Quiz no.

1
Answer the following questions
1. The financial statement that reports the revenues and expenses for a period of time such
as a year or a month is the
Balance Sheet / Income Statement / Statement Of Cash Flows
2. The financial statement that reports the assets, liabilities, and stockholders' (owner's)
equity at a specific date is the
Balance Sheet / Income Statement / Statement Of Cash Flows
3. Under the accrual basis of accounting, revenues are reported in the accounting period
when the
Cash Is Received / Service Or Goods Have Been Delivered
4. Under the accrual basis of accounting, expenses are reported in the accounting period
when the
Cash Is Paid / Expense Matches The Revenues Or Is Used Up
5. Revenues minus expenses equals __Net Income________.
6. Resources owned by a company (such as cash, accounts receivable, vehicles) are reported
on the balance sheet and are referred to as ____assets_____.
7. Assets are usually reported on the balance sheet at which amount?
Cost / Current Market Value / Expected Selling Price
8. Obligations (amounts owed) are reported on the balance sheet and are referred to as
__Liabilities___.
9. Liabilities often have the word __Payable_____ in their account title.
10. Unearned Revenues is what type of account?
Asset / Liability / Stockholders' (Owner's) Equity

Long Test
Choose the best answer

I. To increase the balance in the following accounts, would you debit the account or would you
credit the account?
Accounts Payable Debit Credit
Cash Debit Credit
Land Debit Credit
Notes Payable Debit Credit
Accounts Receivable Debit Credit
Mary Smith, Capital Debit Credit
Supplies Debit Credit
Supplies Expense Debit Credit
Prepaid Insurance Debit Credit
Service Revenue Debit Credit
Mary Smith, Drawing Debit Credit
Equipment Debit Credit
Unearned Revenue Debit Credit

1. Generally when an expense is involved in a transaction, an expense will be

Debited Credited
2. Generally when revenues are involved in a transaction, a revenue account will be
Debited Credited
3. The accountant's word to indicate that an entry will be recorded on the left-side of an
account is
Debit Credit
4. A contra-asset account such as Accumulated Depreciation will likely have which balance?
Debit Credit
5. A contra-liability account such as Discount on Notes Payable will likely have which balance?
Debit Credit

II. Use the following information for questions 1 and 2:

A company receives $500 of cash as an additional investment in the company by its owner,
Mary Smith. The company's Cash account is increased and Mary Smith, Capital is increased.
1. Should the $500 entry to the Cash account be a debit?
Yes No
2. Should the $500 entry to Mary Smith, Capital be a debit?
Yes No

Assignment no. 1
1. The two main methods of bookkeeping and accounting are 1) the cash method, and 2) the
__accrual_ method.
2. __double___-entry bookkeeping means that every transaction will affect two or more
accounts.
3. A _debit___ amount will appear on the left side of a T-account.
4. A listing of the balances in the accounts in order to determine whether debits are equal to
credits is a __trial___ balance.
5. The listing of accounts that are available for posting transactions is the ___chart__ of
accounts.
6. When a check is written, a cash account should be _credited___.
7. Liability accounts will normally have __credit__ balances.
8. Revenue accounts will normally have __credit___ balances.
9. The bookkeeping or accounting equation is Assets = Liabilities + Owner's __equity___.
10. The book of original entry is the definition of a __journal__.