Financial Accounting Final Exam (Ivy
Tech)
Revenues - ✔✔ correct answer Gross increase in equity from a company's business activities that earn
income; also called sales.
Expenses - ✔✔ correct answer Outflows or using up of assets as part of operations of a business to
generate sales.
Accounts Receivable - ✔✔ correct answer Amounts to be received in the future due to the sale of goods
or services
Accounting Equation - ✔✔ correct answer Assets = Liabilities + Equity
Income Statement - ✔✔ correct answer describes a company's revenues and expenses along with the
resulting net income or loss over a period of time due to earnings activities
Accounts on Income Statement - ✔✔ correct answer Revenues - Expenses
Balance Sheet - ✔✔ correct answer Financial statement that lists types and dollar amounts of assets,
liabilities, and equity at a specific date.
Accounts on balance sheet - ✔✔ correct answer assets, liabilities, equity
Primary Objective of Financial Reporting - ✔✔ correct answer to provide information that is useful to
investors and creditors for decision making
Expanded Accounting Equation - ✔✔ correct answer Assets = Liabilities + Common Stock + Revenues -
Expenses - Dividends
FASB (Financial Accounting Standards Board) - ✔✔ correct answer sets accounting standards (GAAP) in
the U.S.
, Financial Accounting Final Exam (Ivy
Tech)
T account - ✔✔ correct answer debit left, credit right
Normal Balance of Expenses - ✔✔ correct answer Debit (decrease equity)
Normal balance of Revenues - ✔✔ correct answer credit
Normal Balance of dividends - ✔✔ correct answer Dr. (it decreases owner's equity)
normal balance of assets - ✔✔ correct answer Debit Increases. Credit decreases. NB: Debit.
normal balance of liabilities - ✔✔ correct answer credit increases, debit decreases NB:Credit
Journal - ✔✔ correct answer Record in which transactions are entered before they are posted to ledger
accounts; also called book of original entry.
Journalizing - ✔✔ correct answer Recording transactions in a journal
Trial Balance - ✔✔ correct answer a list of accounts and their balances at a given time
Trial Balance Order of Accounts - ✔✔ correct answer assets, liabilities, equity, dividends, revenue,
expenses
journal entry: purchase of equipment - ✔✔ correct answer debit equipment, credit cash
Accrual Basis Accounting - ✔✔ correct answer reporting revenue when it is earned and expenses when
they are incurred (basis for GAAP)
salary expense adjustment - ✔✔ correct answer debit salaries expense, credit salaries payable
Tech)
Revenues - ✔✔ correct answer Gross increase in equity from a company's business activities that earn
income; also called sales.
Expenses - ✔✔ correct answer Outflows or using up of assets as part of operations of a business to
generate sales.
Accounts Receivable - ✔✔ correct answer Amounts to be received in the future due to the sale of goods
or services
Accounting Equation - ✔✔ correct answer Assets = Liabilities + Equity
Income Statement - ✔✔ correct answer describes a company's revenues and expenses along with the
resulting net income or loss over a period of time due to earnings activities
Accounts on Income Statement - ✔✔ correct answer Revenues - Expenses
Balance Sheet - ✔✔ correct answer Financial statement that lists types and dollar amounts of assets,
liabilities, and equity at a specific date.
Accounts on balance sheet - ✔✔ correct answer assets, liabilities, equity
Primary Objective of Financial Reporting - ✔✔ correct answer to provide information that is useful to
investors and creditors for decision making
Expanded Accounting Equation - ✔✔ correct answer Assets = Liabilities + Common Stock + Revenues -
Expenses - Dividends
FASB (Financial Accounting Standards Board) - ✔✔ correct answer sets accounting standards (GAAP) in
the U.S.
, Financial Accounting Final Exam (Ivy
Tech)
T account - ✔✔ correct answer debit left, credit right
Normal Balance of Expenses - ✔✔ correct answer Debit (decrease equity)
Normal balance of Revenues - ✔✔ correct answer credit
Normal Balance of dividends - ✔✔ correct answer Dr. (it decreases owner's equity)
normal balance of assets - ✔✔ correct answer Debit Increases. Credit decreases. NB: Debit.
normal balance of liabilities - ✔✔ correct answer credit increases, debit decreases NB:Credit
Journal - ✔✔ correct answer Record in which transactions are entered before they are posted to ledger
accounts; also called book of original entry.
Journalizing - ✔✔ correct answer Recording transactions in a journal
Trial Balance - ✔✔ correct answer a list of accounts and their balances at a given time
Trial Balance Order of Accounts - ✔✔ correct answer assets, liabilities, equity, dividends, revenue,
expenses
journal entry: purchase of equipment - ✔✔ correct answer debit equipment, credit cash
Accrual Basis Accounting - ✔✔ correct answer reporting revenue when it is earned and expenses when
they are incurred (basis for GAAP)
salary expense adjustment - ✔✔ correct answer debit salaries expense, credit salaries payable
