Chapter 1 - Acnt 1303

Principles

100

Which principle requires business records/transactions are separate from personal?

Economic entity

200

Which principle states expenses are reported in the period in which related revenues are reported?

Matching

300

Which principle requires transactions are recorded at the cash amount (or equivalent) at time of purchase.

Cost Principle

400

Which principle requires amounts to be in US dollars?

Monetary 

500

Which principle assumes a business will continue to operate?

Going Concern

600

Which principle requires only recording those transactions in the accounting system that you can verify with objective evidence.

Reliability

Chart of Accounts

100

What is the purpose of a Chart of Accounts?

It’s an index of all the financial accounts in your company’s general ledger.

200

What are the main categories in the COA?

Assets, Liabilities, Equity, Revenue, Expenses

300

What does the first number in an account number(listing) tell us?

The main category the account falls into.

400

Are you required to have account numbers?

No, but most entities do.

500

Does every business have the same chart of accounts?

No, each COA is customized to the business.

600

Why is a COA useful?

It tells us the options we have to choose from when we record transactions.

Accounts I

100

Name the account:

Investment in business by owner

Capital

200

Name the account:

Amounts owed to employees

Salaries Payable

300

Name the account:

Equipment used for operations

Equipment

400

Name the account:

Sales of services to customers

Service Revenue

500

Name the account:

Cost of utilities

Utilities Expense

600

Name the account:

Purchase of office supplies

Supplies

Accounts II

100

Name the account:

Property used for operations

Land

200

Name the account:

Purchase_____ on account

Accounts Payable

300

Name the account:

Purchase a building

Building

400

Name the account:

Owner takes cash out of the business

Draw or Drawing

500

Name the account:

Receive a loan from the bank by signing a note.

Notes Payable

600

Name the account:

Invest in securities of another company

Investments

Accounts III

100

Name the account:

Performed services on account

Accounts Receivable

200

Name the account:

Receive cash from customers.

Cash

300

Name the account:

Used supplies

Supplies Expense

400

Name the account:

Pay for cost of advertising

Advertising Expense

500

Name the account:

Paid for 1 year of Insurance

Prepaid Insurance

600

Name the account:

Customer paid for services upfront (before we did the work)

Unearned Revenue or Deferred Revenue