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ACG Exam Review Questions and Answers
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ACG Exam Review Questions and Answers
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ACG Exam Review Questions and AnswersAccount - ANS-ummary of the effects of all transactions related to a particular item over
a period of time
Accounting Equation - ANS-equation that shows a company's resources (assets) equal
creditors' and owners'claims to those resources (liabilities and stockholders' equity)
Accounting Period - ANS-The specific time period (beginning to end) for which the
accounts are measured,aggregated, and at the end, financial statements are prepared.
Accounts Payable - ANS-Promise to pay cash in the future to creditors when purchasing
supplies ormaterials. (credit, liability, balance sheet)
Accounts Receivable - ANS-amounts the company expects to collect from customers
based on thedelivery of service or products. (debit, asset, balance sheet
Accrual-basis accounting - ANS-ecord revenue when we earn them and record
expenses with relatedexpenses, regardless of when cash is received or paid
Accumulated depreciation - ANS-cumulative amount of depreciation expensed against a
particularasset, such as a vehicle. (credit, contra asset, balance sheet
Adjusted Trial Balance - ANS-a list of all accounts and their balances after the
completion of adjusting entries,showing the total debits and credits.
Adjusting entries - ANS-to record events that have occurred but that have not been
recorded, such recordinginsurance expense at the end of the month from a prepaid
policy
Assets - ANS-resources owned by a company
Balance sheet - ANS-financial statement that presents the financial position of the
company on a particulardate
Book value - ANS-historical cost of an asset, such as equipment, less the accumulated
depreciation
Business Transaction - ANS-An economic event that initiates the accounting process of
recording it in thecompany's accounting system
Cash - ANS-liquid assets owned by the company. (debit, asset, balance sheet)
Cash basis accounting - ANS-ecord revenues at the time cash received and expenses
at the time cash is paid
, Chart of accounts - ANS-a list of all account names used to record transactions of a
company
Closing entries - ANS-entries that transfer balances of all temporary accounts
(revenues, expenses, anddividends) to the balance of the retained earnings account
Common Stock - ANS-Amount shareholders have invested in the business. (credit,
stockholders'Equity, balance sheet
Deferred revenue - ANS-cash in advance from a customer for products or services to be
provided inthe future. (credit, liability, balance sheet
Depreciation Expense - ANS-the process of allocating the cost of an asset, such as
equipment, toexpense over the useful life of the asset. (debit, expense, income
statement)
Dividend - ANS-cash payments to stockholders (owners). (debit, no major category,
stmt. ofstockholders' equity)
Expenses - ANS-the costs of providing products and services
expenses - ANS-the costs of providing products and services. (debit, expense, income
statement
Financial accounting - ANS-measure business activities of a company and
communication of thosemeasurements to external parties for decision-making purposes
financial Statements - ANS-periodic reports published by the company for the purpose
of providinginformation (communicate) to external users
General ledger - ANS-all accounts used to record the company's transactions
Generally accepted accounting principles (GAAP) - ANS-the rules of financial
accounting
Income statement - ANS-inancial statement that reports the company's revenues and
expenses over an intervalof time
Inventory - ANS-he cost of the merchandise purchased but not yet sold to customers.
(debit, asset,balance sheet
Journal - ANS-a chronological record of all transactions affecting a firm
Liabilities - ANS-amounts owed to creditors
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