Accounting Fall Semester Test Study Guide

Front

What is the accounting equation?

Back

Assets = Liability + Owner's Equity

Front

What is the purpose of accounting records?

Back

To organize business's financial records

Front

What is the definition of an expense in accounting?

Back

A decrease in owner's equity resulting from the operation of a business

Front

What is the purpose of a sales invoice?

Back

To record a sale on account

Front

What is the first step in the posting procedure?

Back

Writing the date

Front

What is the purpose of a bank statement?

Back

To report deposits, withdrawals, and bank balances

Front

What is the purpose of a debit card?

Back

To automatically deduct the amount of a purchase from the checking account

Front

What is the purpose of a work sheet in accounting?

Back

To summarize the general ledger information needed to prepare financial statements

Front

What is the purpose of a fiscal period in accounting?

Back

To summarize and report financial information for a specific length of time

Front

What is the purpose of a code of conduct in accounting?

Back

To guide the ethical behavior of a company and its employees