ACCOUNTING WHAT THE NUMBERS MEAN
COMPREHENSIVE EXAMINATION TEST
VERIFIED QUESTIONS AND ACCURATE
ANSWERS
●● accounting equation
Answer: Assets = Liabilities + Owners' Equity (A = L + OE). The
fundamental relationship represented by the Balance Sheet and the
foundation of the bookkeeping process.
●● accounts payable
Answer: A liability representing an amount payable to another entity,
usually arising because of the purchase of goods or services on credit.
●● accounts receivable
Answer: A liability representing an amount payable to another entity,
usually arising from selling goods or services on credit.
●● accrual accounting
Answer: Accounting that recognizes revenues and expenses as they
occur, even though the cash receipt from the revenue or the cash
disbursement related to the expense may occur before or after the the
event that causes the revenue or expense recognition.
, ●● accrued liabilities
Answer: Amounts that are owed by an entity on the balance sheet date.
●● accumulated depreciation
Answer: The sum of the depreciation expense that has been recognized
over time. Accumulated depreciation is a contra-asst---an amount that is
subtracted from the cost of the related asset on the balance sheet.
●● additional paid-in capital
Answer: The excess of the amount received from the sale of stock over
the par value of the shares sold.
●● assets
Answer: Probable future economic benefits obtained or controlled by an
entity as a result of past transactions or events.
●● balance sheet
Answer: The financial statement that is a listing of the entity's assets,
liabilities and owners' equity at a point in time.
●● balance sheet equation
Answer: Another term for the "accounting equation".
COMPREHENSIVE EXAMINATION TEST
VERIFIED QUESTIONS AND ACCURATE
ANSWERS
●● accounting equation
Answer: Assets = Liabilities + Owners' Equity (A = L + OE). The
fundamental relationship represented by the Balance Sheet and the
foundation of the bookkeeping process.
●● accounts payable
Answer: A liability representing an amount payable to another entity,
usually arising because of the purchase of goods or services on credit.
●● accounts receivable
Answer: A liability representing an amount payable to another entity,
usually arising from selling goods or services on credit.
●● accrual accounting
Answer: Accounting that recognizes revenues and expenses as they
occur, even though the cash receipt from the revenue or the cash
disbursement related to the expense may occur before or after the the
event that causes the revenue or expense recognition.
, ●● accrued liabilities
Answer: Amounts that are owed by an entity on the balance sheet date.
●● accumulated depreciation
Answer: The sum of the depreciation expense that has been recognized
over time. Accumulated depreciation is a contra-asst---an amount that is
subtracted from the cost of the related asset on the balance sheet.
●● additional paid-in capital
Answer: The excess of the amount received from the sale of stock over
the par value of the shares sold.
●● assets
Answer: Probable future economic benefits obtained or controlled by an
entity as a result of past transactions or events.
●● balance sheet
Answer: The financial statement that is a listing of the entity's assets,
liabilities and owners' equity at a point in time.
●● balance sheet equation
Answer: Another term for the "accounting equation".
