Income Statement
This is the amount of money a business earns from its normal operations before any expenses are deducted.
What is revenue
What is the main function of the T-account?
To visually organize and track increases and decreases in accounts
How many types of accounts are in the equity section?
4
This list shows all account names and numbers used by a business.
What is the Chart of Accounts
This section of the balance sheet shows what a company owns
What are assets
When preparing an income statement, expenses are typically listed in this order.
What is from largest to smallest (or most significant to least significant)
This side of a T-account shows increases for asset accounts.
What is the debit side
What are the accounts in the equity section of the expanded ledger?
Capital, Revenue, Expenses, Drawings
Each account in the chart has a unique number to make this process easier.
What is identifying and organizing transactions
This account appears in the equity section and shows the owner’s investment in the business.
What is Capital
If expenses are greater than revenue, this is the result on the income statement.
What is a Net Loss
This side of the T-account shows increases for liabilities and capital.
What is the credit side
What is another common name for revenue?
Fees Earned
Account numbers for assets usually begin with this digit.
What is 1
This is the equation that the balance sheet must always balance to.
What is Assets = Liabilities + Owner’s Equity
This equation is used to calculate net income.
What is Revenue – Expenses = Net Income
This type of account always has a credit balance in the trial balance.
What is a revenue or liability account
Expenses have this effect on equity.
Decreases
Revenue accounts in the Chart of Accounts typically start with this digit.
What is 4
On a classified balance sheet, long-term assets and current assets are separated. Give one example of a long-term asset.
What is equipment, building, land, or vehicles
If a business earns $10,000 in revenue and has $2,000 in advertising, $3,000 in salaries, and $1,000 in rent, what is its net income?
What is $4,000
If Drawings are recorded, which side of the Drawings T-account is increased?
What is the debit side
These two equity accounts are temporary and reset each accounting period.
What are Revenue and Expenses
What is the order in which accounts typically appear in the chart of accounts, starting with the lowest account numbers.
What are Assets, Liabilities, Owner’s Equity, Revenue, and Expenses
A company increases its liabilities by $10,000 and purchases a new asset. If equity does not change, what happens to the balance sheet equation
it remains in balance, because both sides increase by $10,000