ASU Accounting 231 EXAM #1 PREP
Question and answers rated A+
2025/2026
Which Entity is charged with developing the accounting standards in the U.S? - correct answer
✔Financial Accounting Standards Board (FASB)
Whose mission is it to protect investors and maintain a fair and efficient stock market? - correct answer
✔Securities and Exchange Commission (SEC)
What is the Accounting Equation - correct answer ✔Assets = Liabilities + Stockholders' Equity
What is an asset? - correct answer ✔A resource the company has the right to use in the future.
What is a liability? - correct answer ✔A future obligation
What does Revenue Represent? - correct answer ✔The amount received for providing a good or
service to customers.
What does stockholders' equity represent? - correct answer ✔The value of the shareholders (owners)
interest in the company.
What is an expense? - correct answer ✔A resource used up or a cost incurred to provide goods and
services.
Revenues and Expenses are found on which financial statement? - correct answer ✔The income
statement
, Which financial statement details the financial health of a company and is where Assets, Liabilities, and
stockholders equity are found. - correct answer ✔The Balance Sheet
Receiving cash from a customer who is paying off their account receivable: - correct answer ✔Increases
one asset and decreases another asset.
A Real Estate company received $12,000 cash for 24 months rent in advance. How should the Real
Estate company record this transaction? - correct answer ✔Debit Cash; credit Deferred Revenue.
3) Which of the following is possible for a particular business transaction? - correct answer ✔Decrease
assets; Increase assets
Which of the following accounts are increased with a debit? - correct answer ✔Cash, an Expense,
Dividends.
A Service Company provides services to customers totaling $3,000, for which it billed the customers.
How would the transaction be recorded? - correct answer ✔Debit Accounts Receivable $3,000, credit
Service Revenue $3,000.
When a company pays $2,500 dividends to its stockholders, the transaction should be recorded as: -
correct answer ✔Debit Dividends; credit Cash.
When a company issues common stock for cash, what is the effect on the accounting equation for the
company? - correct answer ✔Assets increase and stockholders' equity increases.
Dividends paid and net losses: - correct answer ✔reduce Retained Earnings.
What type of account is Deferred (Unearned) Revenue? - correct answer ✔Liability
Question and answers rated A+
2025/2026
Which Entity is charged with developing the accounting standards in the U.S? - correct answer
✔Financial Accounting Standards Board (FASB)
Whose mission is it to protect investors and maintain a fair and efficient stock market? - correct answer
✔Securities and Exchange Commission (SEC)
What is the Accounting Equation - correct answer ✔Assets = Liabilities + Stockholders' Equity
What is an asset? - correct answer ✔A resource the company has the right to use in the future.
What is a liability? - correct answer ✔A future obligation
What does Revenue Represent? - correct answer ✔The amount received for providing a good or
service to customers.
What does stockholders' equity represent? - correct answer ✔The value of the shareholders (owners)
interest in the company.
What is an expense? - correct answer ✔A resource used up or a cost incurred to provide goods and
services.
Revenues and Expenses are found on which financial statement? - correct answer ✔The income
statement
, Which financial statement details the financial health of a company and is where Assets, Liabilities, and
stockholders equity are found. - correct answer ✔The Balance Sheet
Receiving cash from a customer who is paying off their account receivable: - correct answer ✔Increases
one asset and decreases another asset.
A Real Estate company received $12,000 cash for 24 months rent in advance. How should the Real
Estate company record this transaction? - correct answer ✔Debit Cash; credit Deferred Revenue.
3) Which of the following is possible for a particular business transaction? - correct answer ✔Decrease
assets; Increase assets
Which of the following accounts are increased with a debit? - correct answer ✔Cash, an Expense,
Dividends.
A Service Company provides services to customers totaling $3,000, for which it billed the customers.
How would the transaction be recorded? - correct answer ✔Debit Accounts Receivable $3,000, credit
Service Revenue $3,000.
When a company pays $2,500 dividends to its stockholders, the transaction should be recorded as: -
correct answer ✔Debit Dividends; credit Cash.
When a company issues common stock for cash, what is the effect on the accounting equation for the
company? - correct answer ✔Assets increase and stockholders' equity increases.
Dividends paid and net losses: - correct answer ✔reduce Retained Earnings.
What type of account is Deferred (Unearned) Revenue? - correct answer ✔Liability
