General Information

Question 1

Accounting

Answer 1

planning, keeping, analyzing, and interpreting records usually for a business or organization

Question 2

Accounting Records

Answer 2

orderly records of a business’ financial activities

Question 3

Equities are _______ and ________

Answer 3

Liabilities and Capital

Question 4

Assets

Answer 4

anything a business owns; always listed on the left side of the balance sheet

Question 5

Liabilities

Answer 5

anything owed by a business; always listed on the right side of the balance sheet

Question 6

Capital

Answer 6

the value of an owners equity; always listed on the right side of the balance sheet

Question 7

How do you find Capital?

Answer 7

total assets minus total liabilities

Question 8

The heading of a balance sheet must include, in order:

Answer 8

1. Name of business
2. Name of statement
3. Date of statement

Question 9

On a balance sheet, what does a single underline mean?

Answer 9

Something has been added or subtracted

Question 10

On a balance sheet, what does a double underline mean?

Answer 10

The work is complete

Question 11

A journal with two amount columns is a _______________.

Answer 11

General Journal

Question 12

What is a source document?

Answer 12

a business paper from which information is obtained for a journal entry, required for the opening entry in a general journal

Question 13

What is a memorandum?

Answer 13

a form on which a brief message is written describing an entry

Question 14

What does a General Ledger consist of?

Answer 14

all the accounts for a business

Question 15

What is a Chart of Accounts?

Answer 15

a list of all of the account titles and numbers showing the location of each account in a ledger

Question 16

What must you do after posting an entry to a ledger?

Answer 16

post reference

Question 17

What is the post reference on a general ledger? What does it mean?

Answer 17

G1 - G stands for General, 1 comes from page number.

Question 18

Balance Sheet

Answer 18

A financial statement that reports assets, liabilities, and capital on a specific date

Question 18

Debit

Answer 18

An entry recorded in the debut column. Results in an increase in assets or a decrease in liabilities or capital.

Question 19

Credit

Answer 19

An entry recorded in the credit column. Results in a decrease in assets or an increase in liabilities or capital.

Question 20

Transaction

Answer 20

Occurs any time money changes in a business

Question 21

Revenue

Answer 21

An increase in capital resulting from the operation of a business (Sales)

Question 22

Expenses

Answer 22

A decrease in capital resulting from the operation of a business (debit expense account, credit cash)

Question 23

Double-Entry Accounting

Answer 23

The recording of debit and credit parts of a transaction. Provides a complete record of each transaction.

Question 24

Journalizing

Answer 24

Recording business transactions in a journal

Question 25

T-Account

Answer 25

A skeleton form of an account showing only the debit and credit columns

Question 26

Normal Debit balance

Answer 26

The account balance is written in the debit side

Question 27

Normal Credit balance

Answer 27

The account balance appears on the credit side

Question 28

Combination Journal

Answer 28

A multi-column journal in which transactions are recorded. It has 5 columns.

Question 29

Proving a journal

Answer 29

Add up the total of the debit columns and the total of the credit columns

Question 30

Proving cash

Answer 30

Cash on hand at the start of the month
Plus total cash debits
Minus total cash credits
Equals cash on hand at month end

Question 31

Worksheet

Answer 31

A columnar accounting firm on which the financial condition of a business is summarized.

1. Proves that general ledger is correct
2. Contains adjustments
3. Shows net income or loss

Question 32

Adjustments

Answer 32

Changes recorded to update general ledger accounts at the end of a fiscal period.
Adjustments are made to supplies and pre-paid insurance because they are used during the month.

Question 33

Net Income

Answer 33

The difference between total revenue and total expenses when revenue is greater

Question 34

Net Loss

Answer 34

The difference between total revenue and total expenses when total expenses are greater

Question 35

Income Statement

Answer 35

A financial statement showing the revenue and expenses for a fiscal period

Question 36

Closing Entries

Answer 36

Transfer balances of temporary accounts to permanent accounts.

1. Close revenue accounts
2. Close expense accounts
3. Close the income summary account and record net income of net loss in the owner’s capital account
4. Close the owner’s drawing account

Question 37

Adjusting Entries

Answer 37

Entries recorded at the end of the period to adjust the ending balances in accounts