1.2 Accounting Review

It is common practice to buy items now and ___ for them at a future date.

Making a purchase on account is like paying with...

• CASH

• A DEBIT CARD

• A CREDIT CARD

The amount of money in Accounts Payable shows us...

• How much cash the business currently has

• The amount of ownership the owner has within the business.

• The amount of money we owe someone else

• The amount of money someone else owes us

In every transaction, there are _ accounts being affected.

• 2
• 3

• 5

• 1

When the 2 accounts are on the same side of the accounting equation,
one will increase and one will decrease.

• TRUE
• FALSE

Select ALL the ASSET accounts we learned in section 1.2.

• CAPITAL

• CASH

• ACCOUNTS PAYABLE

• SUPPLIES

• PREPAID INSURANCE

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

Bought supplies on account from Collins Coffee, $250.

How would we record this transaction?

• SUPPLIES +250

  ACCOUNTS PAYABLE +250

• SUPPLIES -250

  ACCOUNTS PAYABLE +250

• SUPPLIES +250

  ACCOUNTS PAYABLE -250

• SUPPLIES -250

  ACCOUNTS PAYABLE -250

Paid cash on account to Dunder Mifflin, $500.

What is happening in this transaction?

• -$500 CASH

  -$500 ACCOUNTS PAYABLE

• -$500 CASH

  +$500 ACCOUNTS PAYABLE

• +$500 CASH

  +$500 ACCOUNTS PAYABLE

• +$500 ACCOUNTS PAYABLE

  -$500 CASH