KSU ACCTG 231 EXAM 2 Question
and answers 100% correct 2025/2026
What is an accounting event? What does it take to have one occur? - correct answer ✔Must meet all 3
criteria:
1. Must be specific to the entity (business)
2. Must create or change a right or obligation (performance)
3. must be capable of measurement or estimation
Define Asset. List Examples - correct answer ✔the right to use
examples: cash, A/R, supplies, patents, investments
Define Liability - correct answer ✔obligation to provide, what is the debt?
examples:
A/P, unearned revenue, N/P
Define Owner's Equity - correct answer ✔revenue, expense, capital, withdrawal, retained earnings,
dividend
What is a 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
Where would the relationship between assets, liabilities, and owner's equity e communicated to user of
the financial information? - correct answer ✔Balance Sheet
, Define Revenue. List Examples - correct answer ✔as good are provided (performance) to the customers
it is recognized
Examples:
perform services for a client and send them a bill
perform services and paid cash
sent a customer a bill for services performed
Define Expense. List Examples - correct answer ✔goods or services consumed by you
Examples:
receive a bill from utility company
paid the bill
used some of office supplies
purchased gas for a delivery
Where are revenues and expenses communicated to user of financial information? - correct answer
✔Income Statement
What is the purpose of accounts? - correct answer ✔classification devices used to summarize the
increases, decreases, and resulting balances for items, Use T accounts
What does debit and credit mean? - correct answer ✔Credit= right
debt = left
What are the normal balances/increase/decrease for asset, liability, owner's equity revenue and
expense accounts? - correct answer ✔Assets and Expenses: normal debit balance
Liabilities, owner's equity, and Revenue: normal credit balance
and answers 100% correct 2025/2026
What is an accounting event? What does it take to have one occur? - correct answer ✔Must meet all 3
criteria:
1. Must be specific to the entity (business)
2. Must create or change a right or obligation (performance)
3. must be capable of measurement or estimation
Define Asset. List Examples - correct answer ✔the right to use
examples: cash, A/R, supplies, patents, investments
Define Liability - correct answer ✔obligation to provide, what is the debt?
examples:
A/P, unearned revenue, N/P
Define Owner's Equity - correct answer ✔revenue, expense, capital, withdrawal, retained earnings,
dividend
What is a 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
Where would the relationship between assets, liabilities, and owner's equity e communicated to user of
the financial information? - correct answer ✔Balance Sheet
, Define Revenue. List Examples - correct answer ✔as good are provided (performance) to the customers
it is recognized
Examples:
perform services for a client and send them a bill
perform services and paid cash
sent a customer a bill for services performed
Define Expense. List Examples - correct answer ✔goods or services consumed by you
Examples:
receive a bill from utility company
paid the bill
used some of office supplies
purchased gas for a delivery
Where are revenues and expenses communicated to user of financial information? - correct answer
✔Income Statement
What is the purpose of accounts? - correct answer ✔classification devices used to summarize the
increases, decreases, and resulting balances for items, Use T accounts
What does debit and credit mean? - correct answer ✔Credit= right
debt = left
What are the normal balances/increase/decrease for asset, liability, owner's equity revenue and
expense accounts? - correct answer ✔Assets and Expenses: normal debit balance
Liabilities, owner's equity, and Revenue: normal credit balance
