Accy 201 final ole miss Questions and Verified
Answers
Accounting Equation Correct Answer: Assets=Liabilities+Equity
Assets Correct Answer: resources company owns or has control over
asset accounts Correct Answer: cash, accounts receivable, notes receivable, inventory, prepaid accounts,
supplies, land
accounting Correct Answer: information and measurement system that identifies and records and
communicates relevant reliable and comparable information about organizations business activities.
Language of business.
Liabilities Correct Answer: a creditors claim on assets, can be promise assets or a payable meaning
promise of future outflows
liability accounts Correct Answer: accounts payable, short term notes payable, unearned revenue,
accrued liabilities, long term notes payable.
Equity Correct Answer: owners claims on assets, equal to assets minus liabilities
equity accounts Correct Answer: common stock, dividends, revenue, expenses.
(+common stock-dividends+revenues-expenses)
common stock Correct Answer: contributed capital
retained earnings Correct Answer: portion of net income that is retained by corporation instead of being
distributed back to shareholders.
retained earnings equals beginning retained earnings+net income-dividends paid out
measurement principle Correct Answer: cost principle, says accounting information is based on actual
cost. Cost is measured in cash or cash equivalent.
expense recognition principle Correct Answer: matching principle, company must record expenses
incurred to generate revenue.
, full disclosure principle Correct Answer: company must report details behind financial statements that
would effect users decisions.
revenue recognition principle Correct Answer: provides when to recognize revenue. Revenue is
recognized when earned. Proceeds from selling products/services need not be in cash. Revenue is
measured by cash plus cash value of any other items received.
going concern assumption Correct Answer: accounting info says company will continue to operate and
not close.
monetary unit assumption Correct Answer: we can express transactions and events in monetary or
money units.
time period assumption Correct Answer: Life of company can be divided into time periods.
business entity assumption Correct Answer: business is accounted for separately from other business
entities
materiality constraint Correct Answer: only information that would influence reasonable persons
decisions need be disclosed.
cost-benefit constraint Correct Answer: only information with benefits of disclosure greater than cost of
providing it need be disclosed.
account Correct Answer: record of increases/decreases in specific account
ledger Correct Answer: record of all accounts used by company
asset accounts Correct Answer: resources owned or controlled by company with expectation of future
benefit.
liability accounts Correct Answer: claims by creditors against assets, means obligations to transfer assets
or provide products or services to others.
Equity accounts Correct Answer: owners claim on companies assets
chart of accounts Correct Answer: list of all ledger accounts and identification number assigned to them
account balance Correct Answer: difference between total debits and credits including any beginning
balance
Answers
Accounting Equation Correct Answer: Assets=Liabilities+Equity
Assets Correct Answer: resources company owns or has control over
asset accounts Correct Answer: cash, accounts receivable, notes receivable, inventory, prepaid accounts,
supplies, land
accounting Correct Answer: information and measurement system that identifies and records and
communicates relevant reliable and comparable information about organizations business activities.
Language of business.
Liabilities Correct Answer: a creditors claim on assets, can be promise assets or a payable meaning
promise of future outflows
liability accounts Correct Answer: accounts payable, short term notes payable, unearned revenue,
accrued liabilities, long term notes payable.
Equity Correct Answer: owners claims on assets, equal to assets minus liabilities
equity accounts Correct Answer: common stock, dividends, revenue, expenses.
(+common stock-dividends+revenues-expenses)
common stock Correct Answer: contributed capital
retained earnings Correct Answer: portion of net income that is retained by corporation instead of being
distributed back to shareholders.
retained earnings equals beginning retained earnings+net income-dividends paid out
measurement principle Correct Answer: cost principle, says accounting information is based on actual
cost. Cost is measured in cash or cash equivalent.
expense recognition principle Correct Answer: matching principle, company must record expenses
incurred to generate revenue.
, full disclosure principle Correct Answer: company must report details behind financial statements that
would effect users decisions.
revenue recognition principle Correct Answer: provides when to recognize revenue. Revenue is
recognized when earned. Proceeds from selling products/services need not be in cash. Revenue is
measured by cash plus cash value of any other items received.
going concern assumption Correct Answer: accounting info says company will continue to operate and
not close.
monetary unit assumption Correct Answer: we can express transactions and events in monetary or
money units.
time period assumption Correct Answer: Life of company can be divided into time periods.
business entity assumption Correct Answer: business is accounted for separately from other business
entities
materiality constraint Correct Answer: only information that would influence reasonable persons
decisions need be disclosed.
cost-benefit constraint Correct Answer: only information with benefits of disclosure greater than cost of
providing it need be disclosed.
account Correct Answer: record of increases/decreases in specific account
ledger Correct Answer: record of all accounts used by company
asset accounts Correct Answer: resources owned or controlled by company with expectation of future
benefit.
liability accounts Correct Answer: claims by creditors against assets, means obligations to transfer assets
or provide products or services to others.
Equity accounts Correct Answer: owners claim on companies assets
chart of accounts Correct Answer: list of all ledger accounts and identification number assigned to them
account balance Correct Answer: difference between total debits and credits including any beginning
balance
