Accounting Basics

In a Cash account: when money is deposited, this is known as a:

• Credit

• Liability

• Owners' Equity

• Debit

The Accounts Payable account is for:

• money people owe your business

• fun

• keeping track of what you've earned

• the money your business owes

When you add up the debits and credits for each account, you need to minus the small number from the big number to get the...

• total

• balance

• transaction

• owner's equity

If you end up with a negative number when you balance an account, this is the accounting way of writing it correctly:

• (500)

• 500 negative

• less 500

TRUE or FALSE: some transactions can have more than 1 debit or credit.

• FALSE

• TRUE

The types of accounts you use to keep track of the money your business makes are known as __________ accounts.

• Expense

• Machines

• Owner's Equity

• Revenue

The formula to determine if your business is making a profit or not is:

• Expenses minus revenues

• Revenues minus expenses

• Owner's Equity minus Cash

• Accounts Payable minus Accounts Receivable

You, the owner, want to give a vehicle your company owns to your niece. Are you allowed to do that?

• Yes

• No

• Yes, but you need to have enough money in Owner's Equity to cover the cost

A customer pays off a purchase they made 27 days ago. What accounts are affected, and HOW are they affected?

• Cash goes down, Bank Loan goes up

• Accounts Payable goes down, Cash goes up

• Accounts Receivable goes down, Cash goes up

• Bank Loan goes down, Cash goes up

True or False: T-Accounts are used by accountants IRL.

• True

• False