module 3

Question 1

two types of accts in the trial balance

Answer 1

real, nominal

Question 2

____ accounts end up in the balance sheet and reflect cumulative balance in each acct from inception of business

Answer 2

real

Question 3

assets, liabilities, equity are _____ accounts

Answer 3

real

Question 4

_____ accounts end up in the income statement and balances represent activity over a certain period of time

Answer 4

nominal

Question 5

revenue and expenses are ____ accounts

Answer 5

nominal

Question 6

at the end of each accounting period, the balance of all nominal accounts are transferred to _____ _______ (part of owners’ equity, a real account), so their balances start back at zero at the beginning of each accounting period.

Answer 6

retained earnings

Question 7

accounts on the ____ _____ typically are combined into condensed accounts for presentation on the balance sheet and income statement.

Answer 7

trial balance

Question 8

the ______ _____ provides a snapshot of the business at a specific point in time

Answer 8

balance sheet

Question 9

under _____, the balance sheet presents accounts in the following order: current assets, non-current assets, current liabilities, non-current liabilities, and owners’ equity. within each asset and liability group, items are presented in order of liquidity, with the most liquid (those that can be most easily and quickly converted to cash) first.

Answer 9

US GAAP

Question 10

under _____, the balance sheet is generally presented with the least liquid items first, and in the following order: non-current assets, current assets, owners’ equity, non-current liabilities, and current liabilities.

Answer 10

IFRS

Question 11

the ______ ______ shows all revenue and expense accounts for a given period of time

Answer 11

income statement

Question 12

using ____ _____ from any two points in time, a business can create an income statement that will tell the financial story of the activities for that period.

Answer 12

trial balances

Question 13

the ______ ______ can show the following measures of income: gross profit (sales less cost of goods sold), operating income (gross profit less operating expenses), income before taxes (operating income less non- operating expenses), and finally, net income (income before taxes less taxes).

Answer 13

income statement

Question 14

the _____ ____ and _____ _____ are two important financial statements that show the company’s financial position.

Answer 14

balance sheet; income statement