ACCOUNTING 101 ACTUAL 2026 EXAM QUESTIONS AND
SOLUTIONS RATED A+
✔✔Liabilties Short Term - ✔✔Morgages, Bank loans,
✔✔Liabilities Long Term - ✔✔Payroll
✔✔Stockholders Equity , Owners Equity - ✔✔Is what you own, is made up of Capital,
Retainied earnings=Income expenses. (income increases expenses decrease)
✔✔Account - ✔✔An accounting form that is used to record the increases and
decreases in each financial statement.
✔✔Debits - ✔✔Assets, Expenses, Dividends. Money coming in is Debit
✔✔Credits - ✔✔Liabilities, Equity, Revenues. Money going out is Credit
✔✔Current Assets - ✔✔Cash, A/C Rec. Inventory, Prepaid Expenses. Supplies, Notes
Rec.
✔✔Chart of Accounts - ✔✔A listing of all of the accounts and subaccounts in the
general ledger. It must be defined ahead of time for each business.
✔✔Ledger - ✔✔A group of accounts for a business entity
✔✔Balance Sheet - ✔✔A financial statement that summarizes a company's assets,
liabilities and shareholders' equity at a specific point in time. These three balance sheet
segments give investors an idea as to what the company owns and owes, as well as the
amount invested by the shareholders.
✔✔Income Statement - ✔✔a summary of income and expenses during a specific period
of time; also known as profit and loss statement.
✔✔Income Summary - ✔✔Temporary account used only in the closing process to which
the balances of revenue and expense accounts (including any gains or losses) are
transferred; its balance is transferred to the capital account (or retained earnings for a
corporation).
✔✔Trail Balance - ✔✔A two column listing of all ledger accounts and their bal. If debits
equal credits the trail balance is in bal.
✔✔Adjusting Process - ✔✔An analysis and updating of the accounts when financial
statements are prepared.
SOLUTIONS RATED A+
✔✔Liabilties Short Term - ✔✔Morgages, Bank loans,
✔✔Liabilities Long Term - ✔✔Payroll
✔✔Stockholders Equity , Owners Equity - ✔✔Is what you own, is made up of Capital,
Retainied earnings=Income expenses. (income increases expenses decrease)
✔✔Account - ✔✔An accounting form that is used to record the increases and
decreases in each financial statement.
✔✔Debits - ✔✔Assets, Expenses, Dividends. Money coming in is Debit
✔✔Credits - ✔✔Liabilities, Equity, Revenues. Money going out is Credit
✔✔Current Assets - ✔✔Cash, A/C Rec. Inventory, Prepaid Expenses. Supplies, Notes
Rec.
✔✔Chart of Accounts - ✔✔A listing of all of the accounts and subaccounts in the
general ledger. It must be defined ahead of time for each business.
✔✔Ledger - ✔✔A group of accounts for a business entity
✔✔Balance Sheet - ✔✔A financial statement that summarizes a company's assets,
liabilities and shareholders' equity at a specific point in time. These three balance sheet
segments give investors an idea as to what the company owns and owes, as well as the
amount invested by the shareholders.
✔✔Income Statement - ✔✔a summary of income and expenses during a specific period
of time; also known as profit and loss statement.
✔✔Income Summary - ✔✔Temporary account used only in the closing process to which
the balances of revenue and expense accounts (including any gains or losses) are
transferred; its balance is transferred to the capital account (or retained earnings for a
corporation).
✔✔Trail Balance - ✔✔A two column listing of all ledger accounts and their bal. If debits
equal credits the trail balance is in bal.
✔✔Adjusting Process - ✔✔An analysis and updating of the accounts when financial
statements are prepared.
