Bookkeeping Exam #1

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aznbabeforu
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283258
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Bookkeeping Exam #1
Updated:
2014-09-18 14:30:13
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Bookkeeping Danso Emmanual PBSC
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Flashcards for Professor Danso's first exam.
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  1. Define Creditor
    One to whom money is owed
  2. What is the Fundamental accounting equation?
    Assets = Liabilities + Owner's Equity
  3. Define Expenses
    The costs that relate to earning revenue (the cost of doing business); examples are wages, rent, interest, and advertising

    They may be paid in cash immediately or at a future time
  4. Define Accounts
    The categories under Assets, Liabilities, and Owner's Equity headings
  5. Define Owner's Equity
    The owner's right to or investment in the business
  6. Define Accounts Receivable
    An account used to record the amounts due from (legal claims against) charge customers
  7. Define Assets
    Cash, properties, and other things of value owned by an economic unit or a business entity
  8. Define Cash
    Money in coins or notes, as distinct from checks, money orders, or credit
  9. Define Business Entity
    A business enterprise, separate and distinct from the persons who supply the assets it uses
  10. Indicate whether the following changes in account would be a Debit or Credit

    To increase Assets
    Debit
  11. Indicate whether the following changes in account would be a Debit or Credit

    To increase Drawing
    Debit
  12. Indicate whether the following changes in account would be a Debit or Credit

    To increase Expenses
    Debit
  13. Indicate whether the following changes in account would be a Debit or Credit

    To decrease Liabilities
    Debit
  14. Indicate whether the following changes in account would be a Debit or Credit

    To decrease Capital
    Debit
  15. Indicate whether the following changes in account would be a Debit or Credit

    To decrease Revenue
    Debit
  16. Indicate whether the following changes in account would be a Debit or Credit

    To decrease Assets
    Credit
  17. Indicate whether the following changes in account would be a Debit or Credit

    To decrease Drawing
    Credit
  18. Indicate whether the following changes in account would be a Debit or Credit

    To decrease Expenses
    Credit
  19. Indicate whether the following changes in account would be a Debit or Credit

    To increase Liabilities
    Credit
  20. Indicate whether the following changes in account would be a Debit or Credit

    To increase Capital
    Credit
  21. Indicate whether the following changes in account would be a Debit or Credit

    To increase Revenue
    Credit
  22. The purchase of an Asset, like Equipment, on account will:

    A) increase total assets and increase total liabilities

    B) have no effect on total assets or liabilities

    C) increase total liabilities and decrease total assets

    D) increase total assets and increase owner's equity

    E) increase total assets and decrease owner's equity
    A) increase total assets and increase total liabilities
  23. Amounts owed by a business are referred to as:
    Liabilities
  24. When an owner deposits cash in an account in the name of the business, it is an increase to:
    Cash & Capital
  25. If an owner invests her computer and printer in the business, there is an increase to:

    A) Cash and Capital

    B) Computer Equipment and Drawing

    C) Cash and Drawing

    D) Computer Equipment and Capital

    E) Computer Equipment and Cash
    D) Computer Equipment and Capital
  26. The owner of a business invested $5,000 in the business

    What are the effects in the fundamental accounting equation?

    A) Assets increase $5,000; liabilities decrease $5,000; owner's equity increases $5,000.

    B) Assets increase $5,000; liabilities, no effect; owner's equity increases $5,000.

    C) Assets increase $5,000; liabilities increase $5,000; owner's equity, no effect.

    D) Assets increase $5,000; liabilities no effect; owner's equity decreases $5,000.
    B) Assets increase $5,000; liabilities, no effect; owner's equity increases $5,000.
  27. The purchase of an asset for cash will:

    A) increase total assets and increase total liabilities

    B) have no effect on total assets or liabilities

    C) increase total liabilities and decrease total assets

    D) increase total assets and increase owner's equity

    E) increase total assets and decrease owner's equity
    B) have no effect on total assets or liabilities
  28. The normal balance of an account is on the:
    Plus side
  29. When a T-account has several items on both sides, the balance of the account is written:

    A) on the side with the larger total

    B) on the side with the greatest number of items

    C) on the side with the least number of items

    D) on the side with the smaller total
    A) on the side with the larger total
  30. A debit may signify a decrease in:

    A) a liability account         

    B) an asset account

    C) a revenue account

    D) a liability and a revenue account

    E) an asset and a revenue account
    D) a liability and a revenue account
  31. A credit may result in:

    A) an increase in a liability account

    B) an increase in a revenue account

    C) a decrease in an asset account

    D) an increase in the Capital account

    E) all of these
    E) all of these
  32. Which of the following classifications of accounts has/have a normal credit balance?

    A) assets

    B) expenses

    C) drawing

    D) revenues and liabilities
    D) revenues and liabilities
  33. Which of the following is an asset account?

    A) Sales

    B) Office Equipment

    C) Supplies Expense

    D) Insurance Expense
    B) Office Equipment
  34. If a $47 cash purchase of supplies is recorded as a $57 debit to Supplies and a $57 credit to Cash, the result will be that:

    A) the trial balance will be out of balance

    B) Supplies will be overstated and Cash will be understated

    C) the Supplies account will be overstated

    D) the Cash account will be understated
    B) Supplies will be overstated and Cash will be understated

    Explanation: The supplies account will be $10 too high while the Cash account will be recorded too low at $10.
  35. A book of original entry is known as a:
    Journal
  36. An accountant wanting to know the balance of a particular account would refer to the:

    A) ledger

    B) cart of accounts

    C) book of original entry

    D) source document

    E) journal
    A) ledger
  37. The process of subtotaling both sides of an account and recording the amount on that side is known as:
    Footing
  38. If the number of an account is 211, this probably means that the account is:

    A) an account in the Revenues section

    B) an account in the Liabilities section

    C) an account in the Owner's Equity section

    D) an account in the Assets section
    B) an account in the Liabilities section
  39. The first step in the posting process is:

    A) recording the explanation in the journal

    B) recording the date in the ledger account

    C) recording the ledger account number in the journal

    D) recording the journal page number in the ledger account
    B) recording the date in the ledger account
  40. The proof that the debits and credits in the ledger are equal is called:

    A) the trial balance

    B) the statement of owner's equity

    C) the income statement

    D) the journal
    A) the trial balance
  41. A cash payment of $130 on account was recorded as a $310 debit to Accounts Payable and a $310 credit to Cash

    The necessary correcting entry is:

    A) debit Accounts Receivable, $180; credit Cash, $180

    B) debit Accounts Payable, $180; credit Cash, $180

    C) debit Cash, $180; credit Accounts Payable, $180

    D) debit Cash, $180; credit Accounts Receivable, $180
    C) debit Cash, $180; credit Accounts Payable, $180
  42. True or False?

    Capital represents the owner's investment, or equity, in a business
    True
  43. True or False?

    Asset are things of value owned by a business entity
    True
  44. True or False?

    Liabilities represent accounts owned to creditors
    True
  45. True or False?

    In the Fundamental Accounting Equation, assets are added to liabilities
    False
  46. True or False?

    The only way that the Fundamental Accounting Equation can stay in balance is by adding or subtracting equal amounts from both sides of the equation
    False
  47. True or False?

    The left side is always the debit side
    True
  48. True or False?

    In any transaction, the total dollar amount of debits must equal the total dollar amount of credits
    True
  49. True or False?

    If equipment is bought by paying $200 as a down payment and the remaining $400 in 30 days, total liabilities are increased by $200
    True
  50. True or False?

    A trial balance checks the equality of debits and credits
    True
  51. True or False?

    The first step in the posting process is to write the amount of the transaction in the ledger account
    False
  52. True or False?

    The general ledger is a collection of all the accounts
    True
  53. True or False?

    A ledger account contains a complete record of the transaction activity in the account
    True
  54. True or False?

    One type of ledger account form has a two-balance-column arrangement
    True
  55. True or False?

    The account number is recorded in the Post Ref column of the general journal when the transaction is first recorded in the journal
    False

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