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Accounting Basics

Accounting Basics

20 Questions
1. The financial statement that reports the revenues and expenses for a period of time such as
a year or a month is the:
A Balance Sheet B Income Statement
C Statement of Cash Flows D None of These
2. The financial statement that reports the assets, liabilities, and stockholders' (owner's) equity
at a specific date is the:
A Balance Sheet B Income Statement
C Statement of Cash Flows D Cash Statement
3. Under the accrual basis of accounting, revenues are reported in the accounting period
when the:
A Cash is Received B Service or Goods Have Been Delivered
C End of the Month Has Arrived D Customer Pays
4. Resources owned by a company (such as cash, accounts receivable, vehicles) are reported
on the balance sheet and are referred to as __________.
A Assets B Liabilities
C Owner Equity D Equity
5. Assets are usually reported on the balance sheet at which amount?
A Cost B Current Market Value
C Expected Selling Price D None of These 6. Obligations (amounts owed) are reported on the balance sheet and are referred to
as __________.
A Assets B Liabilities
C Debt D Owner Equity
7. Liabilities often have the word __________ in their account title.
A Assets B Payable
C Paid D Equity
8. Unearned Revenues is what type of account?
A Asset B Liability
C Stockholders' Equity
9. Accounting entries involve a minimum of how many accounts?
A One B Two
C Three D Four
10. The listing of all of the accounts available for use in a company's accounting system is
known as the __________.
A Chart of Accounts B Journal
C Ledger D Credit Ledger
11. Which term is associated with ""left"" or ""left-side""?
A Debit B Credit
C Plus D Minus
12. Which term is associated with ""right"" or ""right-side""?
A Debit B Credit
C Plus D Minus
13. When cash is received, the account Cash will be
A Debited B Credited 14. When a company pays a bill, the account Cash will be
A Debited B Credited
15. What will usually cause an asset account to increase?
A Debit B Credit
16. What will usually cause the liability account Accounts Payable to increase?
A Debit B Credit
17. Entries to expenses such as Rent Expense are usually
A Debits B Credits
18. Entries to revenues accounts such as Service Revenues are usually
A Debits B Credits
19. Under the accrual basis of accounting, expenses are reported in the accounting period
when the
Cash is Paid Expense Matches the Revenues or is Used
A B
up
20. Revenues minus expenses equals:
A Assets B Liabilities
C Owner Equity D Net Income Answer Key
1.b 2.a 3.b 4.a
5.a 6.b 7.b 8.b
9.b 10.a 11.a 12.b
13.a 14.b 15.a 16.b
17.a 18.b 19.b 20.d"