Test 1- Exam Review

Let's Talk About SETS, Baby

100

This asset is received when services are earned or in exchange for common stock 

Cash

200

This asset has a future expiration date

Prepaid Expenses

300

You purchase this as an investment activity and can be used for new construction

Land

400

These are promises from customers to pay me in the future

Accounts Receivable 

500

100 markers

50 packs of paper

25 highlighters

Supplies

Trick Questions

100

This account form resembles the letter T

T Account

200

Using the rules of debit and credit, transactions are initially entered in a record called this 

Journal

300

When the accounts receivable account is credited, this happens

The account is decreased

400

This system requires every business transaction to be recorded in at least two accounts and the total debits must equal total credits

Double-entry accounting system

500

On a balance sheet, a debit will decrease me and a credit will increase me  

Liability or Stockholders' Equity account

1+1

100

Assets = Liabilities + Stockholders Equity

The Accounting Equation

200

Assets= 87,000

SE = 27,190

Liabilities = ? 

$59,810

300

Liabilities = 174,010

SE = 543,770

Assets = ?

$717,780

400

Fees Earned = 481,000

Wages expense = 334,000

Rent expense = 37,000

Supplies expense = 3,800

Net Income (Loss) = 

$106,200

500

A/P = 108,000          A/R = 539,000

Common Stock = 575,000       Land = 1,500,000

Supplies = 6,000      Prepaid Expenses = 200,000

What is total amount for assets? 

2,245,000

All in 1

100

This reports inflows and outflows of cash during the accounting period 

Statement of Cash Flows

200

"I NEED MONEY" 

"Me too!"

Then we started getting it together.

I am looking at your financials to see if you will be able to pay dividends

Stockholders/Shareholders

300

This reports the accountant's primary measure of performance of a business, revenues less expenses during the accounting period

Income Statement

400

I review your financial statements to gain info about these same business activities to assess whether the company will be able to pay back it debts

Creditors

500

This is cash and promises received from delivery of goods and services

Revenue

C.O.A.

100

Accounting systems are designed to show the increases and decreases in each accounting equation element as a separate record called this

Account

200

A group of accounts for a business entity is called this

Ledger

300

This set of accounts are normally those that start with the number 1

Assets

400

This set of accounts are normally those that start with the number 5

Expenses

500

Accounts beginning with these numbers normally have a credit balance

2, 3, and 4