MBA 510 TEST PAPER ANSWERS AND QUESTIONS
SET A+
✔✔What are the types of liability accounts? - ✔✔1. A/P
2. N/P
3. Unearned revenue
4. Accrued liabilities
✔✔What are the types of equity accounts? - ✔✔1. C/S
2. Dividends
3. Revenues
4. Expenses
✔✔This is a listing of all account names, as well as a numbering system - ✔✔Chart of
accounts
✔✔This contains all of the accounts that of company uses, along with detail in those
accounts - ✔✔General ledger
✔✔Steps of accounting process (in detail): - ✔✔1. Identify transactions and source
documents
2. Analyze transactions using accounting equation
3. Record journal entry
4. Post into ledger
✔✔This gives a complete and chronological way of entry posted - ✔✔Journal
✔✔What type of accounts are not found in the books and used for the ledger? - ✔✔T-
accounts
✔✔This is a list of ledger accounts and their balances at a point in time; an internal tool
used during processing to prove transactions are equal - ✔✔Trial balance
✔✔Is the trial balance a financial statement? - ✔✔No
, ✔✔This helps us prepare financial statements and ensures balance statements will
balance - ✔✔Trial balance
✔✔EX: Journal entry for sale on account was posted for $3000 rather than $300 -
✔✔Debit and credit are overstated
✔✔EX: Cash balance was entered in the credit column - ✔✔Debit understated and
credit overstated
✔✔The total column wasn't added correctly. The debits should have totaled $50,000 not
$55,000 - ✔✔Debit overrated and no effect to credit
✔✔The revenue account balance entered in the debit column rather than the credit
column - ✔✔Debit overstated and credit understated
✔✔A/P balance entered in wrong column, account had a normal balance - ✔✔Debit
overstated and credit understated
✔✔What time period does an income statement cover? - ✔✔Any time period and may
be prepared for various time amounts
✔✔Most organizations use what as their primary time period? - ✔✔A year
✔✔Reports covering a 1 year period are known as what? - ✔✔Annual financial
statements
✔✔Reports covering 1, 3 or 6 months of activity - ✔✔Interim financial statements
✔✔Are the annual reporting periods the same for every company? - ✔✔No, they vary
✔✔Smaller types of companies use what annual reporting period? - ✔✔Calendar year
✔✔This annual reporting period doesn't have to end on Dec 31, it can end around Dec
31 - ✔✔Calendar year
✔✔Bigger types of companies use what annual reporting period? - ✔✔Fiscal year
✔✔This type of accounting applies adjustments so revenues when services/products
are delivered and expenses when incurred match with the revenues; net income is
different between revenues earned and expenses incurred - ✔✔Accrual basis
accounting
SET A+
✔✔What are the types of liability accounts? - ✔✔1. A/P
2. N/P
3. Unearned revenue
4. Accrued liabilities
✔✔What are the types of equity accounts? - ✔✔1. C/S
2. Dividends
3. Revenues
4. Expenses
✔✔This is a listing of all account names, as well as a numbering system - ✔✔Chart of
accounts
✔✔This contains all of the accounts that of company uses, along with detail in those
accounts - ✔✔General ledger
✔✔Steps of accounting process (in detail): - ✔✔1. Identify transactions and source
documents
2. Analyze transactions using accounting equation
3. Record journal entry
4. Post into ledger
✔✔This gives a complete and chronological way of entry posted - ✔✔Journal
✔✔What type of accounts are not found in the books and used for the ledger? - ✔✔T-
accounts
✔✔This is a list of ledger accounts and their balances at a point in time; an internal tool
used during processing to prove transactions are equal - ✔✔Trial balance
✔✔Is the trial balance a financial statement? - ✔✔No
, ✔✔This helps us prepare financial statements and ensures balance statements will
balance - ✔✔Trial balance
✔✔EX: Journal entry for sale on account was posted for $3000 rather than $300 -
✔✔Debit and credit are overstated
✔✔EX: Cash balance was entered in the credit column - ✔✔Debit understated and
credit overstated
✔✔The total column wasn't added correctly. The debits should have totaled $50,000 not
$55,000 - ✔✔Debit overrated and no effect to credit
✔✔The revenue account balance entered in the debit column rather than the credit
column - ✔✔Debit overstated and credit understated
✔✔A/P balance entered in wrong column, account had a normal balance - ✔✔Debit
overstated and credit understated
✔✔What time period does an income statement cover? - ✔✔Any time period and may
be prepared for various time amounts
✔✔Most organizations use what as their primary time period? - ✔✔A year
✔✔Reports covering a 1 year period are known as what? - ✔✔Annual financial
statements
✔✔Reports covering 1, 3 or 6 months of activity - ✔✔Interim financial statements
✔✔Are the annual reporting periods the same for every company? - ✔✔No, they vary
✔✔Smaller types of companies use what annual reporting period? - ✔✔Calendar year
✔✔This annual reporting period doesn't have to end on Dec 31, it can end around Dec
31 - ✔✔Calendar year
✔✔Bigger types of companies use what annual reporting period? - ✔✔Fiscal year
✔✔This type of accounting applies adjustments so revenues when services/products
are delivered and expenses when incurred match with the revenues; net income is
different between revenues earned and expenses incurred - ✔✔Accrual basis
accounting
