Accounting 101 Exam Questions with
100% Solved Answers
Where will revenue show up? - Answer-income or RE statement
Where will inventory show up? - Answer-current assets
Where will land show up? - Answer-non-current assets
Where will common stock show up? - Answer-stockholders' equity
Where will accounts receivable show up? - Answer-current assets
Where will investments in real estate show up? - Answer-non-current assets
Where will cash show up? - Answer-current assets
Where will taxes payable show up? - Answer-current liabs
Where will retained earnings show up? - Answer-stockholders' equity
Where will dividends show up? - Answer-RE statement
Where will accumulated depreciation show up? - Answer-non-current assets
Where will patents show up? - Answer-non-current assets
Where will bonds payable show up? - Answer-current assets
Where will supplies show up? - Answer-current assets
Where will supplies expense show up? - Answer-income statement as expense
Where will salaries payable show up? - Answer-current liabilities
Where will building show up? - Answer-non-current assets
Where will long-term bank loan payable show up? - Answer-long term liabs.
, Periodicity assumption - Answer-financial statements are prepared at regular intervals
Going concern assumption - Answer-belief that company will continue to operate for the
forseeable future
Faithful representation - Answer-desire to minimize errors and bias in financial
statements
Monetary unit assumption - Answer-all items for US companies must be converted to
US dollars for reporting purposes
Comparability - Answer-ability to easily evaluate one company's results relative to
another's
Cost constraint - Answer-weighing the cost of providing the info against the benefit to
the users of the financial statements
Relevance - Answer-the quality of info that indicated the info makes a difference in a
decision
Historical cost principle - Answer-belief that items should be reported on the balance
sheet at the price that was paid to acquire item
Consistency - Answer-a company's use of the same accounting principles and methods
from year to year
Economic entity assumption - Answer-a transaction such as a mortgage payment
belongs to the owner not to their company
Materilaity - Answer-the auditor discovered a very small dollar item that was recorded
incorrectly and decided not to fix it
Full disclosure principle - Answer-the reporting of all info that would make a difference
to financial statement users
How do you increase an asset account? - Answer-debit
How do you increase an owner's equity account? - Answer-credit
How do you decrease an asset account? - Answer-credit
How do you decrease a liability account? - Answer-debit
How do you decrease an owner's equity account? - Answer-debit
How do you increase a revenue account? - Answer-credit
100% Solved Answers
Where will revenue show up? - Answer-income or RE statement
Where will inventory show up? - Answer-current assets
Where will land show up? - Answer-non-current assets
Where will common stock show up? - Answer-stockholders' equity
Where will accounts receivable show up? - Answer-current assets
Where will investments in real estate show up? - Answer-non-current assets
Where will cash show up? - Answer-current assets
Where will taxes payable show up? - Answer-current liabs
Where will retained earnings show up? - Answer-stockholders' equity
Where will dividends show up? - Answer-RE statement
Where will accumulated depreciation show up? - Answer-non-current assets
Where will patents show up? - Answer-non-current assets
Where will bonds payable show up? - Answer-current assets
Where will supplies show up? - Answer-current assets
Where will supplies expense show up? - Answer-income statement as expense
Where will salaries payable show up? - Answer-current liabilities
Where will building show up? - Answer-non-current assets
Where will long-term bank loan payable show up? - Answer-long term liabs.
, Periodicity assumption - Answer-financial statements are prepared at regular intervals
Going concern assumption - Answer-belief that company will continue to operate for the
forseeable future
Faithful representation - Answer-desire to minimize errors and bias in financial
statements
Monetary unit assumption - Answer-all items for US companies must be converted to
US dollars for reporting purposes
Comparability - Answer-ability to easily evaluate one company's results relative to
another's
Cost constraint - Answer-weighing the cost of providing the info against the benefit to
the users of the financial statements
Relevance - Answer-the quality of info that indicated the info makes a difference in a
decision
Historical cost principle - Answer-belief that items should be reported on the balance
sheet at the price that was paid to acquire item
Consistency - Answer-a company's use of the same accounting principles and methods
from year to year
Economic entity assumption - Answer-a transaction such as a mortgage payment
belongs to the owner not to their company
Materilaity - Answer-the auditor discovered a very small dollar item that was recorded
incorrectly and decided not to fix it
Full disclosure principle - Answer-the reporting of all info that would make a difference
to financial statement users
How do you increase an asset account? - Answer-debit
How do you increase an owner's equity account? - Answer-credit
How do you decrease an asset account? - Answer-credit
How do you decrease a liability account? - Answer-debit
How do you decrease an owner's equity account? - Answer-debit
How do you increase a revenue account? - Answer-credit
