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Contents
The income statement displays all revenues and expenses recorded in a period in a single report.
Incorrect!
The balance sheet displays assets, liabilities, and owner’s equity.
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The cash flow statement shows the changes in cash during a period.
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The statement of stockholder’s equity shows the changes in equity during a period.
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The purpose of financial accounting is to provide useful information for outside investors, creditors, and others.
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Although this is a byproduct of financial accounting, it is not the primary purpose.
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Minimizing taxes is not a part of financial accounting. Taxes fall under financial management.
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The balance sheet uses the expanded accounting equation to list assets, liabilities, and equity in a report format.
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The income statement summarizes revenues and expenses for a period. The balance sheet uses the expanded accounting equation to list assets, liabilities, and equity in a report format.
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The cash flows statement summarizes cash activites for a period. The balance sheet uses the expanded accounting equation to list assets, liabilities, and equity in a report format.
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The statement of stockholder’s equity summarizies changes in equity during a period.The balance sheet uses the expanded accounting equation to list assets, liabilities, and equity in a report format.
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The accrual basis of accounting only records income when it is earned.
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The accrual basis of accounting only records income when it is earned. The cash basis of accounting records income when collected. Contracts and availability are not used as revenue recognition principles for accrual accounting.
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A T-account is a way to format accounting transactions that displays debits on the left and credits on the right.
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The general journal is a record of business transactions– not an account format.
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The general ledger is a list of accounts for business transactions– not an account format.
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The ledger account is a record of business transactions for a specific account– not an account format.
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Asset accounts have debit balances.
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Liability and equity accounts have credit balances. Asset accounts have debit balances.
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No account has a contra balance. Accounts either have debit or credit balances. Asset accounts have debit balances.
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Liabilities include resources owned to creditors such as accounts payable, accrued expenses, and notes payable. Cash is an asset.
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Liabilities include resources owned to creditors such as accounts payable, accrued expenses, and notes payable.
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Equity is increased by credits from revenues, owner investments, and retained earnings.
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Accounts with debit balances such as expenses, withdrawals, and treasury stock decrease equity. Only credit equity accounts increase equity.
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All normal assets accounts have a debit balance. Contra asset accounts have a credit balance such as accumulated depreciation.
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All normal assets accounts have a debit balance. Contra asset accounts have a credit balance such as accumulated depreciation.
1. Which financial statement displays the revenues and expenses of a company for a period of time?
2. What is the main purpose of financial accounting?
3. Which of these is not included as a separate item in the basic accounting equation?
4. Which financial statement uses the expanded accounting equation?
5. The accrual basis of accounting records revenues when they are:
6. The account format that displays debits, credits, balances, and headings.
7. Asset accounts have what type of balance?
8. Which account is not a liability account?
9. Which account increases equity?
10. A contra asset account has what type of balance?
of accounting basics with these accounting quizzes.
