Lesson 4

Question 1

is the basic storage of information in accounting. It is a record of the increases and decreases in a specific item of asset, liability, equity, income or expense.

Answer 1

account

Question 2

are the resources you control that have resulted from past events and can provide you with economic benefits.

The Five Major Accounts

Answer 2

ASSETS

Question 3

are your present obligations that have resulted from past events and can require you to give up economic resources when settling them.

Answer 3

LIABILITIES

Question 4

is assets minus liabilities.

Answer 4

EQUITY

Question 5

are increases in economic benefits during the period in the form of inflows or enhancements of assets or decreases of liabilities that result in increases in equity, other than those relating to investments by the business owners.

Answer 5

INCOME

Question 6

are decreases in economic benefits during the period in the form of outflows or depletions of assets or increases of liabilities that result in decreases in equity, other than those relating to distributions to the business owners

Answer 6

EXPENSES

Question 7

of accounts is a list of all the accounts used by a business.

Answer 7

chart

Question 8

Balance sheet accounts:

Classification of the Five Major Accounts

Answer 8

ASSETS
LIABILITIES
EQUITY

Question 9

Income statement accounts

Answer 9

INCOME
EXPENSES

Question 10

BALANCE SHEET ACCOUNTS
ASSETS

Answer 10

Cash
Accounts receivable
Allowance for bad debts
Notes receivable
Prepaid supplies
Prepaid rent
Prepaid insurance
Land
Building
Accumulated depreciation - Building
Equipment
Accumulated depreciation - equipment

Question 11

BALANCE SHEET ACCOUNTS
LIABILITIES

Answer 11

Accounts payable
Notes payable
Interest payable
Salaries payable
Utilities payable
Unearned

Question 12

BALANCE SHEET ACCOUNTS
EQUITY

Answer 12

-Owner’s capital (or Owner’s equity)
-Owner’s drawings

Question 13

INCOME STATEMENT ACCOUNTS
INCOME

Answer 13

Service fees
Sales
Interest income
Gains

Question 14

INCOME STATEMENT ACCOUNTS
EXPENSES

Answer 14

-Cost of sales (or Cost of goods sold)
-Freight-out
-Salaries expense
-Rent expense
-Utilities expense
-Supplies expense
-Bad debt expense
-Depreciation expense
-Advertising expense
-Insurance expense
-Taxes and licenses
-Transportation and travel-expense
-Interest expense
-Miscellaneous expense
-Losses