AAMI ACCOUNTING 1 STUDY GUIDE 2026 EXAM
QUESTIONS AND SOLUTIONS RATED A+
✔✔Mr. Funky decides he wants to buy a $125,000-new hearse. His business checking
account has only $50,000. He decides to take some of his personal money and writes a
check to Funky Funeral Home for $75,000. His deposit of this check is considered to be
a/an____________ . He then runs to Custom Coach Company, and buys the hearse.
The hearse is considered to be a/an __________ . He pays $75,000 in cash and
finances $50,000 with Custom Coach Finance Company. The $50,000 is considered to
be a/an __________ . On his way back to the funeral home, he decides to top off the
gas tank with fuel. The fuel purchase is considered to be a/an ____________ -
✔✔capital investment, asset, liability and expense
✔✔Ms. Hoffman goes to the post office and mails a statement to a client that has an
Account Receivable of $5,000. Which accounts are affected? - ✔✔Postage Expense
and Cash
✔✔Ms. Hoffmann withdrew $500.00 from her business account. Which accounts are
affected in this transaction? - ✔✔Withdrawal and Cash
✔✔Increases in expenses, ____________ owner's equity: - ✔✔Decrease
✔✔True or False - Regarding the following transaction: May 10, paid Joe R. Inc
2,000.00 for supplies that were purchased on May 6. The two accounts that are affected
are Revenue and Accounts Receivable. - ✔✔False
✔✔Folly family wants to return an urn (they have not yet filled) that they purchased from
Friendly Funeral Home. The returned urn (and decreased revenue) ___________
owner's equity. - ✔✔Decreases
✔✔Given the following transaction: May 2, paid 50.00 in cash for gas for delivery truck.
The purchase of gas is: - ✔✔an Expense
✔✔True or False - Regarding the following transaction: May 9, paid wages to part time
worker of 200.00. You have incurred an accounts payable. - ✔✔False
✔✔True or False - Regarding the following transaction: May 18, bought 1,000 worth of
goods from Jones Inc. on account. You have incurred an accounts payable. - ✔✔True
✔✔True or False - Regarding the following transaction: May 5, received 600.00 from
ABC Company for work performed on April 23 and 24. The two accounts that are
affected are Cash and Accounts Receivable. - ✔✔True
, ✔✔True or False - Regarding the following transaction: May 9, paid wages to a part
time worker of 200.00. The first entry line in the General Journal, not including the
year/date of the transaction nor the name of the account being affected, would be a
debit to Wages. - ✔✔True
✔✔Given the following transaction: May 5, received 600.00 from ABC Company for
work performed on April 23 and 24. Which gets entered first into the General Journal? -
✔✔Dr. Cash, then Cr. Accounts Receivable
✔✔What number on the Chart of Accounts would be given to: Advertising Expenses -
✔✔500-599
✔✔What number on the Chart of Accounts would be given to: Withdrawals - ✔✔300-
399
✔✔What number on the Chart of Accounts would be given to: Capital - ✔✔300-399
✔✔What number on the Chart of Accounts would be given to: Machinery - ✔✔100-199
✔✔What number on the Chart of Accounts would be given to: Cash - ✔✔100-199
✔✔What number on the Chart of Accounts would be given to: Accounts Payable -
✔✔200-299
✔✔What number on the Chart of Accounts would be given to: Accounts Receivable -
✔✔100-199
✔✔What number on the Chart of Accounts would be given to: Postage Expense -
✔✔500-599
✔✔What number on the Chart of Accounts would be given to: Wages Expense -
✔✔500-599
✔✔What number on the Chart of Accounts would be given to: Revenue - ✔✔400-499
✔✔True or False - Capital withdrawal decreases owner's equity. - ✔✔True
✔✔True or False - Owner's equity (as learned in the Expanded Accounting Equation)
consists of Capital In, Withdrawals, Revenue and Liabilities. - ✔✔False
✔✔Assets range on the Chart of Accounts - ✔✔100-199
✔✔Liabilities range on the Chart of Accounts - ✔✔200-299
QUESTIONS AND SOLUTIONS RATED A+
✔✔Mr. Funky decides he wants to buy a $125,000-new hearse. His business checking
account has only $50,000. He decides to take some of his personal money and writes a
check to Funky Funeral Home for $75,000. His deposit of this check is considered to be
a/an____________ . He then runs to Custom Coach Company, and buys the hearse.
The hearse is considered to be a/an __________ . He pays $75,000 in cash and
finances $50,000 with Custom Coach Finance Company. The $50,000 is considered to
be a/an __________ . On his way back to the funeral home, he decides to top off the
gas tank with fuel. The fuel purchase is considered to be a/an ____________ -
✔✔capital investment, asset, liability and expense
✔✔Ms. Hoffman goes to the post office and mails a statement to a client that has an
Account Receivable of $5,000. Which accounts are affected? - ✔✔Postage Expense
and Cash
✔✔Ms. Hoffmann withdrew $500.00 from her business account. Which accounts are
affected in this transaction? - ✔✔Withdrawal and Cash
✔✔Increases in expenses, ____________ owner's equity: - ✔✔Decrease
✔✔True or False - Regarding the following transaction: May 10, paid Joe R. Inc
2,000.00 for supplies that were purchased on May 6. The two accounts that are affected
are Revenue and Accounts Receivable. - ✔✔False
✔✔Folly family wants to return an urn (they have not yet filled) that they purchased from
Friendly Funeral Home. The returned urn (and decreased revenue) ___________
owner's equity. - ✔✔Decreases
✔✔Given the following transaction: May 2, paid 50.00 in cash for gas for delivery truck.
The purchase of gas is: - ✔✔an Expense
✔✔True or False - Regarding the following transaction: May 9, paid wages to part time
worker of 200.00. You have incurred an accounts payable. - ✔✔False
✔✔True or False - Regarding the following transaction: May 18, bought 1,000 worth of
goods from Jones Inc. on account. You have incurred an accounts payable. - ✔✔True
✔✔True or False - Regarding the following transaction: May 5, received 600.00 from
ABC Company for work performed on April 23 and 24. The two accounts that are
affected are Cash and Accounts Receivable. - ✔✔True
, ✔✔True or False - Regarding the following transaction: May 9, paid wages to a part
time worker of 200.00. The first entry line in the General Journal, not including the
year/date of the transaction nor the name of the account being affected, would be a
debit to Wages. - ✔✔True
✔✔Given the following transaction: May 5, received 600.00 from ABC Company for
work performed on April 23 and 24. Which gets entered first into the General Journal? -
✔✔Dr. Cash, then Cr. Accounts Receivable
✔✔What number on the Chart of Accounts would be given to: Advertising Expenses -
✔✔500-599
✔✔What number on the Chart of Accounts would be given to: Withdrawals - ✔✔300-
399
✔✔What number on the Chart of Accounts would be given to: Capital - ✔✔300-399
✔✔What number on the Chart of Accounts would be given to: Machinery - ✔✔100-199
✔✔What number on the Chart of Accounts would be given to: Cash - ✔✔100-199
✔✔What number on the Chart of Accounts would be given to: Accounts Payable -
✔✔200-299
✔✔What number on the Chart of Accounts would be given to: Accounts Receivable -
✔✔100-199
✔✔What number on the Chart of Accounts would be given to: Postage Expense -
✔✔500-599
✔✔What number on the Chart of Accounts would be given to: Wages Expense -
✔✔500-599
✔✔What number on the Chart of Accounts would be given to: Revenue - ✔✔400-499
✔✔True or False - Capital withdrawal decreases owner's equity. - ✔✔True
✔✔True or False - Owner's equity (as learned in the Expanded Accounting Equation)
consists of Capital In, Withdrawals, Revenue and Liabilities. - ✔✔False
✔✔Assets range on the Chart of Accounts - ✔✔100-199
✔✔Liabilities range on the Chart of Accounts - ✔✔200-299
