Exam 1

Question 1

Economic activity that can be measured in dollars and cents are

Answer 1

Transactions

Question 2

Name the three E’s for getting your license

Answer 2

Education, Texas requires 150 hours; experience, two years working for a CPA; examination, Four part 16 hour exam which must be completed in 18 months, given the first two months of a calendar quarter

Question 3

Name the seven accounting elements

Answer 3

Assets, liabilities, and owners equity, owner withdraw, expense, owner contribution, revenue

Question 4

What is a CIA

Answer 4

Certified internal auditor

Question 5

What is a CMA

Answer 5

Certified managerial accountant

Question 6

What is a CPA

Answer 6

Certified public accountant

Question 7

The profession concerning the summarization, reporting, and interpretation of the transactions affecting an entity is known as

Answer 7

Accounting

Question 8

Any unit of accountability is known as a

Answer 8

Entity

Question 9

What is GAAP?

Answer 9

Generally accepted accounting principles

Question 10

Claims to assets by creditors are known as

Answer 10

Liabilities

Question 11

Claims to assets by owners are known as

Answer 11

Owners equity

Question 12

Name the four areas of accounting

Answer 12

Financial accounting, managerial accounting, tax accounting, nonprofit/government accounting

Question 13

The audience to financial accounting is

Answer 13

External to the firm (owners and creditors), and the rules are GAAP

Question 14

The audience to managerial accounting is

Answer 14

Internal to the firm (management) and there are no rules

Question 15

The audience for tax accounting is

Answer 15

Taxpayer and government and the rules are law (internal revenue code”)

Question 16

The audience for nonprofit and government accounting is

Answer 16

Churches, etc. in the rules are GAAP and GAS (government accounting spenders)

Question 17

A proprietorship has

Answer 17

One owner, assumes total liability, and is single taxation

Question 18

A partnership has

Answer 18

Two owners who assume total liability, and is single taxation

Question 19

A corporation is

Answer 19

Separate from the Owners, have limited liability (protection given to the stockholders), and has double taxation

Question 20

Two sources of decreased to owners equity are

Answer 20

Owner withdraw and expense

Question 21

The two sources of increased to owners equity are

Answer 21

Owner contribution in revenue

Question 22

When did double entry bookkeeping start?

Answer 22

The 1300s

Question 23

Double entry bookkeeping requires a minimum of___affects for every transaction in the accounting equation

Answer 23

2

Question 24

Give examples of assets

Answer 24

Cash, assets receivable, inventory, supplies, equipment, land

Question 25

Give examples of liability accounts

Answer 25

Accounts payable, notes payable, salaries payable, unearned service revenue (cash in advance)

Question 26

Every account will have what five things?

Answer 26

A title, beginning balance, increases, decreases, ending balance

Question 27

The normal balance of account always

Answer 27

Agrees with how the account increases

Question 28

Name the seven steps in the accounting cycle

Answer 28

Journalization, Posting to the ledger, preparation of a worksheet, preparation of financial statements, journalization and posting of adjusting journal entries, journalization, and posting of clothes and journal entries, and preparation of a post closing trial balance

Question 29

Every business will have a____, and a

Answer 29

General journal, general ledger