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Accounting 101 Exam CH 1-4 with complete solutions 2024_2025
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Accounting 101 Exam CH 1-4 with complete solutions 2024_2025
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Accounting 101 Exam CH 1-4 withcomplete solutions 2024/2025
Accounting Equation - ANSWER-Assets= Liabilities + stockholder's equity
Assets - ANSWER-Resources owned by company
Liabilities - ANSWER-Rights of the creditors or amounts owed to creditors
Equity - ANSWER-Rights of the owner
AED - ANSWER-Assets, Expenses, Dividends = Normal debit balance and
increase on the debit side
LER - ANSWER-Liabilities, Equity, Revenue = Normal credit balances and
increase on the credit side
Assets examples - ANSWER-Accounts receivable, Cash, Supplies, Inventory,
Prepaids
Liabilities examples - ANSWER-Accounts payable, Wages Payable, Salaries
Payable, Unearned Revenue, Unearned rent,
Equity Examples - ANSWER-Retained earnings
Capital/Common stock
Revenue Examples - ANSWER-Rent Revenue, Sales, Fees earned
, Expenses Examples - ANSWER-Wages Expense, Salaries Expense, Supplies
Expense, Utilities Expense, Misc. Expense
Balance Sheet - ANSWER-Assets, Liabilities and Equity
Income statement - ANSWER-Revenue and expenses
Rotten Eggs IS Disgusting.... REally - ANSWER-Revenue and expenses closed to
income summary,
Income summary and dividends closed to retained earnings
*** Balance sheet accounts are NOT closed
Accounting Cycle - ANSWER-Journal> Legder> Trial balance (unadjusted) >
journal > Legder > Trial balance (Adjusted) > Financial statements > Journal >
Ledger >Post-closing trial balance
Omitting adjusting entries - ANSWER-Omitting expenses- Net income overstated
Omitting revenues- Net income understated
5 Types of Adjusting Entries - ANSWER-Prepaids
Accrued Expenses
Accrued Revenues
Unearned Fees
Depreciation
Prepaid Adjusting Entry - ANSWER-Debit: Prepaid expense
Credit: Pre-paid account
ex: Pre-paid insurance expense 500
Pre-paid insurance 500
Depreciation Adjusting Entry - ANSWER-Debit: Depreciation Expense
Credit: Accumulated Depreciation- ( fixed asset)
Unearned Revenue - ANSWER-*** turning unearned into earned revenue
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