BUS-A200 (Exam 1) ACTUAL UPDATED Questions and
CORRECT Answers
Terms in this set (44)
A firm purchases assets on credit. This transaction: Increases both assets and liabilities
A firm pays an account payable. This transaction: Decreases both assets and liabilities
Accrued _ ___ revenue has been earned but not collected.
Declaration and payment of cash dividends result in: A decrease in retained earnings.
Retained earnings The balance sheet item that represents the portion of stockholders equity
resulting from profitable operation of the business is:
If a transaction causes an asset account to decrease, An increase of equal amount in another asset account.
what related effects may occur?
The valuation of assets in the balance sheet is based Cost, because cost is usually factual and verifiable.
primarily upon:
The relationship between the income statement and the The income statement explains part of the change in owners equity between two
balance sheet may be described as: balance sheet dates.
Depreciation expense Systematic allocation of the cost of long-lived assets to expense.
Adjusting Entry The entry to record depreciation expense.
If a journal entry recognizes expense, the other part of Increase a liability account.
the entry might:
Accounts receivable Assets created by selling goods and services on credit.
Dual effect concept When a transaction is recorded in the accounting system, at least two effects on
the basic accounting equation will result.
Purchasing land for cash This transaction changes only the mix of assets and does not affect liabilities or
stockholder equity.
Deferral Any account where the asset or liability is not realized until a future date. Another
way to say it is you postpone recognition of revenue or expense received or paid
but not earned or incurred. Example would be prepaid insurance.
The sum of total liabilities and owners equity. Total assets on a balance sheet prepared on any date must agree with:
Historical Cost Most assets must be reported on the balance sheet as:
CORRECT Answers
Terms in this set (44)
A firm purchases assets on credit. This transaction: Increases both assets and liabilities
A firm pays an account payable. This transaction: Decreases both assets and liabilities
Accrued _ ___ revenue has been earned but not collected.
Declaration and payment of cash dividends result in: A decrease in retained earnings.
Retained earnings The balance sheet item that represents the portion of stockholders equity
resulting from profitable operation of the business is:
If a transaction causes an asset account to decrease, An increase of equal amount in another asset account.
what related effects may occur?
The valuation of assets in the balance sheet is based Cost, because cost is usually factual and verifiable.
primarily upon:
The relationship between the income statement and the The income statement explains part of the change in owners equity between two
balance sheet may be described as: balance sheet dates.
Depreciation expense Systematic allocation of the cost of long-lived assets to expense.
Adjusting Entry The entry to record depreciation expense.
If a journal entry recognizes expense, the other part of Increase a liability account.
the entry might:
Accounts receivable Assets created by selling goods and services on credit.
Dual effect concept When a transaction is recorded in the accounting system, at least two effects on
the basic accounting equation will result.
Purchasing land for cash This transaction changes only the mix of assets and does not affect liabilities or
stockholder equity.
Deferral Any account where the asset or liability is not realized until a future date. Another
way to say it is you postpone recognition of revenue or expense received or paid
but not earned or incurred. Example would be prepaid insurance.
The sum of total liabilities and owners equity. Total assets on a balance sheet prepared on any date must agree with:
Historical Cost Most assets must be reported on the balance sheet as:
