Midterm Review

Question 1

5 Major Classifications

Answer 1

Assets
Liabilities
SE
Revenues
Expenses

Question 2

Normal credit balance of five classifications

Answer 2

Libilities
Revenues
SE

Question 3

normal debit balance of five classifications

Answer 3

Assets

Expenses

Question 4

Types of accoutning

Answer 4

Managerial

Financial

Question 5

Financial accounting

Answer 5

external users with info

(employees, consumers, IRS, investors, rivals, lenders, Bank suppliers

Question 6

Managerial Accounting

Answer 6

provide internal users with info

managers

Question 7

Current Liability

Answer 7

considered current if less than a year old

debt paid

Question 8

Closing Entries (in order)

Answer 8

Revenue
Expense
Income Summary
Dividends

Question 9

What is the journal entry to record the cash sale of capital stock to SE?

Answer 9

Cash

Capital Stock

Question 10

Business Entity Concept

Answer 10

concept relates to separating business and personal finances

Question 11

Journalizing

Answer 11

recording transaction to journal

Question 12

How do you close dividends?

Answer 12

Retained Earnings

Dividends

Question 13

How do you close Revenue?

Answer 13

Revenue

Income Summary

Question 14

What happens on the Retained Earnings Statement?

Answer 14

(Starting Retained Earnings)+(Net Income)-(Dividends)

Question 15

How do you close Income Summary? (if net income)

Answer 15

I.S.

R.E.

Question 16

How do you adjust used supplies?

Answer 16

Supplies Expense

Supplies

Question 17

Adjusting Entries always include…

Answer 17

one debit, one credit

on Balance Sheet account, one Income Statement account

Question 18

Depreciation

Answer 18

$ value decreases over time

Question 19

Which type of accounting is required by GAAP?

Answer 19

Accrual Basis

Question 20

Accounting Equation

Answer 20

Assets= Liabilities+ SE

Question 21

Accounting used in the USA

Answer 21

FASB (Financial Accounting Standards Board)

Question 22

Corporation

Answer 22

Stocks

Question 23

Revenue Recognition

Answer 23

record revenue when earned, not received

Question 24

Liabilities

Answer 24

debts owed by a business

Question 25

After posting 2nd closing entry to the Income Summary, Balance will be equal to the…

Answer 25

NET INCOME 
(rev-exp=net income)

Question 26

Type of account of Accumulated Depreciation

Answer 26

Contra-Asset (normal balance credit)

Question 27

Receipt of Cash for rent, 2 months in advance

Answer 27

Cash

Unearned Rent

Question 28

Trial Balance

Answer 28

Verification that debit=credit

Question 29

CPA

Answer 29

certified public accountant- accountant that practices as an individual or member of accounting firm

Question 30

2 Transaction that decrease Stockholder’s Equity

Answer 30

Expenses, Dividends

Question 31

Adjusting entry for wages:
end of period on tuesday
pay 50,000 a week

Answer 31

Dr. Wages Exp 20,000

Cr. Wages Pay 30,000

Question 32

Process of transferring debits and credits to the ledger is…

Answer 32

POSTING

Question 33

Order of Preparing Financial Statements

Answer 33

Income Statement
Retained Earnings
Balance Sheet
Cash Flow

Question 34

Debit side of account

Answer 34

left

Question 35

credit side of account

Answer 35

right

Question 36

What financial statement is Accum. Depreciation recorded on?

Answer 36

Balance Sheet
under:
(Property, Plants, Equip) or FIXED ASSETS

Question 37

Book Value

Answer 37

difference between initial value and accum depreciation: (initial value-accum.dep)

Question 38

Prior to adjusting process, accrued Revenue is…

Answer 38

earned,

not recorded

Question 39

Prior to adjusting process, accrued Expense is…

Answer 39

incurred,
not paid,
not recorded

Question 40

Which fixed asset is not depreciated?

Answer 40

LAND

Question 41

Purpose of adjusting entries is to…

Answer 41

update accounts