Statements
True or False: You do not need an Income Statement to do the Balance Sheet and Owner's Equity
False, you do need the Income Statement
True / False: The salary payable accounts has a credit balance
True
What does GJ1 stand for?
General Journal and the 1 is the first page
What is an Asset?
Anything that will bring in money.
Is prepaid rent an asset or a liability?
Asset
What are the three Financial statements?
Income statement, statement of owners equity, and Balance sheet
Withdrawals have a normal balance in which column?
Debit
True or False: You close the Cash account at the end of the accounting period.
False, Cash is a permanent account so therefore it will never be closed
What is the formula that is written almost every week on the board?
A= L+OE- OE- EXP
True/ False: A trial balance could be in balance but wrong.
True, you could have some accounts incorrect, but the total still adds up to the correct amount.
What 3 categories are on the balance sheet?
Assets, Liabilities, and Owner's Capital
What goes into the income statement and what is their normal balance?
Revenue (Credit) and Expenses (Debit)
Name the OE accounts.
Owner's Capital and Withdrawals
What is a Income Summary normal balance?
Debit
Income summary is a ________________ account.
A Temporary account
What statement does Consulting Fees Earned go on?
IS-Income Statemen
Taxable fees earned, which account does it increase and decrease?
it increases in credit and decreases in
debit
What temporary account is used to closed accounts?
Income Summary
What is step 7 of the accounting cycle?
Adjusting Entries
Liabilities are always equals to
Assets minus owner's equity
On what statement will you find the capital total for month end?
Balance Sheet
What kind of account is accumulated depreciation and what is its normal balance?
Contra-asset, Credit
When does an asset become an expense?
When these assets expire, are used up, or are no longer useful to the company.
What is an Income Statement used to find?
Profit, Loss and net worth
In closing entries, What accounts are needed to close?
Revenue, expenses, and withdrawals