accounting test 1 mcgraw hill Exam Questions and Answers Verified Solutions Latest Update

accounting test 1 mcgraw hill Exam Questions and Answers Verified
Solutions Latest Update

Question: Accounting
Answer:
An information system designed by an organization to capture analyze record and summarize the
activities affecting its financial condition and performance.

Question: Sole proprietorship
Answer:
Owned by 1 - easiest

Question: Partnership
Answer:
Owner by 2 profits are split, have to pay for lawyer

Question: Coporation
Answer:
Separate entity from both legal and accounting perspectives. Buy and sell stock

Question: Assets
Answer:
= Liabilities + equity

Question: What a company owns?
Answer:
Must equal what a company owes to its creditors and stock holders

Question: Expenses
Answer:
Are cost of business to help make revenue

Question: Revenues
Answer:
Earned by selling goods or services to customers

Question: Liabilities
Answer:
Something we owe - payable

, Question: Assets
Answer:
Presently controlled by the company, measurable value

Question: Accounting transaction
Answer:
Direct and measurable effect on assets liabilities or stock holders equity

Question: 1St step
Answer:
Post transactions

Question: 2Nd step
Answer:
Trial balance

Question: 3Rd step
Answer:
Income statement

Question: 4Th step
Answer:
Statement of retained earnings

Question: 5Th step
Answer:
Balance sheet

Question: Minimum number of accounts needed to record transaction
Answer:
At least 2

Question: If i borrow money from the bank what effect does that have on balance sheet?
Answer:
Cash goes up
Note payable goes up

Question: If you sell stock?
Answer:
Stock holders equity goes up