ACC 131 WEEK 1 QUESTIONS ANSWERED CORRECTLY LATEST UPDATE 2026
Accounting represents a specific type of - Answers information system an organization has
The type of information system represented in accounting has three steps. Name the steps. -
Answers Gathering business transactions, process the business transaction, and produce a financial
statement
Explain the first step of gathering business transactions in accounting - Answers this is an
independent exchange between parties (such as buyer & seller)
Explain the second step of processing business transactions in accounting - Answers This is record
keeping in accounting.
Elaborate on the acronym IMRS for the second step of processing business transactions in accounting
- Answers Identify business transactions, Measure, Record, and Summarize
Explain the third step of producing a financial statement in accounting - Answers this is a summary of
the periods transactions and represents the financial picture of the business
Who is the recipient of a financial statement? - Answers The interested parties
What do interested parties use their financial statement for? - Answers To make decisions
Explain who the interested party is - Answers the users - such as investors, creditors, IRS, and labor
unions
List the 6 elements found in the three main financial statements - Answers revenue, expenses, assets,
liabilities, stockholder's equity, and dividends
What financial statement has the elements of revenue and expenses? - Answers The Income
Statement
What financial statement has the elements of assets and liabilities? - Answers Balance sheets
What financial statement has the element of dividends? - Answers Statement of Retained Earnings
A financial statement is a report that - Answers communicates a businesses financial picture in dollar
terms
Explain the element revenue - Answers represents amounts/resources produced from providing
goods & services
Give three examples of revenue - Answers sales, service, and rental revenue
Explain the element expense - Answers represent amounts/resources used up to generate revenue
Give three examples of expenses - Answers wage expense, utility expense, and cost of goods sold
Explain the element asset - Answers represent economic resources that are used to generate
revenue
Give three examples of assets - Answers cash, inventory, and equipment
Explain the element of liability - Answers represent debts/borrowings we take on to obtain resources
Give three examples of liability - Answers accounts payable, notes payable, and wages payable
What is the element of Stockholder's Equity? - Answers Represents the owners investments in the
company in exchange for ownership
What is one part of Stockholder's Equity? - Answers Common stock (cash for shares)
What is the second part of Stockholder's Equity? - Answers Company performance overtime
(Retained Earnings)
Explain the element dividends - Answers represents returns/payments to the owner on their
investments
What is the goal with the 3 financial statements and the 6 elements? - Answers To keep track of
specific accounts & balances that make up the elements of the financial statements
What does the T-account tells us? - Answers The T-account used debit and credit to tell us the
locations in the account and where to record the amounts of the transactions
What is on the right side of a T-account? - Answers credits
What is on the left side of a T-account? - Answers Debits
When applying debits and credits in the T-account, expenses account are _____ by recording debits
and ____ by recording credits - Answers increased; decreased
When applying debits and credits in the T-account, assets account are _____ by recording debits and
____ by recording credits - Answers increased; decreased
When applying debits and credits in the T-account, liabilities account are _____ by recording debits
and ____ by recording credits - Answers decreased, increased
When applying debits and credits in the T-account, stockholder's equity account are _____ by
recording debits and ____ by recording credits - Answers decreased, increased
Accounting represents a specific type of - Answers information system an organization has
The type of information system represented in accounting has three steps. Name the steps. -
Answers Gathering business transactions, process the business transaction, and produce a financial
statement
Explain the first step of gathering business transactions in accounting - Answers this is an
independent exchange between parties (such as buyer & seller)
Explain the second step of processing business transactions in accounting - Answers This is record
keeping in accounting.
Elaborate on the acronym IMRS for the second step of processing business transactions in accounting
- Answers Identify business transactions, Measure, Record, and Summarize
Explain the third step of producing a financial statement in accounting - Answers this is a summary of
the periods transactions and represents the financial picture of the business
Who is the recipient of a financial statement? - Answers The interested parties
What do interested parties use their financial statement for? - Answers To make decisions
Explain who the interested party is - Answers the users - such as investors, creditors, IRS, and labor
unions
List the 6 elements found in the three main financial statements - Answers revenue, expenses, assets,
liabilities, stockholder's equity, and dividends
What financial statement has the elements of revenue and expenses? - Answers The Income
Statement
What financial statement has the elements of assets and liabilities? - Answers Balance sheets
What financial statement has the element of dividends? - Answers Statement of Retained Earnings
A financial statement is a report that - Answers communicates a businesses financial picture in dollar
terms
Explain the element revenue - Answers represents amounts/resources produced from providing
goods & services
Give three examples of revenue - Answers sales, service, and rental revenue
Explain the element expense - Answers represent amounts/resources used up to generate revenue
Give three examples of expenses - Answers wage expense, utility expense, and cost of goods sold
Explain the element asset - Answers represent economic resources that are used to generate
revenue
Give three examples of assets - Answers cash, inventory, and equipment
Explain the element of liability - Answers represent debts/borrowings we take on to obtain resources
Give three examples of liability - Answers accounts payable, notes payable, and wages payable
What is the element of Stockholder's Equity? - Answers Represents the owners investments in the
company in exchange for ownership
What is one part of Stockholder's Equity? - Answers Common stock (cash for shares)
What is the second part of Stockholder's Equity? - Answers Company performance overtime
(Retained Earnings)
Explain the element dividends - Answers represents returns/payments to the owner on their
investments
What is the goal with the 3 financial statements and the 6 elements? - Answers To keep track of
specific accounts & balances that make up the elements of the financial statements
What does the T-account tells us? - Answers The T-account used debit and credit to tell us the
locations in the account and where to record the amounts of the transactions
What is on the right side of a T-account? - Answers credits
What is on the left side of a T-account? - Answers Debits
When applying debits and credits in the T-account, expenses account are _____ by recording debits
and ____ by recording credits - Answers increased; decreased
When applying debits and credits in the T-account, assets account are _____ by recording debits and
____ by recording credits - Answers increased; decreased
When applying debits and credits in the T-account, liabilities account are _____ by recording debits
and ____ by recording credits - Answers decreased, increased
When applying debits and credits in the T-account, stockholder's equity account are _____ by
recording debits and ____ by recording credits - Answers decreased, increased
