Accounting equation
What is the basic accounting equation?
This equation states that Assets = Liabilities + Equity.
In accounting, which side is debits?
Left side
This is a financial statement that shows a company's assets, liabilities, and equity at a specific point in time.
A balance sheet
What travels around the world while staying in a corner?
A stamp
The amount of liabilities if assets are $25,000 and owner's equity is $15,000
$10,000
What account increases when a company makes a sale on credit?
Accounts receivable
What is debited when inventory is purchased with cash?
Inventory account.
Assets that are expected to be converted into cash or used up within one year or one operating cycle.
Current assets
What gets bigger the more you take away?
A hole
TRUE or FALSE: Tax laws never change so once you read them, you are an expert.
FALSE
A business owner invests an additional $1,000 into the company. How are the accounts affected?
Increase cash, increase owner’s equity.
What is credited when a service is provided on account?
Service revenue or income account.
This term refers to a company's total sales revenue minus any discounts, returns, and allowances.
Net sales
What has a head and a tail but no body?
A coin
What is the most common accounting designation?
A CPA designation (Chartered Professional Accountants)
When a company pays a creditor, how does it affect the accounting equation?
Decreases assets (cash) and liabilities (creditor payable).
What accounts are affected when an employee’s salary is paid?
Debit salary expense, credit cash or bank account.
The sequence of steps followed in the accounting process to measure business transactions and transform the measurements into financial statements.
The Accounting Cycle
What is always in front of you, but can’t be seen?
The future
This accounting practice involves testing business records and procedures for accuracy and reliability.
Auditing
What is affected in the accounting equation when a company declares but does not yet pay dividends?
Decrease equity (retained earnings) and increase liabilities (dividends payable).
What happens when a business accrues interest expense?
Debit interest expense, credit interest payable.
The systematic allocation of the cost of a tangible asset over its useful life.
Depreciation
I'm tall when I'm young and short when I'm old. What am I?
A candle
This accounting practice involves a combination of accounting and investigative techniques used to discover financial crimes
Forensic Accounting