You're going to do Great!
What do debits represent in double entry bookkeeping?
Incoming Funds
What is the first step of the Accounting Cycle
Identify the Transaction
How many steps are in the Accounting Cycle?
8
What do credits represent in double entry bookkeeping?
Outgoing Funds
What is the name of the accounting method that records transactions based on a business's cash flow?
Cash Accounting
What is the accounting method that records transactions based on when orders are fulfilled?
Accrual Accounting
What type of accounting to Small Businesses use?
Cash Accounting
What type of accounting to Big Businesses use?
Accrual Accounting
What are the 3 sections of the Balance Sheet
Assets
Liabilities
Owner's Equity
What is the Fundamental Accounting Equation?
Assets = Liabilities + Owner's Equity
In the accounting equation/double entry bookkeeping, where are debits and credits recorded?
Debits - Left
Credits - Right
What are the 3 main Financial Statements?
Balance Sheets
Income Statements
Cash Flow Statements
What are the 2 types of assets
Tangible and Intangible
A corporation with Assets of $600,000, Liabilities of $500,000, and Stockholders equity of $100,000. Show the correct accounting equation.
$600,000 = $500,000 + $100,000
Money owed by a company from past transactions such as loans, accounts payable, operating expenses, and wages, is known as what?
Liabilities
On which section of the balance sheet is payroll notated?
Liabilities
A company has assets of $500,000 and equity of $200,000. Using the accounting equation, what is the amount of liabilities the company has?
$300,000
How is Net Income calculated on an Income Statement?
Net Income = (Revenue + Gains) - (Expenses + Losses)
Also accepted:
Net Income = Total Revenue - Total Expenses
What is the Net Income of the below Income Statement?
Paul's Guitar Shop
Revenues
Merchandise Sales $24,800
Music Lesson Income 3,000
Expenses
Cash of Goods Sold $10,200
Depreciation Expense 2,000
Wage Expense 750
Rent Expense 500
Interest Expense 500
Supplies Expense 500
Utilities Expense 400
$12,950
A corporation with Assets of $600,000, Liabilities of $500,000, and Stockholders equity of $100,000.
What is the correct equation if the company were to purchase $200,000 worth of equipment and obtain a loan to pay for it?
$800,000 = $700,000 + $100,000