Introduction to Accounting (Chapter 1-4)

Front

The basic accounting equation is:

Back

Assets = Liabilities + Owner's Equity

Front

Which of the following best defines accounting? A system for managing personal finances, The recording, summarizing, and analysis of financial transactions, The recording of business revenues, The preparation of tax returns

Back

The recording, summarizing, and analysis of financial transactions

Front

Which financial statement provides information on a company’s profitability over a period of time?

Back

Income Statement

Front

A business organized as a separate legal entity under state law and having ownership divided into transferable shares of stock is known as a:

Back

Corporation

Front

Which of the following is an example of an asset? Service Revenue, Accounts Receivable, Dividends, Accounts Payable

Back

Accounts Receivable

Front

The purpose of the general journal is to:

Back

Record all business transactions in chronological order

Front

What is the purpose of a trial balance?

Back

To ensure that debits equal credits after posting

Front

An account has a debit balance if: The total of its debit amounts exceeds the total of its credit amounts

Back

The total of its debit amounts exceeds the total of its credit amounts

Front

A debit to an asset account indicates:

Back

An increase in the account

Front

Which of the following describes a compound journal entry?

• A journal entry that increases only revenue accounts

, A journal entry that reduces liability accounts, A journal entry involving multiple accounts for the same transaction, A journal entry involving multiple accounts for the same transaction

Back

A journal entry involving multiple accounts for the same transaction