Accounting 101
_________ accounting firms provide three major types of services: auditing, tax accounting, and management advisory services.
Public
The owner's investment or equity in a business is called
Capital
Which accounts appear first on the general ledger?
Balance Sheet accounts
The payment of a liability is recorded as
a debit to Accounts Payable and credit to Cash
The balance sheet shows
the financial position of a business at a given time
The area of accounting that involves the preparation of internal reports for a firm's executives and the analysis of the data in these reports to aid in decision making is known as
Managerial Accounting
Amounts that a business must pay in the future are known as
Accounts payable
Which type of accounting tool is used to record, sort, store and summarize a company's transactions?
General Ledger
When revenue is earned from charge-account sales are recorded as
debits Accounts Receivable and credits a revenue account
Which financial statement is a representation of the accounting equation?
Balance Sheet
The area of accounting that involves a process of recording, summarizing, and reporting the myriad of transactions resulting from business operations over a period of time for external audiences and regulatory agencies is known as
Financial Accounting
The process of transferring the data from the journal into the ledger is called:
Transponding
The purpose of which type of journal is to record cash disbursements of cash
Cash Payments Ledger
A business purchases supplies on account. The journal entry to record this transaction is:
Debit Supplies; Credit Accounts Payable
The Statement of Owner's Equity is calculated as follows:
beginning capital + net income - withdrawals = ending capital
A firm issues periodic reports called
Financial Statements
Increases in revenue are recorded when
services are performed for cash or credit clients
The purpose of which type of journal is to record cash received from all sources
Cash Receipts Ledger
Which of the following parts of the fraud triangle would involve financial and work pressures
Perceived pressure
The equation to calculate net income on the income statement is
Revenues-Expenses=Net Income
The fundamental accounting equation is
Assets=Liabilities+Owner's Equity
Revenues are recognized when
goods or services are rendered
The purpose of which type of journal is to record adjusting and closing entries
General Ledger
Which of the following parts of the fraud triangle would involve thinking "I'll pay it back" or "I deserve a raise"
Rationalization
Which of the following parts of the fraud triangle would involve weak internal controls, ineffective monitoring and susceptible assets
Perceived opportunity