Accounting Basics(Quick Test #1)

1. The financial statement that reports the amount of a company’s assets is the __________.

2. The financial statement that reports the company’s revenues and expenses is the __________.

3. The heading of the balance sheet will indicate which of the following?

4. Under the accrual method of accounting, the interest expense that is reported on the income statement is the amount of interest that was __________.

5. A company’s superior management team and the company’s logo will be reported as assets on its balance sheet.

6. The financial statement that reports information in a format that is similar to the accounting equation is the __________.

7. The financial statement that reports the amount of depreciation expense applicable to the current accounting period is the __________.

8. Depreciation of a company’s equipment is recorded primarily to __________.

9. Which of the following assets will not be depreciated?

10. The amount of prepaid insurance that has not expired as of the end of an accounting period should be reported as __________.

11. Under which method of accounting are revenues reported on the income statement in the period in which they are earned?

12. Under the accounting or bookkeeping system known as double entry, how many general ledger accounts will be involved in each transaction?

13. Which word indicates the left side of a general ledger account?

14. A sale is made with credit terms that allow the customer to pay in 30 days. Under the accrual method of accounting, which account should be debited at the time of the sale?

15. When the company receives the money from its customer that was billed in the prior month, which account should be credited?

16. When a company records a check for its monthly rent, the account Rent Expense is __________.

17. When a company writes a check to pay its rent, the account Cash will be __________.

18. The account Prepaid Insurance is expected to have this type of balance.

19. When a company receives goods or services on credit, the amount is recorded in Accounts Payable as a __________.

20. Expenses will cause a company’s total amount of owner’s equity or stockholders’ equity to __________.

21. At the time that a company buys an asset for cash, the total amount of its owner’s equity or stockholders’ equity will __________.

22. What is the effect on a corporation’s accounting equation when it uses the accrual method and bills a client for the services it had just provided?

23. The account Wages Payable will be included in which side of the accounting equation?

24. The account Unearned Revenues is which type of account?

25. The balances in which accounts are closed at the end of the accounting year?

26. The listing which includes the titles of the general ledger accounts available for recording transactions, but excludes the account balances, is the __________.

27. In accounting, the word expenses has the same meaning as the word payments.

28. Under the accrual method of accounting, which of the following are revenues?

29. The amount reported as stockholders’ equity should be adjusted at the end of the year so that it is equal to the corporation’s market value.

30. Common stock and retained earnings are part of a corporation’s __________.