Accounting Review

What is the Accounting Equation?

• Liabilities x Assets = Owner's Equity

• Assets = Liabilities + Owner's Equity

• Assets + Liabilities / Expenses = Owner's Equity

• None of the above

What does the acronym GAAP stand for?

• Generally Acquired Accounting Principles

• Great Accounting Association Principles

• Generally Accepted Accounting Principles

• General Asset Acquisition Principles

Accounting can be defined as:

• Using financial information to make business decisions

• Analyzing business transactions

• The process of recording financial transactions pertaining to business

• Managing people and money to make informed business decisions

An asset can be defined as

• Something that is owed to a business, or person

• A resource with monetary value that is owned by a business, individual, or country

• An obligation that a company has to pay someone

Which of the companies below committed large scale fraud by using unethical accounting practices?

• Wintrust Financial

• KPMG

• Ally Financial

• Enron

Items such as: land, inventory, and equipment can all be classified as what?

• Assets

• Liabilities

• Owner's Equity

• All of the above

A credit is an entry that increases a liability or decreases an asset

• True

• False

A debit is an entry that decreases a liability or increases an asset

• True

• False

On a T-Chart in accounting, debit is always located on which side?

• Debits are not on a T-chart

• Debits are located on the right side

• Debits are located on the left side

Wages payable, Interest payable are examples of what?

• Owner's Equity

• Assets

• Liabilities

• All of the above