ACCOUNTING 101 QUIZ1

A record used to summarize all increases and decreases in a particular asset, such as cash, or any other type of asset, liability, equity, revenue, or expense.

The condition of being held responsible for one's actions by existence of an independent record of those actions.

The sequence of accounting procedures used to record, classify, and summarize accounting information.

The span of time covered by an income statement. One year is the accounting period for much financial reporting, but financial statements are also prepared by companies for each quarter of the year and for each month.

Calls for recording revenue in the period in which it is earned and recording expenses in the period in which they are incurred.

The traditional accounting practice of resolving uncertainty by choosing the solution that leads to the lower amount of income being recognized in the current accounting period. This concept is designed to avoid overstatement of financial strength or earnings.

An amount entered to the RIGHT SIDE of a ledger account.

It is used to record a DECREASE IN AN ASSET or AN INCREASE IN LIABILITY OR IN EQUITY.

An amount entered on the LEFT SIDE of a ledger account.

It is used to record an INCREASE IN AN ASSET or DECREASE IN A LIABILITY OR IN EQUITY.