Test 1

Question 1

What is the Accounting Equation?

Answer 1

Assets=Liabilities+Stockholder Equity

Question 2

What falls under Stockholder Equity?

Answer 2

Common Stock and Retained Earnings

Question 3

What falls under Retained Earnings?

Answer 3

+Revenues

• Expenses
• Dividends

Question 4

What goes on a balance sheet?

Answer 4

Assets
Dividends
Expenses

Question 5

What goes on an income statement

Answer 5

1) Expenses
2) Liabilities- In order of maturity
3) Stockholder Equity-contributed capital-retained earnings
4) Revenues

Question 6

What are some Debits

Answer 6

Assets
Dividends
Expenses

Question 7

What are some Credits

Answer 7

Liabilities
Stockholder Equity
Revenues

Question 8

Debits go on which side?

Answer 8

Left side

Question 9

Credits go on which side?

Answer 9

Right side

Question 10

Which comes first, Debits or Credits on an entry?

Answer 10

Debits first, Credits second

Question 11

What is called when cash is recognized prior to revenue being recognized?

Answer 11

Unearned Revenue

Question 12

What is it called when cash is recognized after revenue is recognized?

Answer 12

Accounts Receivable

Question 13

What is called when cash is recognized when revenue is recognized?

Answer 13

Cash

Question 14

What is a prepaid expense?

Answer 14

Allocating previously recorded assets to expense

– i.e., expensing an item that you paid early.

Question 15

What is a Unearned Revenue?

Answer 15

Allocating previously recorded unearned revenue to earned revenue
– i.e., recognizing as income a “sale” for which you had been paid early

Question 16

What is an Accrued Expense?

Answer 16

Recording operating expenses that have not yet been paid or recorded
– you have incurred the expense, but YOU still owe the money

Question 17

Accrued Revenues

Answer 17

Recording revenue that has been earned, but not yet been received or recorded – you have earned the revenue, but YOU are still OWED the money

Question 18

Prepare statements in following order:

Answer 18

Income Statement
Statement of Stockholders’ Equity
Balance Sheet
Statement of Cash Flows

Question 19

What happens to temporary accounts?

Answer 19

They are zeroed out at the end of an accounting period

Question 20

What happens to the balance of temporary accounts?

Answer 20

They are transferred to retained earnings

Question 21

What happens to dividends?

Answer 21

They are closed to retained earnings

Question 22

What goes on a balance sheet?

Answer 22

Assets, Liabilities, Stockholder equity

Question 23

What is an income statement

Answer 23

The financial results of a given time period

Question 24

When does net income occur?

Answer 24

When revenues are greater than liabilities

Question 25

What is a statement of stockholders equity?

Answer 25

Reports the events that cause increase or decrease in stockholder equity

Question 26

Retained Earnings

Answer 26

Increase with net income increasing and vice versa

Question 27

statement of cash flows

Answer 27

reports a business’s cash inflows and cash outflows during | a given period of time

Question 28

Give the order of financial statements

Answer 28

1) Income Statement 2) Statement of Stockholders Equity 3)Balance Sheet 4) Statement of Cash Flows

Question 29

What gets decreased when a divedend is issued?

Answer 29

Cash

Question 30

Typical Assets

Answer 30

``` Cash Accounts Receivable Office Supplies Prepaid Rent Office Equipment Accumulated Depreciation—Office Equipment ```

Question 31

Typical Liabilities

Answer 31

``` Accounts Payable Interest Payable Wages Payable Unearned Revenue Notes Payable ```

Question 32

Typical Equity

Answer 32

Common Stock Retained Earnings Dividends

Question 33

Typical Revenues

Answer 33

Anytime a company is payed for a job

Question 34

Typical Expenses

Answer 34

``` Supplies Expense Wage Expense Rent Expense Depreciation Expense—Office Equipment Interest Expenses ```

Question 35

What is a liability

Answer 35

obligations or debts that a business must pay in cash or in goods and services at some future time as a consequence of past transactions or events

Question 36

What is an asset

Answer 36

the economic resources of a business that can be expressed in monetary terms. Assets take many forms.

Question 37

Is ACCT Receivable an Asset?

Answer 37

Yes

Question 38

What is Accounts Payable?

Answer 38

A liability

Question 39

What is debt financing

Answer 39

Financing from an outside source like a bank

Question 40

What is Equity Financing

Answer 40

financing via stockholders

Question 41

What is the Sarbanes-Oxley Act

Answer 41

2002 regulation that forces companies to do things so they dont cheat

Question 42

What are expenses

Answer 42

are decreases in a company’s resources from generating revenue. Expenses are generally measured by the value of the assets used up or exchanged as a result of a businesses operating expenses

Question 43

What is contributed capital

Answer 43

a measure of the capital contributed by the stockholders of a company when they purchase ownership shares in the company

Question 44

Earned capital

Answer 44

a measure of the capital that is earned by the company, reinvested in the business, and not distributed to its stockholders—that is, its retained earnings

Question 45

Retained earnings

Answer 45

are increased when operations produce net income and decreased when operations produce a net loss.

Question 46

What is an annual report called?

Answer 46

10-K

Question 47

General Ledger

Answer 47

Holds all transactions

Question 48

Accrual

Answer 48

increasing expenses and increasing revenues

Question 49

Contra Account

Answer 49

used to record reductions in, or off- | sets against, a controlling account