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WorksheetsAccounting Basics - Ch1.2 (Sub)
Total questions: 55
Worksheet time: 31mins
How do you classify "Cash"?
asset
liability
owner's equity
How do you classify "Capital"?
asset
liability
owner's equity
How do you classify "Accounts Payable"?
asset
liability
owner's equity
How do you classify "Supplies"?
asset
liability
owner's equity
How do you classify "Prepaid Insurance"?
asset
liability
owner's equity
How do you classify "Accounts Receivable"?
asset
liability
owner's equity
How do you classify an expense?
asset
liability
owner's equity
How do you classify revenue?
asset
liability
owner's equity
The accounting equation should remain in balance after each transaction
True
False
A business transaction affects at least 2 accounts
True
False
"Assets + Liabilities = Owner Equity" is another way to express the accounting equation
True
False
The account receivable is an example of a(n)...
Asset
Liability
Owner's Equity
If a business has assets of $5,600 and liabilities of $900, the owner's equity is...
6,500
900
4,700
5,600
If a business purchases a calculator on account, the accounts affected by this transaction are...
Cash in Bank & Accounts Payable
Office Equipment & Accounts Receivables
Office Equipment & Cash in Bank
Office Equipment & Accounts Payable
When a business buys an item on credit
Property
Investment
On Account
Financial claim
What two accounts are changing? Bought supplies on account.
Cash - Supplies +
Cash + Supplies -
Supplies + Accounts Payable +
Supplies + Accounts Payable -
What two accounts are changing? Paid cash for supplies
Cash + Supplies +
Cash - Supplies +
Cash - Supplies -
What is an expense?
Something expensive
Increases in the Cash account
Decreases in the Prepaid Insurance account
Cost of goods & Services used to operate a business
What is Revenue?
A part of the business plan
Something the IRS gives you
An increase in equity due to the sale of goods
Cash paid to a creditor
Capital is a/an ______ account, and ______ increases it.
liability, debit
asset, debit
none of the above
Part 1: Your company buys $5000 of equipment with cash. Your cash account _______________ and equipment _______________.
Part 2: A decrease represents _______________ and an increase represents _______________.
increases, decreases
debit, increase
decreases, increases
credit, debit
Equity accounts include:
Capital
Common stock
Inventory
Retained earnings
The normal balance side of any expense account is the
debit side
credit side
right side
none of these
When you receive cash from sales, what is your debit account?
Cash
Accounts Receivable
Sales
Capital
To decrease an asset, you _____ it.
Debit
Credit
Owner's drawing and expenses increase with a
debit
credit
Describe the process of preparing financial statements in the accounting cycle.
Collecting customer feedback
Calculating employee salaries
Gathering financial data, adjusting for accruals and deferrals, preparing financial statements, and closing temporary accounts
Creating marketing materials
What is the purpose of closing entries in the accounting cycle?
To transfer the balances of temporary accounts to the retained earnings or owner's equity account
To update the inventory records
To close the business for the accounting period
To calculate the total revenue for the period
Describe the process of journalizing transactions in the accounting cycle.
Posting transactions to the ledger by adding and subtracting amounts
Recording transactions in the general journal by debiting and crediting the appropriate accounts.
Sending invoices to customers for payment
Creating financial statements for the accounting period
What are the different types of accounts used in recording transactions?
Red, Blue, Green, Yellow, Orange
Dog, Cat, Bird, Fish, Elephant
Asset, Liability, Equity, Revenue, Expense
Monday, Tuesday, Wednesday, Thursday, Friday
Paid rent for the month, P35,000.
Increase in an Asset; Decrease in another Asset
Increase in an Asset; Increase in a Liability
Increase in an Asset; Increase in Equity
Decrease in an Asset; Decrease in a Liability
Decrease in an Asset; Decrease in Equity
When a business receives cash on account, the accounts affected are Cash and ________.
Inventory
Accounts Payable
Accounts Receivable
Sales
What is the meaning of debits in accounting?
Entries made on the top side of a ledger account.
Entries made on the left side of a ledger account
Entries made on both sides of a ledger account.
Entries made on the right side of a ledger account.
What is the difference between income and expenses?
Income is the money spent or paid out, while expenses are the money earned or received.
Income is the money earned or received, while expenses are the money spent or paid out.
Income and expenses are the same thing.
Income is the money earned from investments, while expenses are the money spent on necessities.
What are liabilities in accounting?
Liabilities are the financial obligations or debts that a company owes to external parties.
Liabilities are the profits earned by a company.
Liabilities are the financial assets that a company owns.
Liabilities are the expenses incurred by a company.
What is the Accounting Equation?
Liabilities x Assets = Owner's Equity
Assets = Liabilities + Owner's Equity
Assets + Liabilities / Expenses = Owner's Equity
None of the above
Which of the companies below committed large scale fraud by using unethical accounting practices?
Wintrust Financial
KPMG
Ally Financial
Enron
On a T-Chart in accounting, debit is always located on which side?
Debits are not on a T-chart
Debits are located on the right side
Debits are located on the left side
Wages payable, Interest payable are examples of what?
Owner's Equity
Assets
Liabilities
All of the above
Assets are $120,000. Owner's Equity is $95,000. What is the Liability?
$215,000
$25,000
None of the Choices
Assets are $50,000. Liabilities are $12,000. What is Owner's Equity?
$38,000
$62,000
None of the Choices
Mrs. Smith invests $20,000 in her new company. Which of the following would be correct?
+ $20,000 Cash; + $20,000 Mrs. Smith, Capital
- $20,000 Cash; - $20,000 Mrs. Smith, Capital
+ $20,000 Cash; - $20,000 Mrs. Smith, Capital
- $20,000 Cash; + $20,000 Mrs. Smith, Capital
Mrs. Smith bought $200 in supplies. Which of the following would be correct?
+ $200 Cash; + $200 Supplies
- $200 Cash; - $200 Supplies
+ $200 Cash; - $200 Supplies
- $200 Cash; + $200 Supplies
Brea, Robert, and Lincoln are college friends who want to start a business. Brea has creative ability, Robert's expertise is selling, and Lincoln's expertise is management. However, each has limited capital. Their ideal type of business ownership is a
merger
partnership
franchise
corporation
"To form my business, I used all of my savings and borrowed from the bank, and I'm personally liable for all of the debts."
Partnership
Sole Proprietorship
Corporation
Cooperative
The Scott Company decided to sell stock to raise capital. Under what form of business organization does the company operate?
Corporation
Cooperative
Partnership
Sole proprietorship
Which type of business allows the owner to keep all of the profit for him/herself?
Partnership
Franchise
Sole Proprietorship
Corporation
If a company has more expenses than revenue for the period, it has a ____.
Net Income
Net Loss
Income = Income - Expenses
Revenue - Expenses = Net Income (Loss)
Revenue + Expenses = Income/Loss
Expenses = Net Income + Revenue
Balance Sheet
Statement of Retained Earnings
Statement of Cash Flows
Income Statement
Grace, Ava, and Daniel are playing a game about financial statements. They need your help! Which financial statement shows a company's assets, liabilities, and shareholders' equity at a specific point in time?
balance sheet
statement of retained earnings
cash flow statement
income statement
Mia, Zoe, and Aiden are playing a game of 'Financial Whiz Kids'. They stumbled upon a question that they need your help with. Can you tell them which financial statement shows the changes in a company's cash and cash equivalents over a period of time?
Statement of Retained Earnings
Balance Sheet
Income Statement
Statement of Cash Flows
Luna, Anika, and Aiden are learning about income statements. They want to know how to calculate the net income. Can you help them?
Total revenues minus total expenses
Total revenues divided by total expenses.
Total revenues plus total expenses.
Total revenues multiplied by total expenses.
