General Accounting Knowledge

Question 1

Cash

Answer 1

Current Asset

Question 2

Accounts Receivable

Answer 2

Current Asset

Question 3

Notes Receivable

Answer 3

Current Asset

Question 4

Inventory

Answer 4

Current Asset

Question 5

Supplies

Answer 5

Current Asset

Question 6

Prepaid Insurance

Answer 6

Current Asset

Question 7

Land

Answer 7

Property, Plant, and Equipment

Question 8

Equipment

Answer 8

Property, Plant, and Equipment

Question 9

(Less) Accumulated Depreciation (generally speaking)

Answer 9

Property, Plant, and Equipment

Question 10

Patents

Answer 10

Intangible Asset

Question 11

Notes Payable

Answer 11

Current Liability

Question 12

Accounts Payable

Answer 12

Current Liability

Question 13

Unearned Sales Revenue

Answer 13

Current Liability

Question 14

Salaries and Wages Payable

Answer 14

Current Liability

Question 15

Interest Payable

Answer 15

Current Liability

Question 16

Mortgage Payable

Answer 16

Long-term Liability

Question 17

Notes Payable

Answer 17

Long-term Liability

Question 18

Common Stock

Answer 18

Stockholders’ Equity

Question 19

Retained Earnings

Answer 19

Stockholders’ Equity

Question 20

Trademarks

Answer 20

Intangible Asset

Question 21

Sales

Answer 21

Revenue

Question 22

Cost of Goods Sold

Answer 22

Expense

Question 23

Salaries and Wages Expense

Answer 23

Expense

Question 24

Interest Expense

Answer 24

Expense

Question 25

Income Tax Expense

Answer 25

Expense

Question 26

How should an Income Statement be laid out?

Answer 26

Revenues - Expenses = Net Income/Loss

Question 27

How should a Balance Sheet be laid out?

Answer 27

Total Assets = Total Liabilities and Stockholders’ Equity

Question 28

What side are Debits and Credits on?

Answer 28

Debits are on the left, Credits are on the right

Question 29

Are Assets Debit or Credit?

Answer 29

Debit. Debit for increase, Credit for decrease.

Question 30

Are Liabilities Debit or Credit?

Answer 30

Credit. Credit for increase, Debit for decrease.

Question 31

Is Common Stock Debit or Credit?

Answer 31

Credit. Debit for decrease, Credit for increase.

Question 32

Are Retained Earnings Debit or Credit?

Answer 32

Credit. Debit for decrease, Credit for increase.

Question 33

Are Dividends Debit or Credit?

Answer 33

Debit. Debit for increase, Credit for decrease.

Question 34

Are Revenues Debit or Credit?

Answer 34

Credit. Debit for decrease, Credit for increase.

Question 35

Are Expenses Debit or Credit?

Answer 35

Debit. Debit for increase, Credit for decrease.

Question 36

What formula represents Stockholders’ Equity, using debits and credits?

Answer 36

Common Stock + Retained Earnings + Revenues — Expenses — Dividends

Question 37

Name the 9 steps in the Accounting Cycle, in order.

Answer 37

1. Analyze business transactions
2. Journalize the transactions
3. Post to ledger accounts
4. Prepare a trial balance
5. Journalize and post adjusting entries
6. Prepare an adjusted trial balance
7. Prepare financial statements
8. Journalize and post closing entries
9. Prepare a post-closing trial balance