Powerpoint 3

Question 1

Free Cash Flow

Answer 1

Cash provided by operations - capital expenditures - cash dividends

A measure of solvency

The greater the better

could be liquidity too..

Question 2

Normal Dr. Balance

Answer 2

Cash

Inventory

Accounts receivable

Utilities expense

Prepaid Rent

Equipment

Dividends

Question 3

Normal Cr. Balance

Answer 3

Accounts payable

Common Stock

Notes payable

Retained earings

Sales revenue

Question 4

Debits and Credits are synonymous to:

Answer 4

Left and Right

Question 5

If an individual asset account is increased, which of the following corresponding effects would be possible:

Answer 5

Increase in a specific liability

Decrease in another asset

Increase in stockholders’ equity

All of the above are possible

Question 6

Accounting Information System

Answer 6

A system of collecting and processing transaction data and communicating financial information to decision makers

Question 7

Accounting Transactions

Answer 7

The economic events that require recording in the financial statements

Question 8

Account

Answer 8

An individual accounting record of increase and decrease in a specific asset, liability, stockholders equity, revenue, or expense item

Question 9

Debit

Answer 9

The left side of an account

Dr.

Question 10

Credit

Answer 10

The right side of an account

Cr.

Question 11

Normal Balance

Answer 11

The side of the T-Account that leads to an INCREASE

Question 12

DEAD

Answer 12

Debit increased:

Expenses

Assets

Dividends

Question 13

CuRLS

Answer 13

Credit normal balance - credit increased

Revenues

Liabilities

Stockholders’ equity

Question 14

Ledger

Answer 14

The entire group of accounts maintained by a company

Question 15

Chart of accounts

Answer 15

The list of accounts that a company uses

It is important to note that the number and type of accounts used differ from company to company - depends on size, complexity, industry, type of business

Question 16

The Trial Balance

Answer 16

Lists all accounts and their balances at a given time (typically end of accounting period)

Proves that all of the accounts balance in the accounting equation after posting is completed

Question 17

___________ is useful in creating the financial statements

Answer 17

The trial balance

Question 18

In the ______ the accounts are listed in order of liquidity

Answer 18

trial balance

Question 19

the ________ is helpful in identifying posting errors and is a complete listing of all T-accounts

Answer 19

trial balance