AAMI Accounting 1 Final Review
Account receivables are: - correct answer -Assets
Cash is considered to be: - correct answer -Asset
Which of the following is an example of a liability: - correct answer -Accounts Payable True or False - The expanded accounting equation is: Assets = Liabilities + Owner's Equity - correct answer -False
Gross profit minus expenses equals: - correct answer -Net Profit
Which of the following is not factored into computing Owner's Equity in the expanded Accounting equation: - correct answer -Owner's Equity = [Capital In - Withdrawals] + [Revenue - Expenses] Revenue after deducting costs of goods sold is called: - correct answer -Gross Profit John Smith gives his business $10,000.00 from his own personal funds. Which of the following accounts does this transaction affect? - correct answer -Capital True or False - The basic accounting equation is: Assets = Liabilities + Owner's Equity - correct answer - True A firm has $15,000.00 in liabilities and $22,500.00 in assets. In order to compute the Basic Accounting Equation, what must Owner's Equity be? - correct answer -$7,500 Another name for ownership is: - correct answer -Equity 1 / 2
John Smith takes $5,000.00 back from his business to repay himself some of the money he loaned to his
business. Which account would be affected: - correct answer -Withdrawals
The costs of doing business are termed: - correct answer -Liabilities
True or False - Net Loss is defined as the amount remaining when revenue exceeds expenses. - correct answer -False, that is net profit True or False - Expenses increase owner's equity. - correct answer -False Which account below should NOT have a credit balance? - correct answer -Expenses From the following select the group whose accounts should have a Credit balance associated with them:
- correct answer -liabilities, revenue and capital
- / 2
True or False - The abbreviation for debit is DT. - correct answer -False The Revenue Account should have a _______ account balance. - correct answer -Credit The term given to recording an entry when one debit and one credit are affected is called: - correct answer -Double entry This statement proves the equality of debits to credits: - correct answer -Trial Balance Which of the following is an account payable: - correct answer -Mortgage Payable Assets = Liabilities + Owner's Equity is: - correct answer -Basic Accounting Equation This account should have a Debit balance associated with it: - correct answer -Expenses