ACCT 200 EXAM 1 QUESTIONS WITH VERIFIED
ANSWERS
Three Types of Businesses - Answers - sole proprietorship, partnership, corporation
Sole Proprietorship - Answers - business owned by one person
Partnership - Answers - business owned by two or more people associated as partners
Corporation - Answers - separate legal entity for which evidence of ownership is
provided by shares of stock
Types of Financial Statements - Answers - income statement, statement of retained
earnings, balance sheet, statement of cash flows
Beg RE + Net Income - Dividends = End RE - Answers - Equation for Ending Retained
Earnings
4000 - Answers - If A = 6,000, SE = 2,000, L = ?
3000 - Answers - If L ↑ 4,000, SE ↓ 1,000, then A?
Financial Accounting Standards Board (US standard-setting body) - Answers - What
does FASB stand for?
Generally Accepted Accounting Principles (US rules for financial reporting) - Answers -
What does GAAP stand for?
International Accounting Standards Board (International standard-setting body) -
Answers - What does IASB stand for?
International Financial Reporting Standards (International rules for financial reporting) -
Answers - What does IFRS stand for?
Relevance and Faithful Representation - Answers - Two objectives of financial reporting
Relevance - Answers - Information makes a difference in a business decision
Faithful Representation - Answers - Information accurately reports what actually
happened
CA, LTA/Investments, PPE, Intangible, CL, LTL, SE - Answers - 7 sections of Balance
Sheet in order
, Each transaction affects two or more accounts, equation must stay in balance, debits
always equal credits - Answers - Rules for Expanded Accounting Equation
3000 - Answers - If A = 20,000, L = 7,000, CS = 5,000, Beg. R/E = 1,000, Rev = 12,000,
Divs = 2,000, then what are Expenses?
Side where increases in accounts are recorded - Answers - Normal Balance to
Accounts
Debit - Answers - Normal balance for expenses, assets and dividends
Credit - Answers - Normal balance for liabilities, equity and revenue
Debit cash, credit service revenue - Answers - Perform service for cash journal entry
Debit accounts receivable, credit service revenue - Answers - Perform service on
account journal entry
Debit supplies, credit accounts payable - Answers - Buy supplies on account journal
entry
Debit printing expense, credit cash - Answers - Buy printing for cash journal entry
Debit printing expense, credit accounts payable - Answers - Buy printing on account
journal entry
Debit accounts payable, credit cash - Answers - Pay off Accounts Payable journal entry
Debit prepaid rent, credit cash - Answers - Prepay rent journal entry
Debit cash, credit common stock - Answers - Issue shares of Common Stock journal
entry
Recognize revenue when the obligation is satisfied - Answers - Revenue Recognition
Cash paid before expense recorded (insurance, supplies, advertising, rent, PP&E) -
Answers - Prepaid Expense
Cash receipt before revenue recorded (season tickets, airline tickets, gift cards, client
deposits) - Answers - Unearned Revenue
Expense recorded before cash paid (bills, interest exp., tax, salaries) - Answers -
Accrued Expense
ANSWERS
Three Types of Businesses - Answers - sole proprietorship, partnership, corporation
Sole Proprietorship - Answers - business owned by one person
Partnership - Answers - business owned by two or more people associated as partners
Corporation - Answers - separate legal entity for which evidence of ownership is
provided by shares of stock
Types of Financial Statements - Answers - income statement, statement of retained
earnings, balance sheet, statement of cash flows
Beg RE + Net Income - Dividends = End RE - Answers - Equation for Ending Retained
Earnings
4000 - Answers - If A = 6,000, SE = 2,000, L = ?
3000 - Answers - If L ↑ 4,000, SE ↓ 1,000, then A?
Financial Accounting Standards Board (US standard-setting body) - Answers - What
does FASB stand for?
Generally Accepted Accounting Principles (US rules for financial reporting) - Answers -
What does GAAP stand for?
International Accounting Standards Board (International standard-setting body) -
Answers - What does IASB stand for?
International Financial Reporting Standards (International rules for financial reporting) -
Answers - What does IFRS stand for?
Relevance and Faithful Representation - Answers - Two objectives of financial reporting
Relevance - Answers - Information makes a difference in a business decision
Faithful Representation - Answers - Information accurately reports what actually
happened
CA, LTA/Investments, PPE, Intangible, CL, LTL, SE - Answers - 7 sections of Balance
Sheet in order
, Each transaction affects two or more accounts, equation must stay in balance, debits
always equal credits - Answers - Rules for Expanded Accounting Equation
3000 - Answers - If A = 20,000, L = 7,000, CS = 5,000, Beg. R/E = 1,000, Rev = 12,000,
Divs = 2,000, then what are Expenses?
Side where increases in accounts are recorded - Answers - Normal Balance to
Accounts
Debit - Answers - Normal balance for expenses, assets and dividends
Credit - Answers - Normal balance for liabilities, equity and revenue
Debit cash, credit service revenue - Answers - Perform service for cash journal entry
Debit accounts receivable, credit service revenue - Answers - Perform service on
account journal entry
Debit supplies, credit accounts payable - Answers - Buy supplies on account journal
entry
Debit printing expense, credit cash - Answers - Buy printing for cash journal entry
Debit printing expense, credit accounts payable - Answers - Buy printing on account
journal entry
Debit accounts payable, credit cash - Answers - Pay off Accounts Payable journal entry
Debit prepaid rent, credit cash - Answers - Prepay rent journal entry
Debit cash, credit common stock - Answers - Issue shares of Common Stock journal
entry
Recognize revenue when the obligation is satisfied - Answers - Revenue Recognition
Cash paid before expense recorded (insurance, supplies, advertising, rent, PP&E) -
Answers - Prepaid Expense
Cash receipt before revenue recorded (season tickets, airline tickets, gift cards, client
deposits) - Answers - Unearned Revenue
Expense recorded before cash paid (bills, interest exp., tax, salaries) - Answers -
Accrued Expense
