Accounting 231 Exam 2 KSU Question
and answers already passed
2025/2026
What is an accounting event? - correct answer ✔An economic event that has met ALL of the three
criteria necessary to qualify as an accounting event *they will be recorded in the accounting records*
What does it take for an accounting event to occur? - correct answer ✔1. must be specific to the entity
2. must create or change a right or obligation
3. must be capable of measurement or estimation
Define asset - correct answer ✔Right to use an economic resource which is specific to the entity and
can be measured *Expected to provide future benefit to the firm*
Examples of Assets - correct answer ✔-Cash
-Accounts receivable
-Supplies
-Inventory
-Equipment
-Notes receivable
Define liability - correct answer ✔Obligation to transfer resources to the future
Examples of Liabilities - correct answer ✔-Notes Payable
-Accounts Payable
-Utilities Payable
, -Unearned Revenue
Define Owner's Equity - correct answer ✔Net worth of the business
Examples of Owners Equity - correct answer ✔-Sole Proprietorship
-Partnership
-Corporation
What is contra equity - correct answer ✔Owner's equity account with a debit balance instead of
normal credit balance
Accounting equations - correct answer ✔Assets = Liabilities + Owner's Equity
Assets = Equities
Resources = Creditors Claims + Owners Claims
Define Expense - correct answer ✔-When resources are utilized or consumed
-Cash has nothing to do with the earnings process under GAAP
Examples of Expenses - correct answer ✔1. Receive a bill from the utility company
2. Paid the utility bill received above
3. Purchases gas for a delivery vehicle and paid cash
4. Used some if the office supplies in the supply cabinet
How do you know when you have expenses? - correct answer ✔When resources are utilized or
consumed
and answers already passed
2025/2026
What is an accounting event? - correct answer ✔An economic event that has met ALL of the three
criteria necessary to qualify as an accounting event *they will be recorded in the accounting records*
What does it take for an accounting event to occur? - correct answer ✔1. must be specific to the entity
2. must create or change a right or obligation
3. must be capable of measurement or estimation
Define asset - correct answer ✔Right to use an economic resource which is specific to the entity and
can be measured *Expected to provide future benefit to the firm*
Examples of Assets - correct answer ✔-Cash
-Accounts receivable
-Supplies
-Inventory
-Equipment
-Notes receivable
Define liability - correct answer ✔Obligation to transfer resources to the future
Examples of Liabilities - correct answer ✔-Notes Payable
-Accounts Payable
-Utilities Payable
, -Unearned Revenue
Define Owner's Equity - correct answer ✔Net worth of the business
Examples of Owners Equity - correct answer ✔-Sole Proprietorship
-Partnership
-Corporation
What is contra equity - correct answer ✔Owner's equity account with a debit balance instead of
normal credit balance
Accounting equations - correct answer ✔Assets = Liabilities + Owner's Equity
Assets = Equities
Resources = Creditors Claims + Owners Claims
Define Expense - correct answer ✔-When resources are utilized or consumed
-Cash has nothing to do with the earnings process under GAAP
Examples of Expenses - correct answer ✔1. Receive a bill from the utility company
2. Paid the utility bill received above
3. Purchases gas for a delivery vehicle and paid cash
4. Used some if the office supplies in the supply cabinet
How do you know when you have expenses? - correct answer ✔When resources are utilized or
consumed
