What is the Accounting Cycle? ACNT I - 2.3.3

Which of the following is the basic Accounting Equation?

• Assets = Liabilities + Stockholder's or Owner's Equity

• Liabilities = Assets + Stockholder's or Owner's Equity

• Stockholder's or Owner's Equity = Liabilities + Assets

• Assets = Liabilities + Income

When is the unadjusted trial balance completed?

• After a first set of adjusting entries have been made

• before any necessary adjusting entries have been made

• as a final step in the accounting cycle

• after all adjusting entries have been made

Which of the following is true of the credit and debit columns in the adjusted trial balance?

• the debit should be larger than the credit

• the credit should be larger than the debit

• the credit and debit should match

• together they should equal the owner's equity

Which of the following is an example of an adjusting entry?

• revenue in the form of products as opposed to cash

• revenue that has been billed and paid

• revenue from a prior accounting period

• revenue that has been billed but not yet paid

Which idea forms the basis of double-entry accounting?

• For every single transaction, at least two accounts will be affected

• for every single transaction, only assets will be impacted

• the stockholder's equity in a business must equal the liabilities

• the assets of a business equal the stockholder's equity

After a business transaction has been analyzed, which of the following must occur for the analysis to have been done correctly?

• equity must be greater than the difference between assets and liabilities

• equity must equal the difference between assets and liabilities

• equity must equal the sum of assets and liabilities

• equity must be greater than the sum of assets and liabilities

When a business owner purchases a new truck on credit for his business, what impact does this purchase have on his owner's equity?

• it decreases equity

• it increases equity

• it has no impact on equity

• the impact depends on the situation

At which point in the accounting cycle should an acountant prepare the trial balance?

• at the end of the cycle only

• just before preparing the financial statements

• at the beginning of the cycle only

• at any point he or she chooses

Which type of source document is best for providing evidence of disbursements of funds from petty cash?

• a credit card receipt

• a supplier invoice

• a lockbox check image

• a bank statement

Which column is only found in an ten-column worksheet?

• income statement

• adjusted trial balance

• balance sheet

• adjustments