Accounting I-Review

What does GAAP stand for?

• Generally Accepted Accounting Principles

• Guidelines for Applied Accounting Procedures

• Global Administration Accounting Procedures

• General Accounting Administrative Policies

What is the minimum number of accounts that a business transaction affects?

• One

• Four

• Two

• Three

A company receives a check that the bank determines is NSF/Dishonored. How does this affect the company’s cash balance?

• Decreases cash

• No affect

• Increases cash

• Increases liability

When a $100 liability is paid with cash, assets decrease by $100. What change is made to the liability account?

• Increase the same amount

• Decrease by the same amount

• Decrease by double the amount

• No change

What term is used to describe the steps completed to record financial information for a fiscal period?

• Financial system

• Financial cycle

• Accounting cycle

• Accounting equation

Accounts receivable had a debit balance of $1,500 on May 31. There were debit postings of $900 and credit postings of $700 during June. What was the accounts receivable balance on June 30?

• $1,300 debit

• $1,300 credit

• $1,700 credit

• $1,700 debit

Which of the following is used to make sound business decisions about the financial status of a company?

• General ledgers

• Financial statements

• Source documents

• Financial journals

What accounts are closed at the end of a fiscal period?

• Liability

• Asset

• Permanent

• Temporary

What is the term for the owner's financial claim of a business?

• Accounts payable

• Owners liability

• Owner’s equity

• Accounts receivable

If revenue/sales is $1,000, advertising expense is $300, miscellaneous expense is $100, and rent expense is $800, what is the result?

• Net income of $200

• Net loss of $1,200

• Net loss of $200

• Net income of $1,000