Part 2

Question 1

Cash is a ____ and goes up with a ___.

Answer 1

asset;debit

Question 2

Accounts Receivable is a ___ and goes up with a ___.

Answer 2

asset;debit

Question 3

Notes Receivable is a ___ and goes up with a ___.

Answer 3

asset;debit

Question 4

Interest Receivable is a ___ and goes up with a ___.

Answer 4

asset;debit

Question 5

Inventory is a ___ and goes up with a ___.

Answer 5

asset;debit

Question 6

Investments is a ___ and goes up with a ___.

Answer 6

asset;debit

Question 7

Fixed Assets is a ___ and goes up with a ___.

Answer 7

asset;debit

Question 8

Property, Plant, & Equipment (P,P,&E) is a ___ and goes up with a ___.

Answer 8

asset;debit

Question 9

Prepaid Insurance is a ___ and increases with a ___.

Answer 9

asset;debit

Question 10

Prepaid Rent is a ___ and increases with a ___.

Answer 10

asset;debit

Question 11

Other Prepaid Expenses is a ___ and increases with a ___.

Answer 11

asset;debit

Question 12

Goodwill is a ___ and increases with a ___.

Answer 12

asset;debit

Question 13

Other Intangible Assets is a ___ and increases with a ___.

Answer 13

asset;debit

Question 14

Deferred Tax Asset is a ___ and increases with a ___.

Answer 14

asset;debit

Question 15

Accounts Payable is a ___ and increases with a ___.

Answer 15

liability;credit

Question 16

Interest Payable is a ___ and increases with a ___.

Answer 16

liability;credit

Question 17

Notes Payable is a ___ and increases with a ___.

Answer 17

liability;credit

Question 18

Current Portion of Notes Payable is a ___ and increases with a ___.

Answer 18

liability;credit

Question 19

Wages Payable is a ___ and increases with a ___.

Answer 19

liability;credit

Question 20

Taxes Payable is a ___ and increases with a ___.

Answer 20

liability;credit

Question 21

Accrued Interest is a ___ and increases with a ___.

Answer 21

liability;credit

Question 22

Accrued Wages is a ___ and increases with a ___.

Answer 22

liability;credit

Question 23

Accrued Taxes is a ___ and increases with a ___.

Answer 23

liability;credit

Question 24

Deferred Revenue is a ___ and increases with a ___.

Answer 24

liability;credit

Question 25

Short Term Debt is a ___ and increases with a ___.

Answer 25

liability;credit

Question 26

Long Term Debt is a ___ and increases with a ___.

Answer 26

liability;credit

Question 27

Deferred Tax Liability is a ___ and increases with a ___.

Answer 27

liability;credit

Question 28

Other Liabilities is a ___ and increases with a ___.

Answer 28

liability;credit

Question 29

Common Stock is a ___ and increases with a ___.

Answer 29

Owners’ equity;credit

Question 30

Capital Stock is a ___ and increases with a ___.

Answer 30

Owners’ equity;credit

Question 31

Additional Paid-In Capital is a ___ and increases with a ___.

Answer 31

Owners’ equity;credit

Question 32

Preferred Stock is a ___ and increases with a ___.

Answer 32

Owners’ equity;credit

Question 33

Treasury Stock is a ___ and increases with a ___.

Answer 33

Owners’ equity;credit

Question 34

Retained Earnings is a ___ and increases with a ___.

Answer 34

Owners’ equity;credit

Question 35

Sales is a ___ and increases with a ___.

Answer 35

Revenues account part of owners’ equity;credit

Question 36

Sales Revenue is a ___ and increases with a ___.

Answer 36

Revenues account part of owners’ equity;credit

Question 37

Interest Revenue is a ___ and increases with a ___.

Answer 37

Revenues account part of owners’ equity;credit

Question 38

Rent Revenue is a ___ and increases with a ___.

Answer 38

Revenues account part of owners’ equity;credit

Question 39

Miscellaneous Revenue is a ___ and increases with a ___.

Answer 39

Revenues account part of owners’ equity;credit

Question 40

Other Revenue is a ___ and increases with a ___.

Answer 40

Revenues account part of owners’ equity;credit

Question 41

Cost of Goods Sold is a ___ and increases with a ___.

Answer 41

expense account part of owners’ equity;debit

Question 42

Interest Expense is a ___ and increases with a ___.

Answer 42

expense account part of owners’ equity;debit

Question 43

Rent expense is a ___ and increases with a ___.

Answer 43

expense account part of owners’ equity;debit

Question 44

Office Supplies Expense is a ___ and increases with a ___.

Answer 44

expense account part of owners’ equity;debit

Question 45

Travel Expense is a ___ and increases with a ___.

Answer 45

expense account part of owners’ equity;debit

Question 46

Research & Development (R&D) Expense is a ___ and increases with a ___.

Answer 46

expense account part of owners’ equity;debit

Question 47

Depreciation Expense is a ___ and increases with a ___.

Answer 47

expense account part of owners’ equity;debit

Question 48

Other Expenses is a ___ and increases with a ___.

Answer 48

expense account part of owners’ equity;debit

Question 49

This principle recognizes that there are some estimates involved in accounting and says that accounting should reflect the more cautious estimated valuation rather than the more optimistic one. For assets it means recording the lower valuation while for liabilities it means recording the higher possible valuation. For revenues and gains it means recording them when they are reasonably certain but for expenses and losses it means recording them when they are reasonably possible.

Answer 49

Conservatism

Question 50

Something is considered to be ___ if it is reasonably likely to impact the decision-making of those who are using the accounting data or financial reports. Businesses are only required to do detailed record-keeping and reporting for items that are ___. What principle is this?

Answer 50

material;material;Materiality

Question 51

___ means that the information is useful and capable of influencing the decision of the users of the financial statements.

Answer 51

Relevance

Question 52

___ means that the information faithfully represents the underlying economics. The three dimensions of reliability are validity, verifiability, and unbiasedness.

Answer 52

Reliability

Question 53

The ___ refers to the fact that a business is a separately identifiable entity. Thus, the accounts of a business should be separate and distinct from the accounts of the owners and managers of the business. In addition, financial records should be kept and reported for each separate entity, especially in the case of multi-national companies and large companies with subsidiaries.

Answer 53

entity concept

Question 54

The ___ principle refers to the fact that transactions are recorded at the cost that existed at the time the transaction occurred. In the case of assets, it means that their value in the financial records is shown at historical cost, rather than current market value.

Answer 54

historical cost

Question 55

A company is considered to be a ___ if the entity is expected to remain in operation and be able to satisfy all commitments and obligations and realize the benefits and values of all assets for the indefinite future. If there is evidence to the contrary, the business may no longer be considered a ___.

Answer 55

going concern;going concern

Question 56

One of the principles behind Accrual Accounting which states that expenses should be recognized in the same period in which the related revenue is recognized rather than when the related cash is paid.

Answer 56

Matching Principle

Question 57

Although accounting guidelines allow some degree of discretion in how transactions are recorded, the ___ principle requires that the methods be consistently applied by the company over time in recording and reporting unless there is a sound reason to change them.

Answer 57

consistency

Question 58

An amount is ___ when the cash (or claim to cash) is received, and an amount is ___ when receipt of payment (or claim to cash) is reasonably certain.

Answer 58

realized;realizable

Question 59

A company would debit Cash to reflect an increase in Cash when? Name two scenarios.

Answer 59

Cash is received;Money is borrowed;