Exam

Question 1

These are long term assets or resources owned by the business that are not expected to be converted within one year

Answer 1

Non current assets

Question 2

Includes depths and obligations to pay and claims of creditors of the business

Answer 2

Liabilities

Question 3

This includes the interest of the owner of the business

Answer 3

Owner’s equity

Question 4

This is the accounting bearing the name of the owner, representing the original and additional investment of the owner of the business, increase by the amount of net income earned during the year

Answer 4

Capital account

Question 5

This type of income statement presents expenses of according to their nature and use in service businesses

Answer 5

Income statement

Question 6

This type of income statement presents expenses according to function and is used in merchandising businesses

Answer 6

Cost of sales method

Question 7

Includes revenues generated by the business and performing services for a customer or client

Answer 7

Service revenue

Question 8

This report is used to generate financial statements like the income statement, balance sheet, cash flow statement

Answer 8

Trial balance

Question 9

T or F
Assets are economic resources owned by the business expected for future gain not just property and rights owned by the business

Answer 9

False

Question 10

T or F
Accounts receivable is the amount collectible from customers to whom sales have been made or service rendered on account or credit

Answer 10

True

Question 11

T or F
Inventory is include supplies both for using the business and benefits to be received by the business in the future paid in advance can be considered as prepaid expenses which are assets

Answer 11

True

Question 12

Great

Answer 12

Identifying transaction

Question 13

This step helps ensure that the total debits equal the total credits after posting to the ledger

Answer 13

Trial balance

Question 14

These are transactions that do not relate to the profit of the business such as personal transaction or social responsibilities

Answer 14

Non-business transaction

Question 15

This is the document that defines the roles and conditions of business partners

Answer 15

Partnership agreement

Question 16

This document outlines the terms between property owners and tenants

Answer 16

Lease agreement

Question 17

This document establishes the rules and governance of corporations including organization structure and shareholder rights

Answer 17

Articles of incorporation