2024 Ivy Tech Accounting 101 Final Exam Study Guide Questions and Answers 100% Solved correctly

What is the primary responsibility of FASB? - Answer-Developing GAAP What is the accounting equation? - Answer-Assets=Liability+Equity What is the definition of revenue? - Answer-Money earned from providing a product or service Is CoGS an expense? - Answer-Yes What is the primary objective of financial reporting? - Answer-To provide info for decision making What accounts are on the balance sheet? - Answer-Assets, liabilities, equity What accounts are on the income statement? - Answer-Revenues, expenses How does purchasing equipment on credit affect the Accounting Equation? - Answer-Assets increase, liabilities increase What is the normal balance for assets, liabilities, revenues, and expenses? - Answer-Debit, credit, credit, credit What is the definition of journalizing? - Answer-Recording transactions What is a trial balance? - Answer-A statement that lists company's accounts with ending balances What is the order of accounts on a trial balance? - Answer-Assets, liabilities, common stock, dividends, revenue, expensesWhen are revenue and expenses recognized in accrual accounting? - Answer-When earned and when incurred What is the adjusting entry for accrued wages? - Answer-salaries expense/salaries payable Closing entries - Answer-Set to 0 at the end of each year and balances are transferred to retained earnings What is the equation for gross profit? - Answer-Gross profit=Net Sales-CoGS