Accounting I Chapter 1 EXAM SPRING 2024

Classify these accounts.

Groups:

(a) Assets

,

(b) Liabilities

,

(c) Owner's Equity

• Cash

• Elena Charles, Drawing

• Supplies

• Prepaid Insurance

• Accounts Payable--Elena Charles

• Accounts Payable--Aaron Smith

• Equipment

• Accounts Payable--Letitia Charles

• Elena Charles, Capital

• Petty Cash

• Accounts Receivable--Patty Kim

Sam Smith owns a business called Sudsy Car Wash. Sam invested $25,000 in the business on July 1, 2024. What are the names of the accounts that are affected i​n this transaction?​ (a)   ​ (b)   ​ ​

• Sam Smith, Drawing
• Accounts Payable--Sam Smith
• Cash
• Sam Smith, Capital
• Accounts Receivable--Sam Smith

Match the following terms with the correct definitions.

• Accounting

• An equation that shows the relationship among assets, liabilities, and owner's equity.

• Accounting Equation

• A formal report that shows what an individual owes, owns and the difference between the two.

• Transaction

• Anything of value owned.

• Net Worth Statement

• Planning, recording, analyzing, and interpreting financial information.

• Asset

• A business activity that changes assets, liabilities, or owner's equity

Match the following

• Expense

• The amount in an account.

• Account Title

• An increase in owner’s equity resulting from the operation of a business.

• GAAP

• Standards and rules that accounts must follow.

• Revenue

• The name given to an account.

• Account Balance

• A decrease in owner’s equity resulting from the operation of a business.

Financial rights to the assets of a business.

• equities

• liabilities

• withdrawals

The difference between assets and liabilities.

• equity

• expenses

• revenue

An amount owed by a business.

• Liability

• Revenue

• Asset

A person or business to whom a liability is owed.

• Creditor

• Customer

• Accountant

Assets taken out of a business for the owner’s personal use.

• equities

• liabilities

• withdrawals

The use of ethics in making business decisions.

• business ethics

• ethics

• sociology