1.Describe each of the components of the basic accounting equation.

 Assets = liabilities + equity

 Assets; are all assets or rights held by a company that are expected
to yield profits in the future.
 Liabilities; are all debts or obligations of a company to other entities
known as creditors.
 Capital or equity; it is what the company is worth. It is obtained by
subtracting assets from liabilities.

2. How do revenues and expenses affect the basic accounting equation?

Revenues and expenses are affected in the basic accounting equation
because through this system when we see a revenue an expense is
produced or an account is affected in the equation.

3. Explain the difference between cash basis accounting and accrual basis
accounting.
 Cash basis accounting; recognizes revenues and expenses when
there is a cash inflow or outflow.
 Accrual accounting is based on the premise that revenues and
expenses should be recorded when earned or incurred, not when
received or paid.

4. what is your opinion about the use of the cash basis method in a
business?
That this method can be carried out well in a business as it shows in more
detail the inflow and outflow of money.

5. Present a graphic explanation of the parts that make up an accounting

account or T-account.
 Schematically it can be represented as follows;
6. Elaborate a synthesis of the rules of debit and credit of each of the accounting
accounts and indicate with which movement increases and decreases each
account.
1) Each one will have an increment and a decrement.
2) Each account on the left side will have a DEBIT, DEBIT, CHARGE and
each account on the right side will have a CREDIT, CREDIT, CREDIT,
CREDIT.
3) ASSETS / EXPENSES = increases on the left side "debit" and decreases
on the right side "credit".
4) LIABILITIES/ EQUITY/INCOME = Decreases on the left "debit" side and
increases on the right "credit" side.

7. What is the function of the chart of accounts?

To efficiently carry out the process of recording the operations of an
economic organization.

8. Explain what the accounting manual consists of.

This is a document in which, in addition to the numbers and names of the
accounting accounts, there is a detailed description of what should be
recorded in each of them, what their balance represents and the documents
that support the transaction (invoice, payroll receipt, etc.).

9. What does the normal balance of an account refer to?

The normal balance of an account is known as the accounting movement that
must be made to increase it.
10. What are the characteristics of a general diary?
1) The business has a complete history of the economic transactions carried
out, in chronological order and in a single place.
2) Each recorded transaction must have at least one equal debit and one
equal offsetting credit.
3) For each transaction that is recorded, the sum of the debits made must
equal the sum of the credits.

11. What should be done after transactions have been recorded in the
general journal?
 The entries must be prepared clearly and accurately. It should always be
remembered that after a certain period of time, both the person making the entry
and others will need to read and understand it.

12. Explain the steps necessary to prepare a trial balance.

1) Establish the appropriate heading (company name, name of the financial
report, date of the financial report, date of the financial report).
2) I listed the names of the general ledger accounts in the appropriate order
(assets, liabilities, capital, income and expenses).
3)Enter the debit and credit columns of the trial balance debit or credit
balances in each of the general ledger accounts.
4)Add both the debit and credit columns.
5) Both must add up to the same amount.
13. What is value added tax (VAT)?
The mechanics of this tax is basically that it will be levied only with the
additional value that is incorporated to a good or service in each of its
commercialization stages.
14. Mention some concepts to which the value added tax (VAT) is applied.
This tax obliges the seller to charge the consumer a tax on the income from the
sale or provision of a service, as the case may be. When a sale is made or a
service is rendered and paid in cash, the VAT payable account is used, since in
this case the seller acts as the collector of this tax and the VAT charged to the
customer must be declared by the physical seller.

15. What are the four basic processes of the accounting cycle?
1) Transaction register.
2) Adjustments.
3) Financial statements.
4) Closing.
16. What steps or activities must be performed for each of the basic processes
of the accounting cycle?
1) Information analysis.
2) General journal entry.
3) Classification in the general major.
4) Preparation of the corresponding balance sheet.
True or false?
Answer true or false and if your answer is false, give a reason for it.

1) In the cash basis accounting system, credit sales are not taken into
account. (F) because if a sale is made on credit there will be
accounts receivable.

2) According to the basic accounting equation, each time the total

assets are modified, the liabilities and/or stockholders' equity must be
modified. (V)

3) The value added tax must be calculated for all transactions of an

entity.(V)

4) The normal balance of the bank account is debit . (V)

5) The dividend account is an expense account. ( F ) Dividends are from

capital.

6) The normal or customary balance of an account is known as what is

needed to increase it. ( V )

7) The normal balance of a service revenue account is of a credit

nature. ( V )

8) A debit always represents an increase to an account while a credit

represents a decrease. ( V )

9) The accrual basis is not permitted as a method of recording a

company's transactions. ( V )

10)Depreciation expense is not included in the cash basis accounting

records. ( V )
Related.
Indicate whether the following accounts are debit ( D ) or credit ( A ) in nature.

1) Transport equipment = ( D )

2) Dividends = ( A )

3) Accounts payable = ( D )

4) Customers = ( D )

5) Salary expenses = ( D )

6) Utilities = ( D )

7) Income Tax ( ISR ) = ( D )

8) Capital stock = ( A )

9) Retained earnings = ( A )

10)Sundry creditors = ( A )
Multiple choice
Select the correct answer.

1) Stockholders' equity consists of:

B. Capital stock.

2) Obtaining a bank loan has the following effect on the basic

accounting equation:
E. Increases assets and increases liabilities.

3) In a company, earning income has the following effect on the

accounting equation:
B. Increases assets and increases stockholders' equity
4) In this transaction accounting scheme, revenues are recognized when
the sale is generated; similarly, expenses are recorded when they are
incurred:
D. Accrual basis accounting.
5) If the highest amount of an accounting account is presented in the
credit column, the account is said to have a balance.
A. Debtor
6) These accounts have a normal credit balance.
A. Liability accounts.
7) This tool represents the structure of the accounting system and is
only a list containing the number and name of each of the
accounts used in the accounting system of an economic entity:
A. Chart of accounts.
8) According to the rules of accounting, a debit represents:
E. Only b) and c).

9) The objective of the trial balance is:

B. Verify that the debit and credit balances of the general ledger
accounts are equal.
 10) It is a separate ledger that describes in detail what should be
recorded in each accounting account, the documents that support
such transactions and the number and title of each accounting
account:
B. Accounting manual.
11) One of these accounts records credit sales made by the
company:
A. Banks
12) The basic accounting equation:
B. Shows the relationship between assets, liabilities and
stockholders' equity.
13) Account whose normal balance is debit:
D. Interest expense.
14) Account with a normal credit balance:
A. Interest income
15) If a purchase of a product is made for 14,375 (VAT included) and
the VAT rate is 16%, the tax:
D. 2300.00 to be credited.
16) If a purchase of a product is made for 22,625 (without VAT) and
the VAT rate is 16%, the tax:
A. It will be 3620.00 payable.
17) Which of the following activities do not cause value added tax
VAT:
A. Disposal of assets.
18) Accounts that show the results of previous fiscal years:
A. Retained earnings
19) This account represents advances made for the purchase of merchandise,
materials or goods to be received in the future.
B. Advance payment from suppliers.
20) This account represents the total tax payable to the government:
A.VAT to be credited