SUBJECTS
|
BROWSE
|
CAREER CENTER
|
POPULAR
|
JOIN
|
LOGIN
Search
Test your basic knowledge |
Business Accounting Basics
Start Test
Study First
Subject
:
business-skills
Instructions:
Answer 50 questions in 15 minutes.
If you are not ready to take this test, you can
study here
.
Match each statement with the correct term.
Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.
This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.
1. Cash Principle
prepare adjusted trial balance
each owner has its own books - records - financial statements that are seperate.
a company uses the same method each year for calculating inventory
record assets of cost paid to acquire them - continue to value assets at historical cost until sold - more objective than market cost.
2. Profit Margin %
a company uses the same method each year for calculating inventory
Current Assets/Current Liabilities
Net Income/Sales
Credit balance - Balance sheet and Retained Earnings - Permanent
3. Income Satement Expenses
Cost of Goods Sold - Utilities Expense - Supplies Expense - Wages Expense - Depreciation Expense - Interest Expense - Rent Expense
to those willing to take time to understand it
prepare closing entry-post to general ledger
decrease equity - debit balance
4. 4th step of analyzing transactions
companies must use GAAP for all significant transactions that will affect an investor's decisions - but insignificant transactions may be treated in alternative ways.
Close out all revenue and expense accounts into retained earnings.
record transactions in general journal
does the equation remain in balance?
5. Understandability
to those willing to take time to understand it
credit balance - income statement - temporary - Revenue
Retained earnings beg. balance - Net income - dividends.
prepare post-closing trial balance
6. Accounting Equation
companies must use GAAP for all significant transactions that will affect an investor's decisions - but insignificant transactions may be treated in alternative ways.
Assets= Liabilities+Owners Equity<Contributed Capital><Retained Earnings-Revenues - Expenses>
analyze transactions from external events
decrease equity - debit balance
7. Interest Revenue
debit balance - Balance sheet - permanent - asset
Credit balance - income statement - temporary - revenues
prepare Unadjusted trial balance
cost-salvage value/years of life
8. Calculating Interest Formula
the original amount to purchase land is verifiable through the contract documents
Payment x Rate x Time
credit balance - income statement - temporary - Revenue
Contributed Capital - Retained Earnings - Dividends
9. 3rd step of Accounting Cycle
debit balance - Balance sheet - Permanent - asset
prepar journal to general ledger
Revenues-Expenses
Credit Balance - Balance Sheet - Permanent - owners equity
10. 5th step of Accounting Cycle
prepare post-closing trial balance
debit balance - balance sheet - permanent - asset
record adjusting entries to general journal
credit balance - balance sheet - permanent - liabilities
11. Accts on Statement of Retained Earnings
Credit Balance - Balance Sheet - permanent - liability
analyze transactions from external events
Retained earnings beg. balance - Net income - dividends.
Debit Balance - Balance sheet - permanent - asset
12. Dividends
how we measure - assumes economic mean
a company uses the same method each year for calculating inventory
Debit Balance - Retained Earnings - Temporary - Owners Equity
Contra Asset - noncurrent asset
13. 10th step of Accounting Cycle
prepare post-closing trial balance
(cash - accts revievable - inventory) turn into cash within 12 months
an appraised value for land gives additional information that is useful to investors
decrease equity - debit balance
14. 2nd step of analyzing transactions
clarify accounts as Asset - Liabilities - Owners Equity - Expense - Revenue
similar to unearned revenue- liabilities
post journal to general ledger
Current Assets/Current Liabilities
15. Economic Equity
prepare financial statements
Assets - Liabilities - Equity
each owner has its own books - records - financial statements that are seperate.
longterm liabilities
16. Unearned revenue
Credit Balance - Balance Sheet - permanent - liability
debit balance - balance sheet - permanent - asset
record transactions in general journal
credit balance - balance sheet - permanent - liabilities
17. NonCurrent Liabilities
longterm liabilities
Credit balance - Balance sheet and Retained Earnings - Permanent
Debit Balance - Income Statement - Temporary - expense
companies must reduce the value of land - if the value is lower than its original cost.
18. Relevance
debit balance - Balance sheet - Permanent - asset
Credit Balance - Balance Sheet - permanent - liability
an appraised value for land gives additional information that is useful to investors
companies must reduce the value of land - if the value is lower than its original cost.
19. Materiality
debit balance - income statement - temporary - expense
companies must use GAAP for all significant transactions that will affect an investor's decisions - but insignificant transactions may be treated in alternative ways.
record transactions in general journal
prepare Unadjusted trial balance
20. Sales revenue
credit balance - income statement - temporary - Revenue
how we measure - assumes economic mean
companies must use GAAP for all significant transactions that will affect an investor's decisions - but insignificant transactions may be treated in alternative ways.
record transactions in general journal
21. 8th step of Accounting Cycle
Assets - Liabilities - Equity
prepare financial statements
companies must reduce the value of land - if the value is lower than its original cost.
prepare post-closing trial balance
22. Accumlated depreciation
Close out all revenue and expense accounts into retained earnings.
decrease equity - debit balance
determine the direction of the effect. debit or credit
Contra Asset - noncurrent asset
23. Going Concern
debit balance - balance sheet - permanent - asset
cost-salvage value/years of life
assumes business will fully indefinitely ink the foreseeable futyre - justifies one of historical cost.
debit balance - Balance sheet - Permanent - asset
24. Balance sheet Equity
debit balance - balance sheet - permanent - asset
prepar journal to general ledger
Contributed Capital - Retained Earnings - Dividends
credit balance - balance sheet - permanent - liabilities
25. Dividends
Current Assets/Current Liabilities
decrease equity - debit balance
Retained earnings beg. balance - Net income - dividends.
prepare Unadjusted trial balance
26. Customer deposits
prepare adjusted trial balance
similar to unearned revenue- liabilities
companies must reduce the value of land - if the value is lower than its original cost.
prepare post-closing trial balance
27. Building
the original amount to purchase land is verifiable through the contract documents
credit balance - balance sheet - permanent - liabilities
Credit balance - Balance sheet and Retained Earnings - Permanent
debit balance - Balance sheet - Permanent - asset
28. Balance Sheet Assets
debit balance - Balance sheet - Permanent - asset
copyright - long term assets - noncurrent
prepare financial statements
Cash - Accounts recievable - supplies - inventory - prepaid rent - equipment - accumulated depreciation - goodwill - investments
29. Reliability
the original amount to purchase land is verifiable through the contract documents
credit balance - balance sheet - permanent - liabilities
(cash - accts revievable - inventory) turn into cash within 12 months
determine the direction of the effect. debit or credit
30. Calculating Cost depreciation
Cost of Goods Sold - Utilities Expense - Supplies Expense - Wages Expense - Depreciation Expense - Interest Expense - Rent Expense
each owner has its own books - records - financial statements that are seperate.
cost-salvage value/years of life
debit balance - Balance sheet - permanent - asset
31. Common Stock
decrease equity - debit balance
Credit Balance - Balance Sheet - Permanent - owners equity
Assets - Liabilities - Equity
prepare closing entry-post to general ledger
32. Inventory
an appraised value for land gives additional information that is useful to investors
Sales Revenues
similar to unearned revenue- liabilities
debit balance - Balance sheet - permanent - asset
33. 1st step of Accounting Cycle
clarify accounts as Asset - Liabilities - Owners Equity - Expense - Revenue
Payment x Rate x Time
credit balance - balance sheet - permanent - liabilities
analyze transactions from external events
34. Current Assets
companies must reduce the value of land - if the value is lower than its original cost.
debit balance - income statement - temporary - expense
(cash - accts revievable - inventory) turn into cash within 12 months
Credit Balance - Balance Sheet - permanent - liability
35. Multistep Income Statement
prepare closing entry-post to general ledger
analyze transactions from external events
Sales-CGS=Gross Profit-selling expenses-admin expenses=Incom for operations+interest revenue-Interest expense=Income before tax-tax expense=Net income
Credit Balance - Balance Sheet - Permanent - owners equity
36. 3rd step of analyzing transactions
credit balance - balance sheet - permanent - liabilities
each owner has its own books - records - financial statements that are seperate.
an appraised value for land gives additional information that is useful to investors
determine the direction of the effect. debit or credit
37. 1st Step of Analying Transactions
Sales Revenues
Payment x Rate x Time
similar to unearned revenue- liabilities
Identify Accounts affected
38. Current Ratio
Current Assets/Current Liabilities
Sales Revenues
the original amount to purchase land is verifiable through the contract documents
Credit Balance - Balance Sheet - Permanent - owners equity
39. Goodwill
determine the direction of the effect. debit or credit
debit balance - balance sheet - permanent - asset
wages payable - utilities payable - interest payable - unearned revenue - note payable
prepare Unadjusted trial balance
40. 6th step of Accounting Cycle
copyright - long term assets - noncurrent
Cost of Goods Sold - Utilities Expense - Supplies Expense - Wages Expense - Depreciation Expense - Interest Expense - Rent Expense
post journal to general ledger
prepare Unadjusted trial balance
41. Closing Entries
Sales Revenues
prepare post-closing trial balance
Payment x Rate x Time
Close out all revenue and expense accounts into retained earnings.
42. 7th step of Accounting Cycle
does the equation remain in balance?
companies must reduce the value of land - if the value is lower than its original cost.
the original amount to purchase land is verifiable through the contract documents
prepare adjusted trial balance
43. Cost of Goods Sold
clarify accounts as Asset - Liabilities - Owners Equity - Expense - Revenue
copyright - long term assets - noncurrent
Retained earnings beg. balance - Net income - dividends.
Debit Balance - Income Statement - Temporary - expense
44. Intangibles
debit balance - balance sheet - permanent - asset
debit balance - balance sheet - permanent - asset
copyright - long term assets - noncurrent
debit balance - Balance sheet - Permanent - asset
45. Consistency
Payment x Rate x Time
credit balance - balance sheet - permanent - liabilities
a company uses the same method each year for calculating inventory
Sales-CGS=Gross Profit-selling expenses-admin expenses=Incom for operations+interest revenue-Interest expense=Income before tax-tax expense=Net income
46. NonCurrent Assets
Retained earnings beg. balance - Net income - dividends.
Revenues and Expenses
(long-term) assets (building - land - equipment)
how we measure - assumes economic mean
47. Accounts on Income Statement
Revenues and Expenses
Close out all revenue and expense accounts into retained earnings.
companies must use GAAP for all significant transactions that will affect an investor's decisions - but insignificant transactions may be treated in alternative ways.
Current Assets/Current Liabilities
48. 2nd step of Accounting Cycle
Credit Balance - Balance Sheet - Permanent - owners equity
record transactions in general journal
companies must reduce the value of land - if the value is lower than its original cost.
the original amount to purchase land is verifiable through the contract documents
49. Note Payable
Contra Asset - noncurrent asset
Credit Balance - Balance Sheet - permanent - liability
(long-term) assets (building - land - equipment)
debit balance - Balance sheet - permanent - asset
50. Retained Earnings
cost-salvage value/years of life
Revenues-Expenses
Credit balance - Balance sheet and Retained Earnings - Permanent
Credit Balance - Balance Sheet - Permanent - owners equity
Tiny Skills: 250+ Skill Guides in 1 Book
13 Skills Types | 550 Pages | Only $9.95 | PDF / EPub, Kindle Ready
Top Scores
Anon hero
- 68%
Link to This Test
Related Subjects
Soft Skills
Business Skills
