Accounting Final Exam Review 1

Classify the following transaction as an asset, liability, or owner's equity:

The owner invests personal cash in business. Cash is:

• An Asset

• A Liability

• Owner's Equity

Classify the following transaction as an asset, liability, or owner's equity:

The owner withdraws business assets for personal use. The withdrawal is:

• An Assets

• A Liability

• Owner's Equity

Classify the following transaction as an asset, liability, or owner's equity:

The company repays the bank that had lent money.

• An Asset

• A Liability

• Owner's Equity

Classify the following transaction as an asset, liability, or owner's equity:

The company purchases equipment with its cash. Equipment is:

• An Asset

• A Liability

• Owner's Equity

Classify the following transaction as an asset, liability, or owner's equity:

The owner contributes her personal truck to the business

• An Asset

• A Liability

• Owner's Equity

Classify the following transaction as an asset, liability, or owner's equity:

The company purchases supplies on credit. Supplies are:

• An Asset

• A Liability

• Owner's Equity

What is accounting?

• The activity of recording revenue for a business.

• Implementing a spreadsheet system for a new business.

• Planning, recording, analyzing, and interpreting financial information.

• The activity of recording liabilities for a business.

What is an accounting system?

• A planned process for providing financial information that will be useful to management.

• The act of the accountant working with all other departments in a business.

• A computer spreadsheet application for large accounting firms.

• A system of business revenue categories that serve each business unit.

Assets = Liabilities + Owner's Equity is the accounting equation for:

• Personal Net Worth

• Owner's Equity

• Income Statements

• Statement of Retained Earnings

Ethics in business are:

• A type of accounting software.

• The generally accepted accounting principles governed by the IRS for all businesses to follow.

• Additional online resources for accountants to use during tax season.

• The process of deciding what is morally right or wrong.