A business activity that changes assets, liabilities, or owner’s equity is called a/an:

When dividends are paid

When a company pays cash for an insurance premium:

In the transaction, paid cash to buy a computer, which accounts are affected?

In the transaction, owner withdrew cash for personal use, what type of accounts is affected?

A decrease in owner's equity resulting from costs of operating a business is a/an:

An increase in owner's equity resulting from the operation of a business is called a/an:

If a business paid $600 for an amount owed on a loan, this would:

When cash is paid to an advertising agency for advertisements for the business:

The name given to an account is an account:

A tool used to show an increase or decrease in an account caused by a transaction is a/an:

A book or file containing a separate page for each business account is called a/an:

The term credit means:

Which of the following is a group of accounts in that all normally have a debit balance?

Revenue accounts are increased by credits:

The normal balance of the Rent Expense account is:

In the transaction, paid cash for computer paper, you should

In the transaction, paid cash on account to Sam’s company, which accounts are affected?

Money taken out of the business by an owner for personal use is called a/an:

The normal balance of the Carolyn Smith, Drawing account is:

All these accounts have a debit balance except

All these accounts have a credit balance except:

Recording business transactions in a journal is called:

In the transaction, TFV travel agency paid $7,500 cash to buy computer equipment, you should:

The system of recording debit and credit parts of a transaction is known as:

An account is opened at the beginning of a fiscal period for each account listed on the:

The trial balance is:

What is the correct order of accounting process?

The trial balance makes sure that:

Bookkeeping differs from accounting in that bookkeeping primarily involves which part of the accounting process?

The field of accounting that focuses on providing information for external decision makers is ________.

The Dulce company has five plants nationwide that cost a total of $200 million. The current fair value of the plants is $600 million. The plants will be recorded and reported as assets at

The assumption that enables accounting to quantify economic event:

George and Ringo met at law school and decided to start a small law practice after graduation. They agree to split revenues and expenses evenly. The most common form of business organization for a business such as this would be a:

In terms of tax payment, the earnings of a sole proprietorship are not combined with the personal income of the proprietor.

Choose the INCORRECT statement:

Golden company had the following accounts and balances at the end of the first year of operations. What are total assets at the end of the year? Cash $78,000; Accounts Payable $20,000; Common Stock $21,000; Dividends $12,000; Operating Expenses $25,000; Accounts Receivable $51,000; Inventory $45,000; Long-term Notes Payable $33,000; Revenues $111,000; Salaries Payable $26,000

Liabilities represent one of the two claims to asset.

Montgomery Equipment Rental Company received $1,000 cash from a customer; the amount was owed to the business from the previous month. What is the effect of this transaction on the accounting equation?

Performed services for $5,000 on account; received cash on account, $9,000; paid $1,200 for repair expense; paid $1,900 to a supplier that it owed from the previous month. What is the combined effect on Cash of these June transactions?

Hollywood Talent Services is a sole proprietorship operated by Phil Morris. The net loss of Hollywood Talent Services is $14,000 for the year. The beginning and ending Morris’s Capital account was $50,000 and $32,000, respectively. During the year, Morris invested $10,000 and gained $12,000 revenue. Calculate Morris’s drawing.

A business can enter a transaction in which only the left side of the basic accounting equation is affected.

Which statement reports the revenues, gains, expenses, and losses of an entity?

Net income appears directly on the income statement and the owner’s equity statement, and indirectly in the balance sheet.

The terms debit and credit mean increase and decrease, respectively

Which accounts are increased by debits?

Which of the following is the correct sequence of steps in the recording process?

The proper order for the accounting process is:

The double – entry system means each transaction must be recorded twice.

In which order does the Journal list transactions?

Which of the following items would NOT be included in the journal entry for a transaction?

Which of the following is incorrect regarding a trial balance?

A trial balance is the list of only a company's asset and liability accounts, along with their account numbers, at a point in time.

A trial balance is a required financial statement.

Cash $4,000; Prepaid insurance $10,000; Accounts receivable $8,000; Accounts payable $4,000; Notes payable $7,000; Owner’s capital $3,000; Owner’s drawings $2,000; Revenues $32,000; Expenses $25,000. Calculate total credits on trial balance?

All fiscal year are calendar year.

Monthly and quarterly time periods are commonly referred to as fiscal periods.

The revenue recognition principle dictates that revenue should be recognized in the accounting records

Adjusting entries are required by the historical cost principle of accounting

The expense recognition principle recognizes expenses in the period they are paid.

Under accrual basis accounting, revenue is recorded only when cash is received.

The key differences between the cash basis and accrual basis of accounting are the timing and recognition of assets and liabilities.

ABC Company had the following transactions during the month. What would be the total amount of expenses for the month if ABC Company uses the cash basis method?

a) Paid $2,400 for insurance for the next 12 months.

b) Received $7,200 for services to be performed equally over the next 12 months.

c) Paid $1,400 for the current month's rent.

d) Paid $250 cash for office supplies.

e) Paid $700 in Salaries Expense.

f) Received $1,100 in cash for service revenue earned this month

Laramie Company signed a contract with a service provider for security services at a rate of $260 per month for the period of January through June. Laramie Company will pay the service provider the entire amount at the end of June. Laramie Company makes adjusting entries each month. During the month of June, it should record total security expense of $520.

Improvements, a home improvement magazine, collected $960,000 in subscription revenue on June 30. Each subscriber will receive an issue of the magazine in each of the next 12 months, beginning with the July issue. The company uses the accrual method of accounting. What is the amount of Subscription Revenue that has been earned by the end of December?

A&D Window Cleaning performed $450 of services but has not yet billed customers for the month. If A&D fails to record the adjusting entry, what is the impact on the balance sheet?

A company started the year with $300 of supplies. During the year, the company purchased an additional $1,300 of supplies. There were $900 of supplies on hand at the end of the year. An adjusting entry prepared at the end of the accounting period includes:

On February 1, Clovis Wilson Law Firm contracted to provide $3000 of legal services for the next three month and received $3000 cash from the client. Assuming Wilson records deferred revenue using the alternative treatment, what would be the adjusting entry recorded on February 28?

Global Enterprises Company signed a one-year $42,000 note payable at 8% interest on April 1, 2025. If Global only adjusts its accounts once a year at year-end, how much interest expense was accrued on December 31, 2025?

Depreciation is a valuation process that results in the reporting of the fair value of the asset.

Jones Company purchased a piece of equipment for $12,000. It has accumulated depreciation at the end of three years of $4,000. What is the book value of the equipment at the end of year 3?

Doorglam paid $98,000 for office furniture. The furniture is depreciated using the straight-line method and has an estimated service life of 7 years and no residual value. After three years of use, the accumulated depreciation of the furniture will be:

A worksheet can be used to help prepare adjusting entries
and the financial statements.

All the closing entries for a net loss are the same as the
closing entries for a net income.

The closing process helps in measuring each period's net
income separately from all other periods.

After closing entries have been posted ________.

Which of the following entries is necessary to close the
appropriate depreciation account at the end of the year?

Woods Company earned revenues of $11,000 and incurred
expenses of $5,000. The company's owner withdrew
$2,000. What is the balance in the Income Summary
account after closing net income or loss to the Owner’s
Capital account?

Which financial statement is always prepared first?

The beginning balance of Jones’s Capital account was
$10,000. The revenues and expenses were $240,000 and
$100,000, respectively. During the year, Mr. Jones withdrew
$5,000. The ending balance for Jones’s Capital account is:

Which of the following steps must be completed before
preparing the adjusted trial balance?

Olsten Company earned revenues of $61,000 and incurred
expenses of $71,000. No withdrawals were taken. The owner did not make any new capital contributions during the year. The company is a sole proprietorship. Which of
the following statements is correct?

On May 25, Mt. Hood Company received a $370 check from
Douglas Fir for services to be performed in the future. The
bookkeeper for Mt. Wood Company incorrectly debited
Cash for $370 and credited Accounts Receivable for $370.
The amounts have been posted to the ledger. To correct this
entry, the bookkeeper should

On May 10, Mercato Co. journalized and posted a $50 cash
collection on account from a customer as a debit to Cash
$50 and a credit to Service Revenue $50. The correcting
entries are:

In a balance sheet, assets are classified as either current or
long term, depending on

Land and building, machinery, furniture, investments all
come under Fixed assets.

Equipment would appear on the: