2024 Financial Accounting I NEWEST 2024 – 2025 PRACTICE EXAM COMPLETE QUESTIONS AND CORRECT DETAILED ANSWERS WITH RATIONALES VERIFIED ANSWERS ALREADY GRADED A+

2024 Financial Accounting I NEWEST 2024 – 2025 PRACTICE EXAM COMPLETE QUESTIONS AND CORRECT DETAILED ANSWERS WITH RATIONALES VERIFIED ANSWERS ALREADY GRADED A+ Accounting is an information measurement system that... - ANS-Identifies, records and communicates information about business activities by interpreting info and designing info systems to allow business to make better decisions The Accounting Equation is... - ANS-Assets=Liabilities + Owner's Equity $100 = $10 + $90 Assets - ANS-Everything a company owns Accounts Receivable - ANS-Assets created by selling goods/services on credit Liabilities - ANS-Debts created by purchasing goods/services on credit Accounts Payable - ANS-liabilities created by purchasing goods/services on credit Unearned Revenue - ANS-Liabilities created when a customer pays before the revenue is earned Owner's Equity - ANS-Owner's claims against assets Business Entity(assumption) - ANS-Every business accounted for separately from other entities, to include its owners Cost Principle - ANS-Accounting info based on actual cost Full Disclosure - ANS-Report all details of financial statements that could impact user's decisions;often in the footnotes Going-concern Principle - ANS-Info that reflects a presumption a business will continue operating Matching Principle - ANS-Requires expenses to be reported in the same period as the revenues earned Monetary unit Principle - ANS-Transactions to be expressed in monetary(money) units Objectivity Principle - ANS-Statement info must be supported by Unbiased evidence Revenue Recognition Principle - ANS-Revenue is recognized when Earned ng products/providing service for cash/credit Time Period(assumption) - ANS-Life of a company divided into time periods with Useful reports for each ie. monthly, quarterly, fiscal/calendar years Income Statement - ANS-Revenues - Expenses = Net Income Net Income=excess revenues over expenses(profit) Net loss=excess expenses over revenues Statement of Owners Equity - ANS-Shows beginning OE(capital), events that increase it(owner investments and Net Income), events that decrease it(withdraws and net loss) Balance Sheet - ANS-Lists types/amounts of Assets, Liabilities and Equity as of a specific date (AKA accounting equation) The accounting process begins with... - ANS-Analysis of transactions and source documents Account - ANS-Record of (+/-) in an asset, liability, equity, revenue or expense Chart of Accounts - ANS-List of all company accounts with corresponding identification #s General Journal records... - ANS-Transaction date,Account names, Amount of each debit/credit, and explanation Ledger - ANS-Collection of all accounts and their balances T-Account - ANS-___________________ (left side) I (right side) Debit I Credit Trial Balance - ANS-Vertically lists accounts and balances Total Dr should = Total Cr Accrual basis of accounting - ANS-Preparing financial statements based on recognizing revenues when they are earned and matching expenses to those revenues Accumulated Depreciation - ANS-Total amount of depreciation recorded throughout the life of an asset Adjusting Entries are done at the end of an accounting period in order to... - ANS--Assure the statement reflects Revenues earned and the Expense incurred in the appropriate period -Update liability and asset accounts to proper balance Adjusted Trial Balance - ANS-Is the trial balance prepared once adjustments have been recorded and contains totals of all general ledger accounts Depreciation - ANS-Allocating costs of plant assets over expected their useful lives