ACC 221 FINAL EXAM PAPER 2026 COMPLETE
QUESTIONS AND ANSWERS
◉ Debits-Increase, Credits-Decrease. Answer: Asset Accounts
◉ Debits-Decrease, Credits-Increase. Answer: Liability Accounts
◉ Debits-Decrease, Credits-Increase. Answer: Equity Accounts
◉ Used by accountants to prove that the accounting system is in
balance, that total debits=total credits. Answer: Trial balance
◉ Total Assets, Total Liabilities, Total Equity, Total Liabilities and
Equity. Answer: Balance Sheet Amounts
◉ Collection of all accounts in your accounting system. Answer:
General Ledger
◉ The window into accounts. Records entries of transaction in the
accounting system-journal entries. Answer: General Journal
,◉ Moving of the entry from the General Journal to the accounts.
Answer: Posting
◉ Dr-Cash, Cr-Common Stock (Owner's claim to assets increases).
Answer: Issue Common Stock (Journal Entry)
◉ Dr-Cash, Cr-Note Payable (Bank's claim to assets increases).
Answer: Loan From Bank (Journal Entry)
◉ Dr-Equipment, Cr-Cash (Affects only asset side of ACC equation).
Answer: Purchase of Equipment (Journal Entry)
◉ Dr-Inventory, Cr-Cash (Affects only asset side of ACC equation).
Answer: Purchase of Inventory (Journal Entry)
◉ Gives information for one point in time, Comes from ending
balances in general ledger accounts, Gives total assets, liabilities, and
equity to see if they are all in balance. Answer: Preparing a Balance
Sheet (3 Aspects)
◉ The time period in which the accounting cycle occurs. Answer:
Period of Time Assumption
◉ month, quarter, year. Answer: Commonly Used Accounting periods
, ◉ The collective process of recording and processing the accounting
events of a company. Answer: The Accounting Cycle
◉ The only transactions that need to be recorded in a company's
accounting system are those transactions related to the entity.
Answer: Entity Assumption
◉ A clearly defined economic unit that 1)engages in identifiable
economic activities, 2)controls economic resources for which
accounting records are maintained and periodic financial statements
are prepared, and 3) is distinct from the personal dealings of its
owners or employees.. Answer: Accounting Entity
◉ To ensure the accounting equation always refers to the same
distinct entity the boundaries of the unit, once established, must not
be changed arbitrarily (by chance).. Answer: Accounting Entity (2)
◉ The only transactions that you need to record in a company's
accounting system are those transactions that can be stated in terms
of dollars (a monetary unit). Answer: Monetary Unit Assumption
◉ As you record transactions and prepare financial reports for a
company, you are assuming that that company will be in business for
a long time into the future. Answer: Going Concern Assumption
QUESTIONS AND ANSWERS
◉ Debits-Increase, Credits-Decrease. Answer: Asset Accounts
◉ Debits-Decrease, Credits-Increase. Answer: Liability Accounts
◉ Debits-Decrease, Credits-Increase. Answer: Equity Accounts
◉ Used by accountants to prove that the accounting system is in
balance, that total debits=total credits. Answer: Trial balance
◉ Total Assets, Total Liabilities, Total Equity, Total Liabilities and
Equity. Answer: Balance Sheet Amounts
◉ Collection of all accounts in your accounting system. Answer:
General Ledger
◉ The window into accounts. Records entries of transaction in the
accounting system-journal entries. Answer: General Journal
,◉ Moving of the entry from the General Journal to the accounts.
Answer: Posting
◉ Dr-Cash, Cr-Common Stock (Owner's claim to assets increases).
Answer: Issue Common Stock (Journal Entry)
◉ Dr-Cash, Cr-Note Payable (Bank's claim to assets increases).
Answer: Loan From Bank (Journal Entry)
◉ Dr-Equipment, Cr-Cash (Affects only asset side of ACC equation).
Answer: Purchase of Equipment (Journal Entry)
◉ Dr-Inventory, Cr-Cash (Affects only asset side of ACC equation).
Answer: Purchase of Inventory (Journal Entry)
◉ Gives information for one point in time, Comes from ending
balances in general ledger accounts, Gives total assets, liabilities, and
equity to see if they are all in balance. Answer: Preparing a Balance
Sheet (3 Aspects)
◉ The time period in which the accounting cycle occurs. Answer:
Period of Time Assumption
◉ month, quarter, year. Answer: Commonly Used Accounting periods
, ◉ The collective process of recording and processing the accounting
events of a company. Answer: The Accounting Cycle
◉ The only transactions that need to be recorded in a company's
accounting system are those transactions related to the entity.
Answer: Entity Assumption
◉ A clearly defined economic unit that 1)engages in identifiable
economic activities, 2)controls economic resources for which
accounting records are maintained and periodic financial statements
are prepared, and 3) is distinct from the personal dealings of its
owners or employees.. Answer: Accounting Entity
◉ To ensure the accounting equation always refers to the same
distinct entity the boundaries of the unit, once established, must not
be changed arbitrarily (by chance).. Answer: Accounting Entity (2)
◉ The only transactions that you need to record in a company's
accounting system are those transactions that can be stated in terms
of dollars (a monetary unit). Answer: Monetary Unit Assumption
◉ As you record transactions and prepare financial reports for a
company, you are assuming that that company will be in business for
a long time into the future. Answer: Going Concern Assumption
