ACC 131 Final Exam Questions with Correct Answers Latest Update

ACC 131 Final Exam Questions with Correct Answers Latest Update accounting equation - Answers assets = liabilities + stockholders' equity what financial statement is for a specific date - Answers balance sheet define current assets - Answers consist of cash and other assets that are reasonably expected to be converted into cash within one year or one operating cycle, whichever is longer examples of current assets - Answers cash, account receivables define current liability - Answers consist of obligations that will be satisfied, through the payment of cash or by providing goods or services, within one year or the operating cycle, whichever is longer examples of current liabilities - Answers accounts payable, salaries payable, unearned revenue, interest payable what is historical cost - Answers record the asset at the price it was purchased, record through the exchange price at what value is property, plant, and equipment reported on the balance sheet - Answers historical cost, "cost less accumulated depreciation or book value" what is a t-account - Answers the left side is referred to as the debit side and the right side is referred to as the credit side what is a journal - Answers a chronological record showing the debit and credit effects of transactions on a company what is a ledger - Answers a collection of all the individual financial statement accounts that a company uses, helps keep track of the balances of specific accounts define debit - Answers left side of T-account define credit - Answers right side of T-account know normal balances - Answers D E A | L E R what is revenue recognition principal - Answers determines when revenue is recorded, only when: 1. the revenue has been earned 2. the collection of cash is reasonably assured define accrued revenue - Answers earned revenue, but no cash has been received interest earned, but not yet received on a loan - Answers accrued revenue define accrued expenses - Answers unrecorded expenses that have been incurred, but no cash has been paid define deferred (unearned) revenue - Answers received cash but has yet to earn the revenue define deferred (prepaid) expenses - Answers acquire goods before they are used (recorded as assets) define credit memo - Answers result if the bank collected a note receivable for the business, item on company's bank statement that increases a company's checking account balance define debit memo - Answers item on bank statement that reduces the company's checking account balance define outstanding checks - Answers a check issued and recorded by the business that has not been "cashed" by the recipient of the check, cause the bank balance to be higher than the business's cash account balance