AAMI ACCOUNTING ONE FINAL REVIEW
Which of the following can be an entry to close out Income Summary? -
ANSWERS-Debit income summary
There is a profit when the Income Summary has a credit balance after Revenue
and Expenses have been closed out. - ANSWERS-true
There is a loss when the Income Summary has a debit balance after Revenue and
Expenses have been closed out - ANSWERS-True
the Income Statement is an informal financial statement. - ANSWERS-False
The Trial Balance is a formal financial statement. - ANSWERS-False
The capital account gets closed out to - ANSWERS-Account does not closed out
180/360= - ANSWERS-1/2
90/360= - ANSWERS-1/4
, simple interest - ANSWERS-principal X interest rate X number of days of
borrowing / 360
drawing account is a - ANSWERS-temporary account / also referred to as owner's
withdrawals
prepaid expenses are - ANSWERS-assets ( items like rent, insurance or utilities)
Accounting is - ANSWERS-Language of business/ to communicate financial
information
How do you increase an asset account? - ANSWERS-Debit
How do you decrease an asset account? - ANSWERS-Credit
How do you increase a liability account? - ANSWERS-Credit
How do you decrease a liability account? - ANSWERS-debit
How do you increase revenue? - ANSWERS-Credit
How do you increase expenses? - ANSWERS-debit
Which of the following can be an entry to close out Income Summary? -
ANSWERS-Debit income summary
There is a profit when the Income Summary has a credit balance after Revenue
and Expenses have been closed out. - ANSWERS-true
There is a loss when the Income Summary has a debit balance after Revenue and
Expenses have been closed out - ANSWERS-True
the Income Statement is an informal financial statement. - ANSWERS-False
The Trial Balance is a formal financial statement. - ANSWERS-False
The capital account gets closed out to - ANSWERS-Account does not closed out
180/360= - ANSWERS-1/2
90/360= - ANSWERS-1/4
, simple interest - ANSWERS-principal X interest rate X number of days of
borrowing / 360
drawing account is a - ANSWERS-temporary account / also referred to as owner's
withdrawals
prepaid expenses are - ANSWERS-assets ( items like rent, insurance or utilities)
Accounting is - ANSWERS-Language of business/ to communicate financial
information
How do you increase an asset account? - ANSWERS-Debit
How do you decrease an asset account? - ANSWERS-Credit
How do you increase a liability account? - ANSWERS-Credit
How do you decrease a liability account? - ANSWERS-debit
How do you increase revenue? - ANSWERS-Credit
How do you increase expenses? - ANSWERS-debit
