Accounting Test #1
Terms
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- In a T-Account, to increase the value of an asset you would
- Enter a debit on the left side of your T
- In a T-Account, to increase a liability you would
- Enter a credit on the right side of your T
- In a T-Account, to ncrease owners equity you would
- Enter a credit on the right side of your T
- Cash is what type of account?
- Asset
- Accounts Receivable is what type of account?
- Asset
- Accounts Payable is what type of account?
- Liability
- Cost of Goods Sold is what type of account?
- Expense
- Retained Earnings is what type of account?
- Equity
- To record the cash payment of an expense (a bill) you would
- Debit the expense and credit Cash
- To record the receipt of a bill you would
- Debit the expense and credit A/P
- To record the cash receipt from a sale you would
- Debit the Cash and credit Sales
- To record a sale on account you would
- Debit the A/R and credit Sales
- To record a charge on a vendor account for supplies you would
- Debit Supplies Expense and credit A/P
- To record a cash withdrawal by the owner of a company you would
- Debit Owners Equity and credit Cash
- To record a cash investment by the owner of a company you would
- Debit the Cash and credit Owners Equity
- These are long-term or long life assts that are used in the continuing operation of the organization and are expected to be used by the organizations for more than a year. Land, Buildings, Machinery, and Equipment fall into this category.
- Property, Plant & Equipment
- Ownership of the assets of a business by its creditors. This category represents how much money you owe to outside sources.
- Liability
- The money or monetary value a company receives as the result of a sale of products or services.
- Revenue
- Things taht are owned by the business. They have a monetary value, are insurable, and generally have an expected "useful" life span.
- Asset
- These are long-term in nature and have no physical substance but are of value to the owner of the organizatins. Patents, Copyrights, Goodwill, Franchises, and Trademarks fall into this category.
- Intangible Assets
- These are liabilities that are not expected to be paid of in one year or less.
- Long Term Liability
- Things like cash and other assets that can reasonably be expected to be converted to cash, used up, or sold within one year or less.
- Current Assets
- These are the "cost of doing business."
- Expenses
- This category represents the ownership of the assets of the business by the proprietor.
- Owner's Equity
- These are generally long term, are not used in normal operations of the organization adn are not expected to be converted to cash within the year. Stocks and bonds of other organizations fall into this category.
- Investments