Accounting Review Quiz For Final Project

1. Did GeorgeCo have a net income or loss in May?

Net Income

Net Loss

GeorgeCo had a net income in May.

Explanation

GeorgeCo had a net income in May.

2.

Determining the debit and credit parts of each transaction is called

Working the transaction

Breaking down the transaction

Analyzing the transaction

Guessing

Analyzing the transaction refers to the process of determining the debit and credit parts of each transaction. This involves carefully examining the details of the transaction and identifying which accounts are affected and how they are affected. By analyzing the transaction, one can accurately record the appropriate debits and credits in the accounting system, ensuring the accuracy of the financial records.

Explanation

Analyzing the transaction refers to the process of determining the debit and credit parts of each transaction. This involves carefully examining the details of the transaction and identifying which accounts are affected and how they are affected. By analyzing the transaction, one can accurately record the appropriate debits and credits in the accounting system, ensuring the accuracy of the financial records.

3.

The balance sheet reports the balances

In asset, liability and owner`s equity accounts

In revenues and expenses

In assets and liabilities

Revenues and owner's equity

The balance sheet is a financial statement that provides a snapshot of a company's financial position at a specific point in time. It reports the balances in asset, liability, and owner's equity accounts. This means that it shows the values of the company's assets (such as cash, inventory, and property), liabilities (such as loans and accounts payable), and owner's equity (such as retained earnings and contributed capital). By reporting these balances, the balance sheet helps stakeholders understand the financial health and stability of the company.

Explanation

The balance sheet is a financial statement that provides a snapshot of a company's financial position at a specific point in time. It reports the balances in asset, liability, and owner's equity accounts. This means that it shows the values of the company's assets (such as cash, inventory, and property), liabilities (such as loans and accounts payable), and owner's equity (such as retained earnings and contributed capital). By reporting these balances, the balance sheet helps stakeholders understand the financial health and stability of the company.

4.

The basic accounting equation is

Assets + Revenue = Profit

Assets + Liabilities = Owner's Equity

Revenue + Assets + Owner`s Equity

Assets = Liabilities + Owner's Equity

The correct answer is Assets = Liabilities + Owner's Equity. This equation represents the fundamental principle of accounting, stating that the total value of a company's assets is equal to the sum of its liabilities and owner's equity. Assets are the resources owned by the company, liabilities are the debts or obligations of the company, and owner's equity represents the owner's investment in the business. This equation provides a snapshot of the financial position of a company at a given point in time.

Explanation

The correct answer is Assets = Liabilities + Owner's Equity. This equation represents the fundamental principle of accounting, stating that the total value of a company's assets is equal to the sum of its liabilities and owner's equity. Assets are the resources owned by the company, liabilities are the debts or obligations of the company, and owner's equity represents the owner's investment in the business. This equation provides a snapshot of the financial position of a company at a given point in time.

5.

The information needed to prepare the income statement comes from

The general ledger

The trial balance

The balance sheet

The journal

The income statement is prepared using information from the trial balance. The trial balance is a summary of all the accounts in the general ledger, which includes the balances of all the revenue and expense accounts. By using the trial balance, the accountant can determine the net income or loss for a specific period of time and present it in the income statement. The balance sheet, on the other hand, provides information about the company's assets, liabilities, and equity at a specific point in time, and the journal is used to record individual transactions.

Explanation

The income statement is prepared using information from the trial balance. The trial balance is a summary of all the accounts in the general ledger, which includes the balances of all the revenue and expense accounts. By using the trial balance, the accountant can determine the net income or loss for a specific period of time and present it in the income statement. The balance sheet, on the other hand, provides information about the company's assets, liabilities, and equity at a specific point in time, and the journal is used to record individual transactions.