1.
The financial statement that reports the revenues and expenses for a period of time such as
a year or a month is the
Balance Sheet
Wrong.
The balance sheet reports assets, liabilities, and stockholders' equity.
Income Statement
Statement Of Cash Flows
Wrong.
This financial statement explains how a company's cash balance changed during the accounting period.
2. The financial statement that reports the assets, liabilities, and stockholders' (owner's) equity
at a specific date is the
Balance Sheet
Right!
Income Statement
The income statement reports revenues and expenses and the resulting net income.
Statement Of Cash Flows
This financial statement explains how a company's cash balance changed during the accounting period.
3. Under the accrual basis of accounting, revenues are reported in the accounting period when
the
Cash Is Received
Service Or Goods Have Been Delivered
4. 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 Up
5. Revenues minus expenses equals ____________________
net income
6. Resources owned by a company (such as cash, accounts receivable, vehicles) are reported on
the balance sheet and are referred to as ________________
Assets
7. Assets are usually reported on the balance sheet at which amount?
Cost
Right!
This is true because of the cost principle.
Current Market Value
Wrong.
Because of the cost principle, assets are generally not reported at their current market value.
Expected Selling Price
Wrong.
This would violate the cost principle.
8. Obligations (amounts owed) are reported on the balance sheet and are referred to as
__________
liabilities
9. Liabilities often have the word ____________________________ in their account title.
__________
payable
10. Unearned Revenues is what type of account?
Asset
Liability
Right!
The company that is to perform the service or is to deliver the product has received the cash in advance and
therefore has an obligation (liability) to deliver the service or the product.
Stockholders' (Owner's) Equity
11. Accounting entries involve a minimum of how many accounts?
One
Two
Right!
Because of double-entry, every transaction will affect at least two accounts.
Three
12. The listing of all of the accounts available for use in a company's accounting system is
known as the
__________
chart of accounts
13. Assets minus liabilities equals
stockholders' equity or owner's equity
(net assets if a nonprofit)
14. Which term is associated with "left" or "left-side"?
Debit
Credit
15. Which term is associated with "right" or "right-side"?
Debit
Credit
16. When cash is received, the account Cash will be
Debited
Credited
17. When a company pays a bill, the account Cash will be
Debited
Credited
18. What will usually cause an asset account to increase?
Debit
Credit
19. What will usually cause the liability account Accounts Payable to increase?
Debit
Credit
20. Entries to expenses such as Rent Expense are usually
Debits
Credits
21. Entries to revenues accounts such as Service Revenues are usually
Debits
Credits
