A business is earning a profit if the selling price of its product covers the cost of the raw materials needed to make the product

Accounting is often called the "language of business" because_____

Only businesses that earn a profit will have the economic resources to continue to operate

Which of the following would not be considered a service business

In a business, it is the entrepreneur who_____

The most common time period covered by an accounting report is one _____

Corporations often start out as sole proprietorships or partnerships

All businesses set up their accounting systems in the same manner

Service businesses are not intended to operate as a profit

Basic accounting rules and procedures differ from business to business

A partnership can be owned by more than two individuals

The life of a business is divided into specific periods for reporting purposes

The type of a business that provides a product or a service, makes sales to customers, and incurs expenses is ______

The most common form of business organization is the ______

An example of an accounting assumption is _______

A business owner must always get permission to operate from the state government

An example of an internal user of accounting information is ______

The assumption that requires accounting reports to be prepared for a specific period of time is _______q

In a free enterprise system, businesses compete for customers

GAAP is a way to communicate financial information in a form understood by those interested in the operations and financial condition of the business

The corporation is the easiest form of business to organize

The amount of money earned after the cost of operating a business are paid is ______

A creditor has a financial claim to the assets of a business

A business transaction that involves a purchase on account is considered to be a(n) ______

The increases and decreases caused by business transactions are recorded in specific accounts

The total financial claims do not have to equal the total costs of the property

A business transaction affects at least two accounts

"Assets + Liabilities = Owner's Equity" is another way to express the basic accounting equation

The word equities refers to claims against the assets of a business by______

The purchase of a desk on account will increase Office Furniture and will also increase_______

An account is a record of only the increases in the balance of a specific item such as cash or equipment

The account Accounts Receivable is an example of a(n) ______

After each transaction, the basic accounting equation should remain in balance

If the creditor's financial claim to property totals $1,000 and the owner's financial claim to property totals $11,000, the property value is_______

One of the purposes of accounting is to provide financial information about property and the rights of the property

The free enterprise system is based on the right to own property

All of the following account titles are asset titles except

The owner's claims to the assets of a business are liabilities

If Paul Abdou deposits $30,000 in a checking account in the name of his business, the two accounts affected are ______

Each of the following is a business expense except a payment for _____

What is the normal balance for an asset account

An increase in a liability account is recorded as a _______

A decrease in an asset account is recorded as a _______

The normal balance for Accounts Receivable is a _____

The normal balance for Accounts Payable is a _____

An increase to Office Furniture is a ______

Every transaction affects two or more accounts and is recorded by equal amounts of debits and credits

A business groups its accounts in a ledger

The top of the T account is used for account titles. Credits are entered on the left side of the T, debits are on the right.

The withdrawal of cash by the owner of a business decreases the owner's equity

The total of all accounts with normal debit balances should equal the total of all accounts with normal credit balanced if the rules of debit and credit were followed correctly.

Income from Fees is a permanent account

Permanent accounts start each accounting period with a zero balance

Revenues increase owner's equity, and increases in revenues are recorded as debits.

Liability, expense, and capital accounts all have normal credit balances.

The title of the account to be credited is indented from the left edge of the Description column so it can be easily distinguishable from the debit part.

Never erase an error in a journal entry because an erasure looks suspicious

For every transaction recorded in the general journal, these items are always written: date, account titles, amounts, and source document or a brief explanation.

The type of source document prepared depends upon the nature of the transaction

Dollar signs, commas, and decimals are not used when entering amounts in the journal.

A journal is like a diary of a business because it is the only place where complete details of a transaction are recorded.

An accounting period that begins on July 1 and ends on June 30 is a calendar-year accounting period.

A(n) ____________ is often called a book of original entry

The various activities a business completes to organize its accounting records in an orderly fashion is called the---

A(n)____ is any type of business paper that verifies that a transaction occurred.

A(n) ___ accounting period begins on January 1 and ends of December 31.

The ___ is an all-purpose journal used for recording business transactions.

Another term used for "recording" a business transactions is___.

A(n)______ is an accounting period of twelve months ending on the last day of any month except December.

To verify a source document means to check the accuracy of the information on the document.

Recording transactions is the second step in the accounting cycle.

A fiscal period may be one month, three months, six months or even one year, but usually is one year.

If a transaction is journalized on the 8th and is posted on the 10th, the date entered in the DATE column of the ledger account is the 10th.

The easiest way to post is from left to right in a ledger account because there is less chance of omitting data.

Every journal entry requires a posting to at least two ledger accounts.

Opening an account in a computerized system is entirely different from opening an account in a manual system.

The notation "G3" in the posting reference column of a ledger account indicates the data was posted from general journal page 3.

How often posting occurs depends on the size of the business, the number of transactions, and whether posting is done manually or electronically.

A trial balance is prepared after posting is completed.

In the preparation of a trial balance, all accounts are listed in the order in which they appear on the chart of accounts, including those accounts with a zero-balance.

To locate a trial balance error, the first step is to check the postings from the journal to the individual ledger accounts.

Adding all the debit balances and all the credit balances and then comparing the two totals to see whether they are equal is called ----

The accounts used by a business can be kept on pages or cards, which are kept together in a book or files called a(n)__________

The accounting stationery used to record financial information about specific accounts is a(n)_______

When posting a correcting entry, the phrase "correcting entry" is usually written in the explanation of column of the ledger account.