College Accounting Test Questions
and Correct Answers.
Account - Answer A separate record used to summarize changes in each asset, liability, and
owner's equity of a business
Account title - Answer Provides a description of the particular type of asset, liability, owner's
equity, revenue, or expense.
Accounting equation - Answer Assets = Liabilities + Equity
Accounting period concept - Answer The concept that income determination can be made
on a periodic basis
Accounts payable - Answer sum owed by a business for services or goods received
Accounts receivable - Answer The total amount of money owed to a business.
Asset - Answer An item owned by a business and will provide future benefits
Balance sheet - Answer Financial Statement that lists types and dollar amounts of assets,
liabilities, and equity at a specific date.
Business entity - Answer An individual, association, or organization that engages in economic
activities and controls specific economic resources.
Business entity concept - Answer The concept that nonbusiness assets and liabilities are not
included in the business entity's accounting records
Business transaction - Answer An economic event that has a direct impact on the business
Capital - Answer another name for owner's equity, the amount by which the business assets
exceed the business liabilities.
Drawing - Answer withdrawls that reduce owner's equity as a result of the owner taking cash
or other assets out of the bussiness for personal use
and Correct Answers.
Account - Answer A separate record used to summarize changes in each asset, liability, and
owner's equity of a business
Account title - Answer Provides a description of the particular type of asset, liability, owner's
equity, revenue, or expense.
Accounting equation - Answer Assets = Liabilities + Equity
Accounting period concept - Answer The concept that income determination can be made
on a periodic basis
Accounts payable - Answer sum owed by a business for services or goods received
Accounts receivable - Answer The total amount of money owed to a business.
Asset - Answer An item owned by a business and will provide future benefits
Balance sheet - Answer Financial Statement that lists types and dollar amounts of assets,
liabilities, and equity at a specific date.
Business entity - Answer An individual, association, or organization that engages in economic
activities and controls specific economic resources.
Business entity concept - Answer The concept that nonbusiness assets and liabilities are not
included in the business entity's accounting records
Business transaction - Answer An economic event that has a direct impact on the business
Capital - Answer another name for owner's equity, the amount by which the business assets
exceed the business liabilities.
Drawing - Answer withdrawls that reduce owner's equity as a result of the owner taking cash
or other assets out of the bussiness for personal use
