AAMI ACCOUNTING 1 LATEST 2026 EXAM QUESTIONS
AND SOLUTIONS RATED A+
✔✔Accounting Period - ✔✔formal financial statements are prepared at the end of each.
✔✔Fiscal Year - ✔✔any accounting period of twelve consecutive months.
✔✔3 - ✔✔how many formal financial statements are there?
✔✔Income Statement/Profit and Loss - ✔✔this formal financial statement contains all
information relating to revenue and expenses for the fiscal period.
✔✔Income Statement - ✔✔first we list the total revenue (which is a credit)
second we itemize the total of each expense
third we take the sum of all the expenses and put that figure under the revenue amount
in the credit column and subtract
the result of this is Net Income
✔✔Statement of Owners Equity - ✔✔this statement reflects any changes made or
changes which occured to the Owners Equity during the fiscal period that the statement
is being prepared for.
✔✔Statement of Owners Equity - ✔✔first we enter the balance of the Capital Account
second we add any additional investments made during the fiscal period that the
statement is being prepared for -this gives us the total investment
next we take the Net Income from the Income Statement which gets entered on the
debit side
then you subtract any withdrawals made
the difference is entered onto the credit side and is the Net Increase in Owners Equity.
this amount is added to the total investment and the result is the Capital Balance
✔✔Balance Sheet - ✔✔this provides us with a snap shot view of the financial condition
of a firm. It lists all the assets which much equal all liabilities plus total owners equity.
Assets = Liabilities + Owners Equity
✔✔Pen or Typed - ✔✔how must a formal financial statement be completed?
✔✔No - ✔✔is the trial balance a formal financial statement?
✔✔Journal - ✔✔this is used to list all the information about a transaction in one specific
place.
✔✔The Record of Original Entry - ✔✔the journal is the first place where transactions
are recorded and as a result, journals are referred to as the?
, ✔✔Journalizing - ✔✔the process by which we record transactions in the journal is
called?
✔✔Chart of Accounts - ✔✔this is similar to the table of contents of a book. It is a
numerical listing of each account that a business has organized by each type of
account.
✔✔100-199 - ✔✔what are assets numbered in the Chart of Accounts?
✔✔200-299 - ✔✔what are liabilities numbered in the Chart of Accounts?
✔✔300-399 - ✔✔what are owners equity numbered in the Chart of Accounts?
✔✔400-499 - ✔✔what is revenue numbered in the Chart of Accounts?
✔✔500-599 - ✔✔what are expenses numbered in the Chart of Accounts?
✔✔No - ✔✔can there be a duplicate number in the Chart of Accounts?
✔✔Chronological Order - ✔✔order in which transactions happen day by day.
✔✔Double Entry Accounting - ✔✔the system of recording at least one debit and credit
for each transaction.
✔✔Worksheet - ✔✔a from used to compute the net income or net loss and to plan
preparation of financial statements.
✔✔Report-Form - ✔✔a balance sheet in which liabilities and owners equity are placed
under assets.
✔✔Account-Form - ✔✔a balance sheet in which assets are on the left side and liabilities
and owner equity is on the right side.
✔✔ Assets = Liabilities + Owners Equity - ✔✔what is the basic accounting equation?
✔✔Assets - ✔✔the things that a business owns or posses that are worth a specific
dollar value. Examples include automobiles, cash, accounts receivables, furniture, and
fixtures.
✔✔Liabilities - ✔✔these are debts that are owed to another for goods and/or services
received or used but not yet paid for. Examples, mortgages, car loans, Accounts
Payable.
AND SOLUTIONS RATED A+
✔✔Accounting Period - ✔✔formal financial statements are prepared at the end of each.
✔✔Fiscal Year - ✔✔any accounting period of twelve consecutive months.
✔✔3 - ✔✔how many formal financial statements are there?
✔✔Income Statement/Profit and Loss - ✔✔this formal financial statement contains all
information relating to revenue and expenses for the fiscal period.
✔✔Income Statement - ✔✔first we list the total revenue (which is a credit)
second we itemize the total of each expense
third we take the sum of all the expenses and put that figure under the revenue amount
in the credit column and subtract
the result of this is Net Income
✔✔Statement of Owners Equity - ✔✔this statement reflects any changes made or
changes which occured to the Owners Equity during the fiscal period that the statement
is being prepared for.
✔✔Statement of Owners Equity - ✔✔first we enter the balance of the Capital Account
second we add any additional investments made during the fiscal period that the
statement is being prepared for -this gives us the total investment
next we take the Net Income from the Income Statement which gets entered on the
debit side
then you subtract any withdrawals made
the difference is entered onto the credit side and is the Net Increase in Owners Equity.
this amount is added to the total investment and the result is the Capital Balance
✔✔Balance Sheet - ✔✔this provides us with a snap shot view of the financial condition
of a firm. It lists all the assets which much equal all liabilities plus total owners equity.
Assets = Liabilities + Owners Equity
✔✔Pen or Typed - ✔✔how must a formal financial statement be completed?
✔✔No - ✔✔is the trial balance a formal financial statement?
✔✔Journal - ✔✔this is used to list all the information about a transaction in one specific
place.
✔✔The Record of Original Entry - ✔✔the journal is the first place where transactions
are recorded and as a result, journals are referred to as the?
, ✔✔Journalizing - ✔✔the process by which we record transactions in the journal is
called?
✔✔Chart of Accounts - ✔✔this is similar to the table of contents of a book. It is a
numerical listing of each account that a business has organized by each type of
account.
✔✔100-199 - ✔✔what are assets numbered in the Chart of Accounts?
✔✔200-299 - ✔✔what are liabilities numbered in the Chart of Accounts?
✔✔300-399 - ✔✔what are owners equity numbered in the Chart of Accounts?
✔✔400-499 - ✔✔what is revenue numbered in the Chart of Accounts?
✔✔500-599 - ✔✔what are expenses numbered in the Chart of Accounts?
✔✔No - ✔✔can there be a duplicate number in the Chart of Accounts?
✔✔Chronological Order - ✔✔order in which transactions happen day by day.
✔✔Double Entry Accounting - ✔✔the system of recording at least one debit and credit
for each transaction.
✔✔Worksheet - ✔✔a from used to compute the net income or net loss and to plan
preparation of financial statements.
✔✔Report-Form - ✔✔a balance sheet in which liabilities and owners equity are placed
under assets.
✔✔Account-Form - ✔✔a balance sheet in which assets are on the left side and liabilities
and owner equity is on the right side.
✔✔ Assets = Liabilities + Owners Equity - ✔✔what is the basic accounting equation?
✔✔Assets - ✔✔the things that a business owns or posses that are worth a specific
dollar value. Examples include automobiles, cash, accounts receivables, furniture, and
fixtures.
✔✔Liabilities - ✔✔these are debts that are owed to another for goods and/or services
received or used but not yet paid for. Examples, mortgages, car loans, Accounts
Payable.
