1.2 Accounting Review

A business activity that changes assets, liabilities, or owner’s equity is called a(n)

• Account

• Transaction

• Capital

• Accounts Payable

A record summarizing all the information pertaining to a single item in the accounting equation is called a(n)

• Transaction

• Account

• Capital

• Owner's Equity

(TYPE THE NUMBER)

How many accounts are ALWAYS affected in a transaction?

What TYPE of an account is CASH?

• ASSET

• LIABILITY

• OWNER'S EQUITY

What TYPE of an account is Accounts Payable?

• ASSET

• LIABILITY

• OWNER'S EQUITY

What TYPE on an account is capital?

• ASSET

• LIABILITY

• OWNER'S EQUITY

When 2 accounts are on the same side of the accounting equation, one must _____ and one must _____.

• Decrease / Increase

• Balance / Equal

• Asset / Liability

• Owner's Equity / Capital

When the 2 accounts are on opposite sides of the accounting equation, they both have to do the same thing (increase or decrease)

TRUE OR FALSE? type it in below

Bought supplies on account from Five Star Supply, $250. What is happening in this transaction?

• You are paying cash to Five Star and getting $250 supplies out of it.

• You are buying $250 of supplies and will pay for it all at a later time.

• You don't have enough supplies so Five Star is giving you a donation.

• The owner is investing money to Five Star and they are giving you $250 of supplies.

Paid cash on account to TechCity, $500. What is happening in this transaction?

• Cash is decreasing 500

  Accounts Payable is decreasing 500

• Cash is decreasing 500

  Accounts Payable is increasing 500

• Cash is increasing 500 and Accounts Payable is increasing 500

• Cash is increasing 500 and Accounts Payable is decreasing 500