Accounting

Front 1

The graphics department asks for three new computers

Back 1

investing activity

Front 2

The company develops a science module for a school.

Back 2

Operating activity

Front 3

The marketing manager travels to an deucational trade show.

Back 3

Operating activity

Front 4

The owner deposits $ 10,000 to expand operations.

Back 4

Financing activity

Front 5

The company works with two freelance learning consultants.

Back 5

Operating activity

Front 6

The graphics department asks for three new computers.

Back 6

Investing activity

Front 7

The objectivity principle

Back 7

A company matches the invoice for equipment to the transaction.

Front 8

The continuing concern principle

Back 8

The company started in 1980 and will operate indefinitely.

Front 9

The cost principle

Back 9

The land is recorded at cost despite its higher value.

Front 10

The stable dollar principle

Back 10

Although the dollar fell assets are recorded at original cost

Front 11

The business entity principle

Back 11

A company does not accept a receipt for vacation expenses

Front 12

Transposition

Back 12

An amount may have been incorrectly copied.

Front 13

Transposition

Back 13

Check the accuracy of all the amounts again.

Front 14

Posting

Back 14

The difference is bouble the capital account amount.

Front 15

Calculation

Back 15

The debits and the credits must be added.

Front 16

Calculation

Back 16

There is a miscalculation

Front 17

Angela compares the sum of the debits and the sum of the credits. What does she discover ?

Back 17

The sms are equal, which means that all the accounts are balanced.

Front 18

A courier company receives $600 after billing a client for delivery services. How is this transaction recorded ?

Back 18

Cash account $600 debit

Accounts Receivable account $600 credit

Front 19

balance statement - liabilities

Back 19

The compnay owes $ 35,000 to its suppliers.

Front 20

balance statement - heading

Back 20

The company's fiscal year ends on March 31

Front 21

balance statement - owners equity

Back 21

Dales' capital account has a balance of $ 60,500

Front 22

balance statement - assets

Back 22

The company's fleet of trucks is valued at $ 125,000.

Front 23

balance statement - totals

Back 23

The statement is balanced at $ 1.4 million

Front 24

source document - employee earnings staement

Back 24

A document that shows the amount of profit sharing.

Front 25

balance statement - check

Back 25

The company issues a document to purchase software

Front 26

balance statement - sales slip

Back 26

The document helps to verify the cost of the purchases.

Front 27

balance statement - bank statement

Back 27

The document helps track the banking transactions

Front 28

balance statement - purchase order

Back 28

The document requests supplies for work area

Front 29

expense or revenue
An oit company has over 50 drillers on its payroll.

Back 29

expense

Front 30

expense or revenue
A consultant going to Ohio pays for his travel, meals, and hotel.

Back 30

Expense

Front 31

expense or revenue
A clothing store increases its cash by selling goods.

Back 31

Revenue

Front 32

expense or revenue
A private university collects tuition fees.

Back 32

Revenue

Front 33

expense or revenue
A hotel's utility bill increases in the summer months.

Back 33

Expense

Front 34

Advantages of applying accounting principles, rules, and procedures.

Back 34

Good accounting information that follows a standard format and is accurate and properly prepared helps stakeholders understand the data,which helps them make informed decisions.

Front 35

Advantages of applying accounting principles, rules, and procedures.

Back 35

A peoperly prpared financial statement communicates the profits to shareholders and employees.

Front 36

Advantages of applying accounting principles, rules, and procedures.

Back 36

A standard format for financial statements can be read by investors and banks.

Front 37

Advantages of applying accounting principles, rules, and procedures.

Back 37

An investor will be more apt to consider a compan whose financial statements disclose all activities.

Front 38

GAAP

Back 38

Generally accepted accounting principles

Front 39

sole proprietorship

Back 39

is a business that is owned by an individual. Proprietors typically use their own money to finance the business; therefore they are solely responsible for any depts and profits. Sole perprietorship is the most common legal form of business.

Front 40

Partnrship

Back 40

Partnership is a business that is owned by two or more persons. They have pooled their resources to finance the business therefore they share the profits and the responsibility of any debts.

Front 41

Corporation

Back 41

A corporatio is a seperate legal entity and is owned by stockholders. however stockholders are not responsible fot eh business's debts. An elected board of directors is responsible for managing the corpration.

Front 42

FASB

Back 42

The Financial Accounting Standards Board

Front 43

AICPA

Back 43

The American Institute of Certified Public Accountants

Front 44

SEC

Back 44

Securities and Exchange Commission

Front 45

The Business Entity Principle

Back 45

States that a business must be considered a separate entity and only the transactions carried out by the business may be recorded. This ensured an undistorted financial picture of the business.

Front 46

The Cost Principle

Back 46

The Cost Principle states that anything a business purchases is recorded as the amount paid, regardless of its real or perceived value. This eliminates guesswork or the possibility of recording inaccurate information.

Front 47

The Objectivity Principle

Back 47

The Objectivity Principle states that accounting operates on objective evidence. All transactions must have proof that they were carried out. The only reliable proof that a transaction occurred is found in source documents such as a sales slip or an invoice.

Front 48

The Continuing-concern Principle

Back 48

The Continuing-concern Principle states that a business is a continuing enterprise and that its buildings, land, or equipment cannot be sold without disrupting the business. So unless the buildings, land, or equipment are for sale, as in the case of a liquidation, their market value is not recorded. This prevents distortion in the objective value of the business.

Front 49

The Stable Dollar Principle

Back 49

The Stable Dollar Principle states that the value of the dollar does not change. This ensures that the dollar is kept as a stable unit of measure for accounting purposes. It also makes it easier to compare financial statements over time.

Front 50

If you buy land for $50,000 and six months later it is valued at $60,000 which figure do you record?

Back 50

you record the price you paid.
The Cost Principle states that anything a business purchases is recorded as the amount paid, regardless of its real or perceived value. This eliminates guesswork or the possibility of recording inaccurate information.

Front 51

If you own and run a business out of yur home, can you combine all personal and professional activities in accounting ?

Back 51

No
The Business Entity Principle states that a business must be considered a separate entity, and only the transactions carried out by the business may be recorded. This ensures an undistorted financial picture of the business.

Front 52

Frank is the accounting officer at a pharmaceutical consulting company. He comes accross an internal memo that describes the purchase of lab supplies by an employee. Can Frank record this transaction based of the infomation in the memo?

Back 52

No
The Objectivity Principle states that accounting operates on objective evidence. All transactions must have proof that they were carried out. The only reliable proof that a transaction occurred is found in source documents such as a sales slip or an invoice

Front 53

If a business's land and equipment increase in value, can they be recorded at market price ?

Back 53

No
The Continuing-concern Principle states that a business is a continuing enterprise and that its buildings, land, or equipment cannot be sold without disrupting the business. So unless the buildings, land, or equipment are for sale, as in the case of a liquidation, their market value is not recorded. This prevents distortion in the objective value of the business.

Front 54

When inflation rises or falls, do you record the value of the buildings t reflect the true market price?

Back 54

No For example land that was acquired ten years ago is recorded at its purchase price even if inflation has increased 10 % . The Stable Dollar Principle states that the value of the dollar does not change. This ensures that the dollar is kept as a stable unit of measure for accounting purposes. It also makes it easier to compare financial statements over time.

Front 55

After renovations the building is still valued at its purchase cost.

Back 55

The cost principle

Front 56

The purchase of supplies is seperate from home and office.

Back 56

The business entity principal

Front 57

All accounting activities assume a business will run indefinitely.

Back 57

The continuing-concern principle

Front 58

$10,000 was the cost of the land despite today's inflation.

Back 58

The stable dollar principle

Front 59

A slip of paper is not acceptable as a receipt for service fees.

Back 59

The objectivity Principle

Front 60

All transactions will affect the business's assets, liabilities, and owner's equity accounts. The accounting equation is applied to check that these three accounts balance. Keep this fundamental rule in accounting in mind when you need to determine how a transaction affects your business's resources.

Back 60

Assets - Liabilities = Owner's Equity

Assets - Owner's Equity = Liabilities

Front 61

accounting equation

Back 61

is a tool that is applied throughout accounting activities to show how transactions affect the asset, liability, and owner's equity accounts.