ACCT 2101- TEST 1 UGA QUESTIONS ANSWERED CORRECTLY LATEST UPDATE 2026
Assets - Answers something that the entity owns that create a future benefit... land, inventory,
construction, are all examples of situations where in the future they are beneficial. So its an asset
Liability - Answers Claims against an entity from an outsider asking for cash or assets... examples
would be deferred payments, payables, discontinued liability/ operation
Rewriting the equation - Answers A= L + SE
For the creditors (peps you owe):
L= A- SE
Owners of the entity:
SE= A- L
Stockholdes Equity - Answers This is what is the owners claims on the assets... This is broken down
further (see graphic in the pptx)
What are revenues? - Answers Up in assets from operation activities
What are expenses? - Answers Down in assets. Net assets that were sacrificed to obtain revenues
All Assets, Liabilities, and Stockholder Equity is broken down into current and non- current; except for
SE, which is broken down between contributed capitol (an investment) and retained earnings -
Answers
The next part is on transaction analysis - Answers
A transaction that says... "Issue common stock to owners for 40,000" - Answers This is an increase in
cash, so an asset... to make this balance this also goes into common which is under SE
A transaction that says... "Buy PP&E for 3,400 cash - Answers In this situation, you are decreasing your
cash but you're gaining an asset... so - in cash and + in the PP&E section, both assets
A transaction that says... "Purchase inventory on credit for 55,000" - Answers Here, there is an
increase in inventory... also there is an increase in acct. payable, because its on credit, so liability
Pay vendor 32,000 of the amount owed - Answers This says, "amount owed." that tells you that it was
on credit. being that you are paying it off, it is deceasing that acct. payable liability. Thus, this also
decreases your cash
Prepaid Expanses - Answers An expense is something that gotta pay, so this means that in some
instances you would prepay it, before you use it. This is a benefit to you, so its an asset... (prepaid
rent/ insurance are examples)
Payables - Answers This is stuff you need to pay in the future... this is accounts payable... an example
of this is a wholesaler who gets products and when it sales it they pay the producer... this is like home
depot
Obligation (unearned revenue) - Answers This is when the entity requires a prepayment before
anything happens... airliners
Accrued Liabilities - Answers First, when you accrue something, you build it up overtime... examples
of this is wages payable, interest payable, wages payable... this are accrued because the increase
overtime if you don't pay them off...
What do you put in your land value section? - Answers the historical cost (what you payed for it)... we
are moving to fair value though
What is good will? - Answers reputation of a company
Closing the books - Answers
Spread sheets for large companies can get large very fast... the solution is debits and credits - Answers
Assets increase with what? - Answers Debit
Liabilities increase with what? - Answers Credit
SE increase with what? - Answers Credit
Dividends increase with what? - Answers Debit
Revenue increase with what? - Answers Credit
Expense increases with what? - Answers Debit
Examples of a beginning Debit and Credit. Here is the situation...
"on 9/14 a co. bought 1,000 worth of supplies on account. at 9/30, the co. had used all but $350
worth of supplies. on 10/9 the co. payed is account." for the 9/14 date. - Answers What do you know?
Assets - Answers something that the entity owns that create a future benefit... land, inventory,
construction, are all examples of situations where in the future they are beneficial. So its an asset
Liability - Answers Claims against an entity from an outsider asking for cash or assets... examples
would be deferred payments, payables, discontinued liability/ operation
Rewriting the equation - Answers A= L + SE
For the creditors (peps you owe):
L= A- SE
Owners of the entity:
SE= A- L
Stockholdes Equity - Answers This is what is the owners claims on the assets... This is broken down
further (see graphic in the pptx)
What are revenues? - Answers Up in assets from operation activities
What are expenses? - Answers Down in assets. Net assets that were sacrificed to obtain revenues
All Assets, Liabilities, and Stockholder Equity is broken down into current and non- current; except for
SE, which is broken down between contributed capitol (an investment) and retained earnings -
Answers
The next part is on transaction analysis - Answers
A transaction that says... "Issue common stock to owners for 40,000" - Answers This is an increase in
cash, so an asset... to make this balance this also goes into common which is under SE
A transaction that says... "Buy PP&E for 3,400 cash - Answers In this situation, you are decreasing your
cash but you're gaining an asset... so - in cash and + in the PP&E section, both assets
A transaction that says... "Purchase inventory on credit for 55,000" - Answers Here, there is an
increase in inventory... also there is an increase in acct. payable, because its on credit, so liability
Pay vendor 32,000 of the amount owed - Answers This says, "amount owed." that tells you that it was
on credit. being that you are paying it off, it is deceasing that acct. payable liability. Thus, this also
decreases your cash
Prepaid Expanses - Answers An expense is something that gotta pay, so this means that in some
instances you would prepay it, before you use it. This is a benefit to you, so its an asset... (prepaid
rent/ insurance are examples)
Payables - Answers This is stuff you need to pay in the future... this is accounts payable... an example
of this is a wholesaler who gets products and when it sales it they pay the producer... this is like home
depot
Obligation (unearned revenue) - Answers This is when the entity requires a prepayment before
anything happens... airliners
Accrued Liabilities - Answers First, when you accrue something, you build it up overtime... examples
of this is wages payable, interest payable, wages payable... this are accrued because the increase
overtime if you don't pay them off...
What do you put in your land value section? - Answers the historical cost (what you payed for it)... we
are moving to fair value though
What is good will? - Answers reputation of a company
Closing the books - Answers
Spread sheets for large companies can get large very fast... the solution is debits and credits - Answers
Assets increase with what? - Answers Debit
Liabilities increase with what? - Answers Credit
SE increase with what? - Answers Credit
Dividends increase with what? - Answers Debit
Revenue increase with what? - Answers Credit
Expense increases with what? - Answers Debit
Examples of a beginning Debit and Credit. Here is the situation...
"on 9/14 a co. bought 1,000 worth of supplies on account. at 9/30, the co. had used all but $350
worth of supplies. on 10/9 the co. payed is account." for the 9/14 date. - Answers What do you know?
