1. 1.

Which financial statement reports the revenues and expenses for a period of time such as a year or a
month?
Balance Sheet

Income Statement

Statement Of Cash Flows

2. 2.
Which financial statement reports the assets, liabilities, and stockholders' (owner's) equity at a
specific date?
Balance Sheet

Income Statement

Statement Of Cash Flows

3. 3.
Under the accrual basis of accounting, revenues are reported in the accounting period when which
of the following occurs?
Cash Is Received

Services Or Goods Have Been Delivered

4. 4.
Under the accrual basis of accounting, expenses are reported in the accounting period when which
of the following occurs?
Cash Is Paid

An Expense Matches The Revenues Or Is Used Up

5. 5.Revenues minus expenses equals
__________
.
6. 6.Resources owned by a company (such as cash, accounts receivable, vehicles) are reported on the
balance sheet and are referred to as
__________
.
7. 7.
Assets are usually reported on the balance sheet at which amount?
Cost

Current Market Value

Expected Selling Price

8. 8.Obligations (amounts owed) are reported on the balance sheet and are referred to as
__________
.
9. 9.Liabilities often have the word
__________
in their account title.
10.10.
 Unearned Revenues is what type of account?
Asset

Liability

Stockholders' (Owner's) Equity

11.11.
Accounting entries involve a minimum of how many accounts?
One

Two

Three
12.12.The listing of all of the accounts available for use in a company's accounting system is known as
the
__________
.
13.13.Assets minus liabilities equals
__________
.
14.14.
Which term is associated with "left" or "left side"?
Debit

Credit
15.15.
Which term is associated with "right" or "right side"?
Debit

Credit
16.16.
When cash is received, the account Cash will be __________.
Debited

Credited
17.17.
When a company pays a bill, the account Cash will be __________.
Debited

Credited
18.18.
What will usually cause an asset account to increase?
Debit

Credit
19.19.
What will usually cause the liability account Accounts Payable to increase?
Debit
 Credit
20.20.
Entries to expenses such as Rent Expense are usually __________.
Debits

Credits
21.21.
Entries to revenues accounts such as Service Revenues are usually __________.
Debits

Credits

1. The financial statement that is described as a

"snapshot" of a company’s financial position is AELBCNA Unscramble
the ______________ sheet.

2. The __________ method (or basis) of accounting

reports expenses when they are incurred (as CUCLARA Unscramble
opposed to when they are paid).

3. Land is an asset that is not ____________________. ETDPDRCAEIE Unscramble

4. An asset's book value is its cost minus its

UDTCAMALUCE Unscramble
__________________ depreciation.

5. The amount of prepaid insurance that has

expired in the accounting period is reported as SNEEEPX Unscramble
an _____________.

6. A credit entry will cause the Cash account

EEESRADC Unscramble
balance to _____________.

7. Assets = Liabilities + Stockholders’ Equity is

UETOIANQ Unscramble
known as the basic accounting ________________.
8. _____________ will cause a corporation's
EEERSUVN Unscramble
Stockholders' Equity to increase.

9. A listing of the general ledger accounts that

does not include the account balances is the TRCAH Unscramble
_________ of accounts.

10. The general ledger accounts whose balances

are closed at the end of the accounting year are NMICEO Unscramble
the ____________ statement accounts.

11. The statement of cash flows reports amounts

according to three activities: _____________, NOAEGTPIR Unscramble
financing, and investing.

12. The amount of prepaid insurance that

has not expired as of the end of the accounting ESTAS Unscramble
period is reported as an __________.

13. Property is not reported at its current market

RECIPILPN Unscramble
value because of the cost ____________.

14. The _________-entry system means that each

transaction will affect a minimum of two UELDBO Unscramble
accounts and that debits must equal credits.

15. Unearned Revenues is reported on the

IIIYBTALL Unscramble
balance sheet as a ______________.

16. Under the accrual method, the account that

is debited at the time of a sale on credit is EEEIBRALVC Unscramble
Accounts _____________.
 17. Under the accrual method, revenues are
reported on the income statement when they are DRAEEN Unscramble
______________.

18. Under the accrual method, when a company

purchases goods from a supplier on credit the YEPBAAL Unscramble
company will credit Accounts _____________.

19. This is an allocation process (not a valuation

process) associated with equipment and other EIEIDAPCNRTO Unscramble
plant assets.

20. The component of stockholders' equity that

serves as a link to the corporation's income GRSENANI
statement is retained _______________.

1. 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.
2. 1.
Should the $500 entry to the Cash account be a debit?
Yes

No
3. 2.
Should the $500 entry to Mary Smith, Capital be a debit?
Yes

No
4. Use the following information for questions 3 through 6:
A company using the accrual method of accounting performed services on account in August. The
services were for $2,000 and the company gave the customer credit terms that state the amount is
to be paid to the company in September.
5. 3.
Assuming that the company prepares monthly income statements, what will be the
account debited for $2,000 in August?
Cash

Accounts Receivable

Service Revenue
6. 4.
Which account should the company credit for $2,000 in August?
Cash

Accounts Receivable

Service Revenue
7. 5.
In September, when the company receives the $2,000 from the customer, which account should the
company debit?
Cash

Accounts Receivable

Service Revenue
8. 6.
In September, when the company receives the $2,000 from the customer, which account should the
company credit?
Cash

Accounts Receivable

Service Revenue
9. 7.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
10.8.To decrease 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
11.9.What is the normal balance for the following accounts?
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
12.10.
Generally, when an expense is involved in a transaction, an expense account will be __________.
Debited

Credited
13.11.
Generally, when revenues are involved in a transaction, a revenue account will be __________.
Debited

Credited
14.12.
The accountant's word to indicate that an entry will be recorded on the left side of an account is
__________.
Debit

Credit
15.13.
A contra-asset account such as Accumulated Depreciation will likely have which balance?
Debit

Credit
16.14.
A contra-liability account such as Discount on Notes Payable will likely have which balance?
Debit

Credit