) would understate
Liabilities
Recording the adjusting entry for accrued interest receivable by debiting an asset and crediting a liability would understate
Revenue, Net Income and Owner’s Equity
Recording the adjusting entry for depreciation by debiting an expense account and crediting a liability would have no effect on
Owners Equity
Recording the adjusting entry for accrued wages payable by debiting an asset and crediting a liability would overstate
Net Income and Assets
Recording the adjusting entry for accrued interest payable on monies borrowed by us by debiting assets and crediting revenues would misstate
Total Revenue,
Total Expense
Total Assets
Total Liabilities
Debit assets does what
Increases assets
Credit assets does what
Decreases assets
Debit Liabilities and Owners equity does…
decreases
Credit Liabilities and Owners equity does…
Increases
Debit expenses
increases expenses
credit expenses
decreases expenses
debit revenues
decreases revenues
credit revenues
increases revenues
What are the three things that increase when credited?
Liabilities
Owners equity
Revenue
What are the two things that decrease when debited
Assets and Expenses
What is the accrual salary formula?
Salary expense = ending cash + difference in salary payable
What is the accrual service revenue formula?
Revenue = ending cash + difference in unearned revenue
What is the accrual Dues revenue formula?
Cash for dues - change on dues
What is the cash from rent formula?
Rent Revenue - ending Prepaid Rent
What is the cash paid for rent formula?
Rent expense - change in prepaid rent - change in rent payable
Cash basis formula
Cash received - cash paid
Accrual net income formula
Revenue - Expense
Big 5
Andersen Worldwide Ernst and Young Deloitte Touche KPMG PricewaterhouseCoopers
