ACCY 206 EXAM 1 Study Guide
questions and answers 2025
already graded A+
What is a debit? - answer the left side of an account
What is a credit? - answer the right side of an account
What is the accounting equation? - answer Assets = Liabilities +
Owner's Equity
What does normal balance mean? - answer how the account
increase; the expected balance of the account
What are the 4 financial statements in order? - answer 1. Income
statement
2. Retained earnings
3. Balance sheet
4. Statement of cash flows
Examples of Natural debits - answer Expenses, Assets, Dividends
(Debits=DEAD)
Examples of Natural credits - answer Owner's Equity (CS and RE),
Liabilities, Revenue (C=COLR)
What kind of items show up on income statements? - answer
Revenues and expenses
, What are dividends? - answer distributions to stockholders that
reduce retained earnings
NOT AN EXPENSE
Statement of Retained Earnings - answer Beginning of year RE
ADD: Net Income
LESS: Dividends
=End of the year RE
Balance Sheet - answer 1. Assets: Current assets, Long-term
investments, PPE, Intangible Assets
2. Liabilities and Owner's Equity: Current liabilities, Long-term
liabilities, Stockholder's equity
What is the formula for net income? - answer Revenues-expenses=
Net Income
Assumptions in Financial Reporting - answer 1. Going concern
2. Monetary unit
3. Economic entity
4. Periodicity
Going concern - answer means you are going to stay in business,
anticipate the company will continue; business will be around for
the foreseeable future
questions and answers 2025
already graded A+
What is a debit? - answer the left side of an account
What is a credit? - answer the right side of an account
What is the accounting equation? - answer Assets = Liabilities +
Owner's Equity
What does normal balance mean? - answer how the account
increase; the expected balance of the account
What are the 4 financial statements in order? - answer 1. Income
statement
2. Retained earnings
3. Balance sheet
4. Statement of cash flows
Examples of Natural debits - answer Expenses, Assets, Dividends
(Debits=DEAD)
Examples of Natural credits - answer Owner's Equity (CS and RE),
Liabilities, Revenue (C=COLR)
What kind of items show up on income statements? - answer
Revenues and expenses
, What are dividends? - answer distributions to stockholders that
reduce retained earnings
NOT AN EXPENSE
Statement of Retained Earnings - answer Beginning of year RE
ADD: Net Income
LESS: Dividends
=End of the year RE
Balance Sheet - answer 1. Assets: Current assets, Long-term
investments, PPE, Intangible Assets
2. Liabilities and Owner's Equity: Current liabilities, Long-term
liabilities, Stockholder's equity
What is the formula for net income? - answer Revenues-expenses=
Net Income
Assumptions in Financial Reporting - answer 1. Going concern
2. Monetary unit
3. Economic entity
4. Periodicity
Going concern - answer means you are going to stay in business,
anticipate the company will continue; business will be around for
the foreseeable future
