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FINANCIAL ACCOUNTING FINAL EXAM (IVY TECH) QUESTIONS AND ANSWERS WITH SOLUTIONS 2024
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FINANCIAL ACCOUNTING FINAL EXAM (IVY TECH) QUESTIONS AND ANSWERS WITH SOLUTIONS 2024
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FINANCIAL ACCOUNTING FINAL EXAM(IVY TECH) QUESTIONS AND ANSWERS
WITH SOLUTIONS 2024
Revenues - ANSWER Gross increase in equity from a company's business activities that earn income; also
called sales.
Expenses - ANSWER Outflows or using up of assets as part of operations of a business to generate sales.
Accounts Receivable - ANSWER Amounts to be received in the future due to the sale of goods or services
Accounting Equation - ANSWER Assets = Liabilities + Equity
Income Statement - ANSWER describes a company's revenues and expenses along with the resulting net
income or loss over a period of time due to earnings activities
Accounts on Income Statement - ANSWER Revenues - Expenses
Balance Sheet - ANSWER Financial statement that lists types and dollar amounts of assets, liabilities, and
equity at a specific date.
Accounts on balance sheet - ANSWER assets, liabilities, equity
Primary Objective of Financial Reporting - ANSWER to provide information that is useful to investors and
creditors for decision making
Expanded Accounting Equation - ANSWER Assets = Liabilities + Common Stock + Revenues - Expenses -
Dividends
FASB (Financial Accounting Standards Board) - ANSWER sets accounting standards (GAAP) in the U.S.
, T account - ANSWER debit left, credit right
Normal Balance of Expenses - ANSWER Debit (decrease equity)
Normal balance of Revenues - ANSWER credit
Normal Balance of dividends - ANSWER Dr. (it decreases owner's equity)
normal balance of assets - ANSWER Debit Increases. Credit decreases. NB: Debit.
normal balance of liabilities - ANSWER credit increases, debit decreases NB:Credit
Journal - ANSWER Record in which transactions are entered before they are posted to ledger accounts;
also called book of original entry.
Journalizing - ANSWER Recording transactions in a journal
Trial Balance - ANSWER a list of accounts and their balances at a given time
Trial Balance Order of Accounts - ANSWER assets, liabilities, equity, dividends, revenue, expenses
journal entry: purchase of equipment - ANSWER debit equipment, credit cash
Accrual Basis Accounting - ANSWER reporting revenue when it is earned and expenses when they are
incurred (basis for GAAP)
salary expense adjustment - ANSWER debit salaries expense, credit salaries payable
revenues and expenses are closed to what account? - ANSWER income summary
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