ACCOUNTING 101 COPREHENSIVE EXAM UPDATED
QUESTIONS AND SOLUTIONS RATED A+
✔✔Accounts Receivable - ✔✔An account used to record the amounts due from (legal
claims against) charge customers. (p.27)
✔✔Backups - ✔✔Procedures that store company data files in a a safe place, such as
online or on a flash drive. (p. 34)
✔✔Cloud computing - ✔✔Software that is used via the Internet instead of from a local
computer. Software and data can be accessed anywhere there is an Internet
connection. (p. 34)
✔✔Computerized accounting - ✔✔An accounting system that records transactions
using a computer and accounting software such as QuickBooks. (p. 33)
✔✔Double-entry accounting - ✔✔The system by which each business transaction is
recorded in at least two accounts and the accounting equation is kept in balance. (p.17)
✔✔Equity - ✔✔The value of a right or claim to or financial interest in an asset or group
of assets. (p. 13)
✔✔Fair market value - ✔✔The present worth of an asset or the amount that would be
received if the asset were sold to an outsider on the open market. (p. 19)
✔✔Fundamental accounting equation - ✔✔(Assets=Liabilities+Owner's Equity) An
equation expressing the relationship of assets, liabilities, and owner's equity. (p. 14)
✔✔Manual accounting system - ✔✔An accounting system in which transactions are
recorded by hand. (p. 33)
✔✔Separate entity concept - ✔✔The concept by which a business is treated as a
separate economic or accounting entity. The business stands by itself, separate from its
owners, creditors, and customers. (p. 16)
✔✔Sole proprietorship - ✔✔A one-owner business. (p. 16)
✔✔Withdrawal (This is also referred to as drawing and is treated as a decrease in
owner's equity). (p.30) - ✔✔The taking of cash or other assets out of a business by the
owner for his or her own use.
✔✔A QuickBooks file with the extension (.QBB) is what type of file? - ✔✔a backup file
✔✔.QBW - ✔✔A file extension indicating a QuickBooks working file
,✔✔Purchasing supplies on credit has what impact on the accounting equation? -
✔✔Increase Supplies and increase Accounts Payable
✔✔Balance sheet - ✔✔A financial statement showing the financial position of an
organization on a given date, such as June 30 or December 31. This statement lists the
balances in the asset, liability, and owner's equity accounts. (p. 78)
✔✔Compound entry - ✔✔A transaction that requires more than one debit or more than
one credit to be recorded. (p. 71)
✔✔Credit - ✔✔The right side of a T account; to credit is to record an amount on the
right side of a T account. Credits represent increases in liability, capital, or revenue
accounts and decreases in asset, drawing, or expense accounts. (p. 62)
✔✔Debit - ✔✔The left side of a T account; to debit is to record an amount on the left
side of a T account. Debits represent increases in asset, drawing, or expense accounts
and decreases in liability, capital, or revenue accounts. (p. 62)
✔✔Financial position - ✔✔The resources or assets owned by an organization at a point
in time, offset by the claims against those resources and owner's equity; shown on a
balance sheet. (p. 78)
✔✔Financial statement - ✔✔A report prepared by accountants that summarizes the
financial affairs of a business. (p. 76)
✔✔Footings - ✔✔The totals of each side of a T account. (p. 60)
✔✔Income statement - ✔✔A financial statement showing the results of business
transactions involving revenue and expense accounts over a period of time. (p. 76)
✔✔Net income - ✔✔The result when total revenue exceeds total expenses over a
period of time. (p. 76)
✔✔Net loss - ✔✔The result when total expenses exceed total revenue over a period of
time. (p. 76)
✔✔Normal balance - ✔✔The plus side of a T account. (p. 60)
✔✔PDF (portable document format) - ✔✔An electronic file format that converts a
printed document into an electronic image. (p. 85)
✔✔Profit and loss statement - ✔✔Another term for an income statement. (p. 83)
, ✔✔Report form - ✔✔The form of the balance sheet in which assets are placed at the
top and liabilities and owner's equity are placed below. (p. 78)
✔✔Slide - ✔✔An error in placing the decimal point in a number. (p. 80)
✔✔Statement of Owner's Equity - ✔✔A financial statement showing the activity in the
Owner's equity, or Capital account, over the financial period. (p. 77)
✔✔T Account form - ✔✔A form of account shaped like the letter T in which increases
and decreases in the account may be recorded. One side of the T is for entries on the
debit or left side. The other side of the T is for entries on the credit or right side. (p. 59)
✔✔Transposition - ✔✔An error that involves interchanging, or switching around, digits
during the recording of a number. (p. 80)
✔✔Trial balance - ✔✔A list of all account balances to prove that the total of all debit
balances equals the total of all credit balances. (p. 75)
✔✔Cost principle - ✔✔The principle that a purchased asset should be recorded at its
actual cost. (p. 115)
✔✔Cross-reference - ✔✔The ledger account number in the Post. Ref. column of the
journal and the journal page number in the Post. Ref. column of the ledger account.
(p.120)
✔✔General ledger - ✔✔A book or file containing the activity (by accounts), either
manual or computerized, of a business. (p. 118)
✔✔Journal - ✔✔The book in which a person makes the original record of a business
transaction; commonly referred to as a book of original entry. (p. 111)
✔✔Journalizing - ✔✔The process of recording a business transaction in a journal. (p.
111)
✔✔Ledger account - ✔✔A complete record of the transactions recorded in an individual
account. (p. 118)
✔✔Posting - ✔✔The process of transferring figures from the journal to the ledger
accounts. (p. 120)
✔✔Source documents - ✔✔Business papers, such as checks, invoices, receipts, letters,
and memos, that furnish proof that a transaction has taken place. (p. 111)
QUESTIONS AND SOLUTIONS RATED A+
✔✔Accounts Receivable - ✔✔An account used to record the amounts due from (legal
claims against) charge customers. (p.27)
✔✔Backups - ✔✔Procedures that store company data files in a a safe place, such as
online or on a flash drive. (p. 34)
✔✔Cloud computing - ✔✔Software that is used via the Internet instead of from a local
computer. Software and data can be accessed anywhere there is an Internet
connection. (p. 34)
✔✔Computerized accounting - ✔✔An accounting system that records transactions
using a computer and accounting software such as QuickBooks. (p. 33)
✔✔Double-entry accounting - ✔✔The system by which each business transaction is
recorded in at least two accounts and the accounting equation is kept in balance. (p.17)
✔✔Equity - ✔✔The value of a right or claim to or financial interest in an asset or group
of assets. (p. 13)
✔✔Fair market value - ✔✔The present worth of an asset or the amount that would be
received if the asset were sold to an outsider on the open market. (p. 19)
✔✔Fundamental accounting equation - ✔✔(Assets=Liabilities+Owner's Equity) An
equation expressing the relationship of assets, liabilities, and owner's equity. (p. 14)
✔✔Manual accounting system - ✔✔An accounting system in which transactions are
recorded by hand. (p. 33)
✔✔Separate entity concept - ✔✔The concept by which a business is treated as a
separate economic or accounting entity. The business stands by itself, separate from its
owners, creditors, and customers. (p. 16)
✔✔Sole proprietorship - ✔✔A one-owner business. (p. 16)
✔✔Withdrawal (This is also referred to as drawing and is treated as a decrease in
owner's equity). (p.30) - ✔✔The taking of cash or other assets out of a business by the
owner for his or her own use.
✔✔A QuickBooks file with the extension (.QBB) is what type of file? - ✔✔a backup file
✔✔.QBW - ✔✔A file extension indicating a QuickBooks working file
,✔✔Purchasing supplies on credit has what impact on the accounting equation? -
✔✔Increase Supplies and increase Accounts Payable
✔✔Balance sheet - ✔✔A financial statement showing the financial position of an
organization on a given date, such as June 30 or December 31. This statement lists the
balances in the asset, liability, and owner's equity accounts. (p. 78)
✔✔Compound entry - ✔✔A transaction that requires more than one debit or more than
one credit to be recorded. (p. 71)
✔✔Credit - ✔✔The right side of a T account; to credit is to record an amount on the
right side of a T account. Credits represent increases in liability, capital, or revenue
accounts and decreases in asset, drawing, or expense accounts. (p. 62)
✔✔Debit - ✔✔The left side of a T account; to debit is to record an amount on the left
side of a T account. Debits represent increases in asset, drawing, or expense accounts
and decreases in liability, capital, or revenue accounts. (p. 62)
✔✔Financial position - ✔✔The resources or assets owned by an organization at a point
in time, offset by the claims against those resources and owner's equity; shown on a
balance sheet. (p. 78)
✔✔Financial statement - ✔✔A report prepared by accountants that summarizes the
financial affairs of a business. (p. 76)
✔✔Footings - ✔✔The totals of each side of a T account. (p. 60)
✔✔Income statement - ✔✔A financial statement showing the results of business
transactions involving revenue and expense accounts over a period of time. (p. 76)
✔✔Net income - ✔✔The result when total revenue exceeds total expenses over a
period of time. (p. 76)
✔✔Net loss - ✔✔The result when total expenses exceed total revenue over a period of
time. (p. 76)
✔✔Normal balance - ✔✔The plus side of a T account. (p. 60)
✔✔PDF (portable document format) - ✔✔An electronic file format that converts a
printed document into an electronic image. (p. 85)
✔✔Profit and loss statement - ✔✔Another term for an income statement. (p. 83)
, ✔✔Report form - ✔✔The form of the balance sheet in which assets are placed at the
top and liabilities and owner's equity are placed below. (p. 78)
✔✔Slide - ✔✔An error in placing the decimal point in a number. (p. 80)
✔✔Statement of Owner's Equity - ✔✔A financial statement showing the activity in the
Owner's equity, or Capital account, over the financial period. (p. 77)
✔✔T Account form - ✔✔A form of account shaped like the letter T in which increases
and decreases in the account may be recorded. One side of the T is for entries on the
debit or left side. The other side of the T is for entries on the credit or right side. (p. 59)
✔✔Transposition - ✔✔An error that involves interchanging, or switching around, digits
during the recording of a number. (p. 80)
✔✔Trial balance - ✔✔A list of all account balances to prove that the total of all debit
balances equals the total of all credit balances. (p. 75)
✔✔Cost principle - ✔✔The principle that a purchased asset should be recorded at its
actual cost. (p. 115)
✔✔Cross-reference - ✔✔The ledger account number in the Post. Ref. column of the
journal and the journal page number in the Post. Ref. column of the ledger account.
(p.120)
✔✔General ledger - ✔✔A book or file containing the activity (by accounts), either
manual or computerized, of a business. (p. 118)
✔✔Journal - ✔✔The book in which a person makes the original record of a business
transaction; commonly referred to as a book of original entry. (p. 111)
✔✔Journalizing - ✔✔The process of recording a business transaction in a journal. (p.
111)
✔✔Ledger account - ✔✔A complete record of the transactions recorded in an individual
account. (p. 118)
✔✔Posting - ✔✔The process of transferring figures from the journal to the ledger
accounts. (p. 120)
✔✔Source documents - ✔✔Business papers, such as checks, invoices, receipts, letters,
and memos, that furnish proof that a transaction has taken place. (p. 111)
