Financial Accouting Midterm Practice Part 2Questons 1-36 from Quiz 3
Assets = Liabilities + Common Stock - Revenues - Expenses + Dividends
Assets - Liabilities - Common Stock = Revenues - Expenses - Dividends
Assets - Liabilities = Revenues - Exports - Dividends
Assets - Liabilities = Revenues - Expenses + Dividends
A $500 payment on accounts payable is debited to Accounts Payable for $50 and credited to Cash for $50
A $350 payment of rent is debited to Rent Expense for $350 and credited to Cash for $35
A transaction is not posted at all
A journal entry is posted twice
Decrease to the expense account
Increase to the expense account
Increase in retained earnings
Decrease to the revenue account
The current ratio is considered to be a more conservative measure of a company's liquidity
The quick ratio is considered to be a more conservative measure of a company's liquidity
The current ratio is considered to be a more accurate measure of a company's liquidity
The quick ratio also measures profitability
Increase side
Decrease side
Credit side
Debit side
Trial balance
Explanation
Debit entry
Credit entry
Are declared an asset
Reduce liabilities
Result in a decrease in equity, so debiting Dividends would have the effect of decreasing Owner's Equity
Are an expense
Cash $4,000 Note Payable $4,000 Equipment $8,000
Equipment $8,000 Cash $4,000 Accounts Payable $4,000
Equipment $8,000 Cash $4,000 Note Payable $4,000
Equipment $8,000 Cash $8,000
The Internal Revenue Service
The Securities and Exchange Commission
Source documents
The Board of Directors
Supplies
Dividends
Accounts Payable
Service Revenue
Posting - journalize - analyze - trial balance
Journalize - analyze - posting - closing
Journalize - posting - analyze - closing
Analyze - journalize - posting - trial balance
Assets Expenses Liabilities Revenues Equity Dividends
Assets Liabilities Equity Dividends Revenues Expenses
Assets Dividends Equity Expenses Liabilities Revenues
Assets Revenues Equity Liabilities Expenses Dividends
Help identify which accounts need to be closed
Verify that accounts with debit balances equal accounts with credit balances
Verify all of the accounts that will be used in the financial statements
Ensure there are no errors in the accounting records
The transaction was a bad business decision for the company
The company owes a tax liability
The transaction was posted to the wrong accounts
The income statement will show a net loss
Balancing
Journalizing
Analyzing
Posting
Decrease to the expense account
Increase to the expense account
Increase in retained earnings
Decrease to the revenue account
Accounts Payable
Unearned Revenue
Supplies Expense
Accounts Receivable
A credit balance
Always the same as the normal balance of the equity accounts
A debit balance
Dependent upon the financial condition of the entity
Accounts Receivable XXX Revenue XXX
Revenue XXX Accounts Receivable XXX
Accounts Receivable XXX Cash XXX
Cash XXX Accounts Receivable XXX
(Current Assets - Inventory) / Current Liabilities
Net Income / Net Sales
Current Inventory / Current Liabilities
Current Assets / Current Liabilities
$7,641
$10,651
$7,404
$6,291
Credit
T-account posting
Debit
Journal entry
Assets will increase
Liabilities will increase
Owner's equity will decrease
Assets will decrease
Short-term profits
Ability to cover its long-term obligations
Ability to meet its short-term debts with its most liquid assets
Ability to meet all of its short-term obligations
Cash XXX Salaries Expense XXX
Accounts Payable XXX Cash XXX
Wages Expense XXX Cash XXX
Cash XXX Salaries Payable XXX
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