Purchasing office supplies

Paying salaries

Hiring a new employee

Receiving a loan

Posting

Journalizing

Summarizing

Communicating

Luca Bartolomeo de Pacioli

Adam Smith

Karl Marx

Henry Ford

Managerial accounting

Financial accounting

Cost accounting

Tax accounting

Generally Accepted Accounting Principles

Global Accounting and Auditing Practices

Government Accounting and Auditing Policies

General Accounting and Auditing Procedures

Separate entity concept

Going concern assumption

Accrual basis of accounting

Stable monetary unit concept

Cost principle

Matching principle

Revenue recognition principle

Materiality principle

Relevance

Faithful representation

Comparability

Efficiency

Assets = Liabilities + Equity

Liabilities = Assets + Equity

Equity = Assets + Liabilities

None of the above

Accounts receivable are formal promises, while notes receivable are informal promises.

Notes receivable are formal promises, while accounts receivable are informal promises.

Accounts receivable are for goods sold, while notes receivable are for services rendered.

Notes receivable are for goods sold, while accounts receivable are for services rendered.

To estimate the amount of uncollectible accounts receivable

To track the amount of cash received from customers

To record the cost of goods sold

To calculate the net income for the period

Accounts payable

Notes payable

Interest payable

Owner's capital

Owner's capital represents the owner's investment in the business, while owner's drawings represent the owner's withdrawals from the business.

Owner's drawings represent the owner's investment in the business, while owner's capital represents the owner's withdrawals from the business.

Owner's capital is a liability, while owner's drawings is an asset.

Owner's drawings is a liability, while owner's capital is an asset.

To track financial transactions

To prepare financial statements

To comply with legal requirements

All of the above

Identifying business transactions

Recording transactions in a journal

Posting transactions to a ledger

Preparing a marketing plan

Internal events occur within the business, while external events occur between the business and external parties.

External events occur within the business, while internal events occur between the business and external parties.

Internal events are recorded in the journal, while external events are recorded in the ledger.

External events are recorded in the journal, while internal events are recorded in the ledger.

Every transaction affects at least two accounts.

Every transaction must be recorded in both the journal and the ledger.

Every transaction must be approved by the owner of the business.

None of the above

Debit

Credit

It depends on the specific asset

None of the above

To ensure that the total debits equal the total credits

To prepare the financial statements

To record transactions in a chronological order

To analyze the financial performance of the business

Permanent accounts are used to track assets, liabilities, and equity, while temporary accounts are used to track revenues and expenses.

Temporary accounts are used to track assets, liabilities, and equity, while permanent accounts are used to track revenues and expenses.

Permanent accounts are closed at the end of the accounting period, while temporary accounts are not.

Temporary accounts are closed at the end of the accounting period, while permanent accounts are not.

To ensure that revenues and expenses are recorded in the correct accounting period

To update the balances of asset, liability, and equity accounts

To prepare the financial statements

All of the above

To transfer the balances of temporary accounts to permanent accounts

To update the balances of asset, liability, and equity accounts

To prepare the financial statements

All of the above

To correct errors in the accounting records

To update the balances of asset, liability, and equity accounts

To prepare the financial statements

All of the above

A balance sheet shows the financial position of a business at a specific point in time, while an income statement shows the financial performance of a business over a period of time.

An income statement shows the financial position of a business at a specific point in time, while a balance sheet shows the financial performance of a business over a period of time.

A balance sheet is used by internal users, while an income statement is used by external users.

An income statement is used by internal users, while a balance sheet is used by external users.

Cash

Accounts receivable

Inventory

Owner's capital

Accounts payable

Notes payable

Interest payable

Owner's drawings

Debit

Credit

It depends on the specific liability

None of the above

Debit

Credit

It depends on the specific expense

None of the above

Debit

Credit

It depends on the specific revenue

None of the above

To organize and classify accounts

To track the flow of cash

To prepare the financial statements

To analyze the financial performance of the business

A debit increases the balance of an asset account, while a credit decreases the balance of an asset account.

A credit increases the balance of an asset account, while a debit decreases the balance of an asset account.

A debit increases the balance of a liability account, while a credit decreases the balance of a liability account.

A credit increases the balance of a liability account, while a debit decreases the balance of a liability account.

A journal is a chronological record of transactions, while a ledger is a grouping of accounts.

A ledger is a chronological record of transactions, while a journal is a grouping of accounts.

A journal is used to track the flow of cash, while a ledger is used to prepare the financial statements.

A ledger is used to track the flow of cash, while a journal is used to prepare the financial statements.

To ensure that the total debits equal the total credits after closing entries have been made

To prepare the financial statements

To record transactions in a chronological order

To analyze the financial performance of the business

Cash basis accounting recognizes revenues when cash is received and expenses when cash is paid, while accrual basis accounting recognizes revenues when they are earned and expenses when they are incurred.

Accrual basis accounting recognizes revenues when cash is received and expenses when cash is paid, while cash basis accounting recognizes revenues when they are earned and expenses when they are incurred.

Cash basis accounting is used by small businesses, while accrual basis accounting is used by large businesses.

Accrual basis accounting is used by small businesses, while cash basis accounting is used by large businesses.

 To show the changes in cash during a period

 To show the financial position of a business at a specific point in time

 To show the financial performance of a business over a period of time

To show the changes in equity during a period

 To show the financial position of a business at a specific point in time

To show the financial performance of a business over a period of time

 To show the changes in cash during a period

To show the changes in equity during a period

 To show the financial position of a business at a specific point in time

 To show the financial performance of a business over a period of time

To show the changes in cash during a period

To show the changes in equity during a period

DEALER: Drawings, Expenses, Assets, Liabilities, Equity, Revenue

The process of accounting includes identifying, recording, and communicating financial transactions.

A currency that maintains its sign/unit on financial reports

Cost Principle

Acquired Value

Price Value

Revenue should be recognized when earned and the service is rendered regardless if cash receipt.

Notes Receivable are written notes to be receive representing amounts owed to a company.

Unearned income is collected in advanced before earned.

Amounts transferred (journal-ledger)

Social Media

Promoting

Giving awareness

Drawings, Expenses, Assets, Liabilities, Equity, Revenue.

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