©SIRJOEL EXAM SOLUTIONS
12/3/2024 11:27AM
Financial Accounting Exam 1 Questions
With Correct Answers
Balance Sheet - answer✔A financial statement that reports assets, liabilities, and owner's equity
at a specific point in time.
Income Statement - answer✔A financial statement showing the revenue and expenses for a fiscal
period. Revenues - expenses = net income
Income Summary Account - answer✔used to accumulate and summarize the revenue and
expenses for the period
Trial Balance - answer✔a list of accounts and their balances at a given time
Statement of Cash Flows - answer✔A financial statement that provides financial information
about the cash receipts and cash payments of a business for a specific period of time.
permanent accounts - answer✔all accounts that appear in the balance sheet; account balances are
carried forward from period to period
temporary accounts - answer✔Revenue, expense, and dividend accounts whose balances a
company transfers to Retained Earnings at the end of an accounting period.
, ©SIRJOEL EXAM SOLUTIONS
12/3/2024 11:27AM
Business entity assumption - answer✔A business is accounted for separately from other business
entities, including its owner.
time period assumption - answer✔Assumption that an organization's activities can be divided
into specific time periods such as months, quarters, or years.
Revenue recognition principle - answer✔The principle that companies recognize revenue in the
accounting period in which the performance obligation is satisfied.
Going Concern Assumption - answer✔The assumption that the company will continue in
operation for the foreseeable future.
Asset Accounts - answer✔You own, examples include: cash, accounts receivable, notes
receivable, prepaid accounts, supplies, equipment, buildings, land
Liability accounts - answer✔You owe, Examples include: accounts payable, notes payable,
accrued liabilities, unearned revenue
Shareholders equity accounts - answer✔Assets - common stock and retained earnings
Closing entries - answer✔Entries that transfer the balances of all temporary accounts (revenues,
expenses, and dividends) to the balance of the Retained Earnings account
Adjusting entries - answer✔journal entries recorded to update general ledger accounts at the end
of a fiscal period
12/3/2024 11:27AM
Financial Accounting Exam 1 Questions
With Correct Answers
Balance Sheet - answer✔A financial statement that reports assets, liabilities, and owner's equity
at a specific point in time.
Income Statement - answer✔A financial statement showing the revenue and expenses for a fiscal
period. Revenues - expenses = net income
Income Summary Account - answer✔used to accumulate and summarize the revenue and
expenses for the period
Trial Balance - answer✔a list of accounts and their balances at a given time
Statement of Cash Flows - answer✔A financial statement that provides financial information
about the cash receipts and cash payments of a business for a specific period of time.
permanent accounts - answer✔all accounts that appear in the balance sheet; account balances are
carried forward from period to period
temporary accounts - answer✔Revenue, expense, and dividend accounts whose balances a
company transfers to Retained Earnings at the end of an accounting period.
, ©SIRJOEL EXAM SOLUTIONS
12/3/2024 11:27AM
Business entity assumption - answer✔A business is accounted for separately from other business
entities, including its owner.
time period assumption - answer✔Assumption that an organization's activities can be divided
into specific time periods such as months, quarters, or years.
Revenue recognition principle - answer✔The principle that companies recognize revenue in the
accounting period in which the performance obligation is satisfied.
Going Concern Assumption - answer✔The assumption that the company will continue in
operation for the foreseeable future.
Asset Accounts - answer✔You own, examples include: cash, accounts receivable, notes
receivable, prepaid accounts, supplies, equipment, buildings, land
Liability accounts - answer✔You owe, Examples include: accounts payable, notes payable,
accrued liabilities, unearned revenue
Shareholders equity accounts - answer✔Assets - common stock and retained earnings
Closing entries - answer✔Entries that transfer the balances of all temporary accounts (revenues,
expenses, and dividends) to the balance of the Retained Earnings account
Adjusting entries - answer✔journal entries recorded to update general ledger accounts at the end
of a fiscal period
