ACCOUNTING 114 TEST #1 QUESTIONS
WITH VERIFIED ANSWERS
the historical cost principle - ANSWER-assets should be recorded at their cost
which of the events are not recorded on the accounting records? - ANSWER-an
employee is terminated
A company’s assets decreased 50,000 and its liabilities decreased 50000. its owners
equity therefore - ANSWER-did not change
Payment of an account payable affects the components of the accounting equation in
the following way - ANSWER-decreases assets and decreases liabilities
On the last day of the period, X Company buys a $900 machine on credit. this will
affect: - ANSWER-balance sheet
The financial statement that reports liabilities, assets, and OE is the - ANSWER-balance
sheet
Services performed by a public accountant include - ANSWER-auditing, taxation, and
management consulting
An account is - ANSWER-an individual accounting record of increases and decreases in
a specific asset, liability, and owner;s equity items
Debits - ANSWER-increase assets and decrease liabilities
A revenue account - ANSWER-is increased by credits (revenue and expense reversed
and liabilities increased by credit)
Accounts that normally have debit balances are - ANSWER-assets, owners drawings
and expenses
The expanded accounting equation is - ANSWER-Assets = Liabilities + Owner's Capital
- Owner's Drawings + Revenues - Expenses
parts of the recording process include - ANSWER-analyzing transactions, entering
transactions in a journal, posting jounal entries. (not preparing an income statement)
A journal is - ANSWER-a book of original entry, provides chronological record of
transactions, helps locate errors, and discloses the complete effect of a transaction
WITH VERIFIED ANSWERS
the historical cost principle - ANSWER-assets should be recorded at their cost
which of the events are not recorded on the accounting records? - ANSWER-an
employee is terminated
A company’s assets decreased 50,000 and its liabilities decreased 50000. its owners
equity therefore - ANSWER-did not change
Payment of an account payable affects the components of the accounting equation in
the following way - ANSWER-decreases assets and decreases liabilities
On the last day of the period, X Company buys a $900 machine on credit. this will
affect: - ANSWER-balance sheet
The financial statement that reports liabilities, assets, and OE is the - ANSWER-balance
sheet
Services performed by a public accountant include - ANSWER-auditing, taxation, and
management consulting
An account is - ANSWER-an individual accounting record of increases and decreases in
a specific asset, liability, and owner;s equity items
Debits - ANSWER-increase assets and decrease liabilities
A revenue account - ANSWER-is increased by credits (revenue and expense reversed
and liabilities increased by credit)
Accounts that normally have debit balances are - ANSWER-assets, owners drawings
and expenses
The expanded accounting equation is - ANSWER-Assets = Liabilities + Owner's Capital
- Owner's Drawings + Revenues - Expenses
parts of the recording process include - ANSWER-analyzing transactions, entering
transactions in a journal, posting jounal entries. (not preparing an income statement)
A journal is - ANSWER-a book of original entry, provides chronological record of
transactions, helps locate errors, and discloses the complete effect of a transaction
