ACCT 215- Final Exam Questions And
Already Passed Answers.
Basic Accounting Equation - Answer Assets = Liabilities + Stockholders' Equity
Extended Accounting Equation - Answer assets = liabilities + (revenue - (expenses + dividends))
Income Statement - Answer A financial statement showing the revenue and expenses for a fiscal
period.
Balance Sheet - Answer A financial statement that reports assets, liabilities, and common stock owner's
on a specific date.
Retained Earnings Statement - Answer Explains changes in retained earnings from net income (or loss)
and from any dividends over a period of time
Normal balance - Answer increasing side
Debit means - Answer The event had an effect on the left side of the T-account
Credit means - Answer The event had an effect on the right side of the T-account
Debit accounts - Answer - Assets, dividends, and expenses
- Remember "All Day Everyday"
- To decrease these accounts credit them
Credit accounts - Answer - Liabilities, Revenue, Common Stock
- Remember "Love Really Counts"
- To decrease these accounts debit them
, Recording Process - Answer 1.) Analyze each transaction in terms of its effect on the accounts.
2.) Enter the transaction information in a journal.
3.) Transfer the journal information to the appropriate accounts in the ledger.
Accrual Basis Accounting - Answer reporting income when it is earned and expenses when they are
incurred
When/why are adjusting entries prepared? - Answer Adjusting entries made at END of period so that
all accounts are updated for financial statements
Journalize Closing Entries - Answer
Temporary Accounts - Answer Revenue, expense, and dividend accounts whose balances a company
transfers to Retained Earnings at the end of an accounting period.
Permanent Accounts - Answer Assets, liabilities, Common Stock, and Retained Earnings whose balances
are carried forward to the next accounting period
Closing Income Summary - Answer 1.) Debit each revenue account and credit income summary
2.) Debit income summary and credit expense accounts
3.) Debit income summary and credit Retained Earnings for the amount of net income
4.) Debit Retained Earnings for the balance in the Dividend account and credit the Dividend account
Net Sales - Answer sales - sales returns and allowances - sales discounts
Gross Profit - Answer Net Sales - COGS
Income from Operations - Answer gross profit - operating expenses
Already Passed Answers.
Basic Accounting Equation - Answer Assets = Liabilities + Stockholders' Equity
Extended Accounting Equation - Answer assets = liabilities + (revenue - (expenses + dividends))
Income Statement - Answer A financial statement showing the revenue and expenses for a fiscal
period.
Balance Sheet - Answer A financial statement that reports assets, liabilities, and common stock owner's
on a specific date.
Retained Earnings Statement - Answer Explains changes in retained earnings from net income (or loss)
and from any dividends over a period of time
Normal balance - Answer increasing side
Debit means - Answer The event had an effect on the left side of the T-account
Credit means - Answer The event had an effect on the right side of the T-account
Debit accounts - Answer - Assets, dividends, and expenses
- Remember "All Day Everyday"
- To decrease these accounts credit them
Credit accounts - Answer - Liabilities, Revenue, Common Stock
- Remember "Love Really Counts"
- To decrease these accounts debit them
, Recording Process - Answer 1.) Analyze each transaction in terms of its effect on the accounts.
2.) Enter the transaction information in a journal.
3.) Transfer the journal information to the appropriate accounts in the ledger.
Accrual Basis Accounting - Answer reporting income when it is earned and expenses when they are
incurred
When/why are adjusting entries prepared? - Answer Adjusting entries made at END of period so that
all accounts are updated for financial statements
Journalize Closing Entries - Answer
Temporary Accounts - Answer Revenue, expense, and dividend accounts whose balances a company
transfers to Retained Earnings at the end of an accounting period.
Permanent Accounts - Answer Assets, liabilities, Common Stock, and Retained Earnings whose balances
are carried forward to the next accounting period
Closing Income Summary - Answer 1.) Debit each revenue account and credit income summary
2.) Debit income summary and credit expense accounts
3.) Debit income summary and credit Retained Earnings for the amount of net income
4.) Debit Retained Earnings for the balance in the Dividend account and credit the Dividend account
Net Sales - Answer sales - sales returns and allowances - sales discounts
Gross Profit - Answer Net Sales - COGS
Income from Operations - Answer gross profit - operating expenses
