ACCOUNTING 101 FINAL EXAM E
COMPREHENSIVE TEST PAPER QUESTIONS
AND SOLUTIONS
◉ income statement.
Answer: revenues minus expenses equal net income
◉ net income.
Answer: revenues - expenses
◉ order of statement preparation.
Answer: income statement, statement of retained earnings, balance
sheet and statement of cash flows
◉ account and types of accounts.
Answer: a record or statement of financial expenditure or receipts
relating to a particular period or purpose
real, personal, and nominal
◉ how transactions affect the accounting equation.
,Answer: the balance is maintained because every business
transaction affects at least two of a company's accounts such as:
when a company borrows money from a bank
the company's assets will increase and its liabilities will increase by
the same amount
◉ left side.
Answer: debit
◉ right side.
Answer: credit
◉ initial recording of transaction is made in a journal/general
journal is.
Answer: journal entry, journalizing this entry is then posted to
ledger/general ledger
◉ purpose of trial balance.
Answer: lists all accounts with their balances, assets first, then
liabilities and stockholders equity. shows whether total debits equal
total credits
, ◉ accounts receivable.
Answer: money owed to a business by its clients ( customers or
debtors) and shown on its balance sheet as an asset
◉ accounts payable.
Answer: money owed by a business to its suppliers shown as a
liability on a company's balance sheet
◉ ending balance.
Answer: the starting balance is equal to the ending balance
◉ when is revenue recognized with respect to accrual accounting.
Answer: when earned
◉ when is revenue recognized with respect to cash basis accounting.
Answer: when cash is received
◉ when are the adjusting entries required.
Answer: end of the period
◉ supplies.
Answer: debit- supplies expense
COMPREHENSIVE TEST PAPER QUESTIONS
AND SOLUTIONS
◉ income statement.
Answer: revenues minus expenses equal net income
◉ net income.
Answer: revenues - expenses
◉ order of statement preparation.
Answer: income statement, statement of retained earnings, balance
sheet and statement of cash flows
◉ account and types of accounts.
Answer: a record or statement of financial expenditure or receipts
relating to a particular period or purpose
real, personal, and nominal
◉ how transactions affect the accounting equation.
,Answer: the balance is maintained because every business
transaction affects at least two of a company's accounts such as:
when a company borrows money from a bank
the company's assets will increase and its liabilities will increase by
the same amount
◉ left side.
Answer: debit
◉ right side.
Answer: credit
◉ initial recording of transaction is made in a journal/general
journal is.
Answer: journal entry, journalizing this entry is then posted to
ledger/general ledger
◉ purpose of trial balance.
Answer: lists all accounts with their balances, assets first, then
liabilities and stockholders equity. shows whether total debits equal
total credits
, ◉ accounts receivable.
Answer: money owed to a business by its clients ( customers or
debtors) and shown on its balance sheet as an asset
◉ accounts payable.
Answer: money owed by a business to its suppliers shown as a
liability on a company's balance sheet
◉ ending balance.
Answer: the starting balance is equal to the ending balance
◉ when is revenue recognized with respect to accrual accounting.
Answer: when earned
◉ when is revenue recognized with respect to cash basis accounting.
Answer: when cash is received
◉ when are the adjusting entries required.
Answer: end of the period
◉ supplies.
Answer: debit- supplies expense
