ACCOUNTING 1 FINAL EXAM REVIEW
2025 QUESTIONS AND ANSWERS
What is the fundamental accounting equation? - ANS Assets = Liabilities + Owners Equity
Amounts owned by a business are referred to as... - ANS Liabilities
Which of the following is not considered an account?
a. Accounts Receivable
b. Revenues
c. Accounts Payable
d. Cash
e. Equipment - ANS b. Revenues
A business received $600 cash from Charge Customers to apply on account. The effect of the
transaction is an increase in assets (A/R) and a... - ANS decrease in an asset (cash)
When a T account has several items on both sides, the balance of the account is written... -
ANS on the side with the larger total
Which of the following accounts decrease when they are debited?
a. Drawing & Capital
b. Liabilities & Expenses
1 Copyright ©2025 FYNDLAY ALL RIGHTS RESERVED.
,c. Assets and Drawing
d. Capital and Liabilities
e. Expenses and Assets - ANS d. Capital and Liabilities
The process of subtotaling both sides of an account and recording the amount on that side is
known as... - ANS Footing
The first step in the posting process is recording the... - ANS date in the ledger account
The proof that the debits and credits in the ledger are equal is called the... - ANS Trial
Balance
Apple Company purchased $6000 in equipment, paying $2000 in cash and placing the
remainder on an account. The journal entry would look like this: - ANS Equipment $6000
Accounts Payable $4000
Cash $2000
The ___________ requires that assets be recorded at the actual cost. - ANS Cost Principle
The _______ is a book or file containing the activity by accounts of a business. - ANS General
Ledger
Accountants refer to the wages earned by employees but not paid to them at the end of an
accounting period as: - ANS Accrued wages
If the cost of a piece of equipment is $15000 and accumulated depreciation amounts to $5000,
the book value of the equipment is: - ANS $10,000
Net income for Susan's Treasures is $25,000 for the current year. The owner withdrew $3,000
per month for personal living expenses. The owner's Capital account will show a net... -
ANS Decrease of $11,000
2 Copyright ©2025 FYNDLAY ALL RIGHTS RESERVED.
, Any additional investments by the owner should be shown as a(n): - ANS addition on the
Statement of Owner's Equity
Dowdy Co. has equipment with a cost of $30,000 and accumulated depreciation of $22,000.
What is the book value of the equipment? - ANS $8,000
The term, accrued wages, means that: - ANS expenses have been incurred but not yet been
recorded
T/F: Expenses are shown as credits. - ANS False. Expenses are shown as debits
Graves Company bought supplies on credit, $1800. What are the effects on the fundamental
accounting equation? - ANS Assets increase $1800; Liabilities increase $1800; Owner's Equity
is not effected.
The expanded accounting equation is - ANS Assets = Liabilities + Capital - Drawing + Revenue
- Expenses
T/F: The income statement is reported as a period of time. - ANS True
What would the journal entry for the withdrawal of cash for personal use by D. Bill, the owner
of a business look like? - ANS Debit D. Bill, Drawing and credit Cash
Net income results when: - ANS total revenue exceeds total expenses over the period
Assume a company has a net income that exceeds the owner's drawing for the current year.
The owner's Capital account: - ANS Will Incease
Which of the following accounts will have a remaining balance after the closing process is
completed?
3 Copyright ©2025 FYNDLAY ALL RIGHTS RESERVED.
2025 QUESTIONS AND ANSWERS
What is the fundamental accounting equation? - ANS Assets = Liabilities + Owners Equity
Amounts owned by a business are referred to as... - ANS Liabilities
Which of the following is not considered an account?
a. Accounts Receivable
b. Revenues
c. Accounts Payable
d. Cash
e. Equipment - ANS b. Revenues
A business received $600 cash from Charge Customers to apply on account. The effect of the
transaction is an increase in assets (A/R) and a... - ANS decrease in an asset (cash)
When a T account has several items on both sides, the balance of the account is written... -
ANS on the side with the larger total
Which of the following accounts decrease when they are debited?
a. Drawing & Capital
b. Liabilities & Expenses
1 Copyright ©2025 FYNDLAY ALL RIGHTS RESERVED.
,c. Assets and Drawing
d. Capital and Liabilities
e. Expenses and Assets - ANS d. Capital and Liabilities
The process of subtotaling both sides of an account and recording the amount on that side is
known as... - ANS Footing
The first step in the posting process is recording the... - ANS date in the ledger account
The proof that the debits and credits in the ledger are equal is called the... - ANS Trial
Balance
Apple Company purchased $6000 in equipment, paying $2000 in cash and placing the
remainder on an account. The journal entry would look like this: - ANS Equipment $6000
Accounts Payable $4000
Cash $2000
The ___________ requires that assets be recorded at the actual cost. - ANS Cost Principle
The _______ is a book or file containing the activity by accounts of a business. - ANS General
Ledger
Accountants refer to the wages earned by employees but not paid to them at the end of an
accounting period as: - ANS Accrued wages
If the cost of a piece of equipment is $15000 and accumulated depreciation amounts to $5000,
the book value of the equipment is: - ANS $10,000
Net income for Susan's Treasures is $25,000 for the current year. The owner withdrew $3,000
per month for personal living expenses. The owner's Capital account will show a net... -
ANS Decrease of $11,000
2 Copyright ©2025 FYNDLAY ALL RIGHTS RESERVED.
, Any additional investments by the owner should be shown as a(n): - ANS addition on the
Statement of Owner's Equity
Dowdy Co. has equipment with a cost of $30,000 and accumulated depreciation of $22,000.
What is the book value of the equipment? - ANS $8,000
The term, accrued wages, means that: - ANS expenses have been incurred but not yet been
recorded
T/F: Expenses are shown as credits. - ANS False. Expenses are shown as debits
Graves Company bought supplies on credit, $1800. What are the effects on the fundamental
accounting equation? - ANS Assets increase $1800; Liabilities increase $1800; Owner's Equity
is not effected.
The expanded accounting equation is - ANS Assets = Liabilities + Capital - Drawing + Revenue
- Expenses
T/F: The income statement is reported as a period of time. - ANS True
What would the journal entry for the withdrawal of cash for personal use by D. Bill, the owner
of a business look like? - ANS Debit D. Bill, Drawing and credit Cash
Net income results when: - ANS total revenue exceeds total expenses over the period
Assume a company has a net income that exceeds the owner's drawing for the current year.
The owner's Capital account: - ANS Will Incease
Which of the following accounts will have a remaining balance after the closing process is
completed?
3 Copyright ©2025 FYNDLAY ALL RIGHTS RESERVED.
