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ACCT 2013 Test -1 - UARK Fowler Questions with correct Answers
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ACCT 2013 Test -1 - UARK Fowler
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ACCT 2013 Test #1 - UARK FowlerThe Accounting Equation - answer Assets = Liabilities + Stockholders' Equity (S.H.E)
Net Income Equation - answer Revenues - Expenses = Net Income
Assets (resources) - answer The total resources of a company
-cash
-accounts receivable
-supplies
-equipment
-inventory
-land
-buildings
-prepaid rent
Liabilities (creditors' claims) - answer Amounts owed to creditors.
Basically anything "PAYABLE"
-accounts payable
-salaries payable
-utilities payable
-interest payable
-notes payable
-bonds payable
-deferred revenue
-Unearned revenue
Stockholders' Equity (owners' claims) - answerRepresents the owners' claims to
resources.
-common stock
-retained earnings
-dividends
Revenues - answerSales of products or services to customers
Expenses - answerCosts of selling products or services
Accumulated Depreciation - answerA contra asset account.
, Increases with credit, decreases with debit
Net Income - answerThe difference between revenues & expenses.
Net Loss - answerExpenses > revenues
Dividends - answerThe distribution of cash payments to stockholders.
(when you return/send $ to the owners)
DIVIDENDS ARE NOT EXPENSES!
Common Stock - answerAmounts invested by stockholders.
Retained Earnings - answerIts balance represents all net income - all dividends ~~over
the life of the company~~.
Sole Proprietorship - answerA business owned by one person
Partnership - answerA business owned by two or more people
Corporation - answerA business is legally seperate from its owners.
Income Statement Equation - answerRevenues - Expenses = Net Income
Statement of Stockholders' Equity Equation - answerCommon Stock + Retained
Earnings = Stockholders' Equity
(Beginning revenue + net income - dividends)
2 Primary Functions of Financial Accounting - answer1) Measure business activities of a
company.
2) Communicate those measures to external parties for the decision making process.
Accounting Definition - answerThe information system that identifies, records, and
communicates the economic events of an organization to interested users.
Which of the following accounts would be closed (made to have a zero balance) at year-
end?
a) Deferred Revenue
b) Prepaid Rent
c) Salaries Expense - answerc) Salaries Expense
Remember: RED is DEAD
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