SI Accounting Exam 1 Review

Revenue is recorded when:

• Cash is exchanged

• The service is performed

• When the product is paid for

• When an asset is used up

Expense is recorded when:

• A service is performed

• incurred (supply used up, equip. depreciated, etc.)

• Cash is spent

• Cash is received

The "going concern" assumption is:

• A business will operate into the foreseeable future

• A business is separate from its owners

• The economic life is divided into periods

• Sufficient information for decision making must be disclosed

The fact that independent professionals will reach similar results in financial statements is what quality of accounting?

• Consistency

• Understandability

• Comparability

• Verifiability

The Measurement principle is:

• Assets are listed at historical cost and not fair value

• Assets are listed at fair value and not historical cost

• Revenues are recognized when earned

• Expenses are recorded when incurred

Apple recording a personal transaction that Steve Jobs enacted with his own money is a violation of which assumption:

• Economic entity

• Consistency

• Periodicity

• Measurement

Assets are generally listed in order of:

• $ value

• Alphabetically

• Liquidity

Which of the accounting equations are correct?

• Liabilities = Shareholder's Equity - Assets

• Shareholder's Equity = Assets - Liabilities

• Assets = Shareholder's Equity - Liabilities

• Liabilities = Assets + Shareholder's Equity

Every transaction affects:

• At least 2 accounts

• At most 4 accounts

• At most 2 accounts

• At least 1 account

Which of the following is the proper format for journal entries? (dots are tab spaces)

• Debit $x
  . . . . . . . . . .Credit $x

• Credit $x
  . . . . . . . . . .Debit $x

• . . . . . . . . . Debit $x
  Credit $x

• . . . . . . . . . Credit $x
  Debit $x