ACC 221 LATEST EXAMS TEST PAPER QUESTIONS
AND ANSWERS SURE A+
✔✔Transaction: Pay back $ from account payable - ✔✔D- accounts payable
C- cash
✔✔Transaction: collect $ owed on account - ✔✔D- cash
C- accounts receivable
✔✔Transaction: pay wages - ✔✔D- wages expense
C- cash
✔✔Errors on INCOME STATEMENT without depreciation entry - ✔✔-net income
overstated
-depreciation expense, total expenses understated
✔✔Errors on BALANCE SHEET without depreciation entry - ✔✔-accumulated
depreciation understated
-retained earnings, total assets, total equity and total liab&equity overstated
✔✔Errors on INCOME STATEMENT without unearned revenue adj. entry - ✔✔-service
revenue and net income understated
-total expenses not affected
, ✔✔Errors on BALANCE SHEET without unearned revenue adj. enty - ✔✔-unearned
revenue, total liabilities overstated
-retained earnings and total equity understated
-all asset accounts/Total Liab&equity not affected
✔✔Errors on INCOME STATEMENT without Accrued assets adj. entry - ✔✔(Accrued
Assets= earn revenue...pay later)
-service revenue and net income understated
-total expenses not affected
✔✔Errors on BALANCE SHEET without accrued assets adj. entry - ✔✔(Accrued
Assets= earn revenue...pay later)
-accounts receivable, total assets, retained earnings, total equity, total liab&equity
understated
✔✔ Accounting Equation - ✔✔Assets=Liabilities+Owner's Equity
✔✔Asset - ✔✔-physical things owned by a company
-increase with debit, decrease with credit
✔✔Which side of the accounting sheet shows debits and which side shows credits? -
✔✔-Left=debit
-Right=credit
✔✔Liabilities - ✔✔-non-owner's claim to the assets
-increase with credit, decrease with credit
✔✔Owner's Equity - ✔✔-owner's claim to the assets
-increase with credit, decrease with debit
✔✔Retained Earnings - ✔✔-owner's equity account...increase/decrease owner's claim
to assets as a result of operating the business
-where revenue/expense accts get dumped into at the end of the acc pd
=cumulative profits of the business
✔✔Common stock - ✔✔-owner's equity account=owner's claim to assets as a result of
putting $ into business
✔✔Accounts Receivable - ✔✔-asset account-when extending credit to customer and
they promise to pay later
✔✔Revenue and Expense Account Overview - ✔✔-rain gauge example...dumped into
retained earnings with closing entries @ end of cycle...owner's equity accounts
AND ANSWERS SURE A+
✔✔Transaction: Pay back $ from account payable - ✔✔D- accounts payable
C- cash
✔✔Transaction: collect $ owed on account - ✔✔D- cash
C- accounts receivable
✔✔Transaction: pay wages - ✔✔D- wages expense
C- cash
✔✔Errors on INCOME STATEMENT without depreciation entry - ✔✔-net income
overstated
-depreciation expense, total expenses understated
✔✔Errors on BALANCE SHEET without depreciation entry - ✔✔-accumulated
depreciation understated
-retained earnings, total assets, total equity and total liab&equity overstated
✔✔Errors on INCOME STATEMENT without unearned revenue adj. entry - ✔✔-service
revenue and net income understated
-total expenses not affected
, ✔✔Errors on BALANCE SHEET without unearned revenue adj. enty - ✔✔-unearned
revenue, total liabilities overstated
-retained earnings and total equity understated
-all asset accounts/Total Liab&equity not affected
✔✔Errors on INCOME STATEMENT without Accrued assets adj. entry - ✔✔(Accrued
Assets= earn revenue...pay later)
-service revenue and net income understated
-total expenses not affected
✔✔Errors on BALANCE SHEET without accrued assets adj. entry - ✔✔(Accrued
Assets= earn revenue...pay later)
-accounts receivable, total assets, retained earnings, total equity, total liab&equity
understated
✔✔ Accounting Equation - ✔✔Assets=Liabilities+Owner's Equity
✔✔Asset - ✔✔-physical things owned by a company
-increase with debit, decrease with credit
✔✔Which side of the accounting sheet shows debits and which side shows credits? -
✔✔-Left=debit
-Right=credit
✔✔Liabilities - ✔✔-non-owner's claim to the assets
-increase with credit, decrease with credit
✔✔Owner's Equity - ✔✔-owner's claim to the assets
-increase with credit, decrease with debit
✔✔Retained Earnings - ✔✔-owner's equity account...increase/decrease owner's claim
to assets as a result of operating the business
-where revenue/expense accts get dumped into at the end of the acc pd
=cumulative profits of the business
✔✔Common stock - ✔✔-owner's equity account=owner's claim to assets as a result of
putting $ into business
✔✔Accounts Receivable - ✔✔-asset account-when extending credit to customer and
they promise to pay later
✔✔Revenue and Expense Account Overview - ✔✔-rain gauge example...dumped into
retained earnings with closing entries @ end of cycle...owner's equity accounts
