AAMI Accounting 1 Final Review exam 2023 with 100%
correct answers
What is the fundamental accounting equation? - ANSWER Assets = Liabilities +
Owners Equity
Amounts owned by a business are referred to as... - ANSWER Liabilities
Which of the following is not considered an account?
a. Accounts Receivable
b. Revenues
c. Accounts Payable
d. Cash
e. Equipment - ANSWER b. Revenues
A business received $600 cash from Charge Customers to apply on account. The
effect of the transaction is an increase in assets (A/R) and a... - ANSWER decrease
in an asset (cash)
When a T account has several items on both sides, the balance of the account is
written... - ANSWER on the side with the larger total
Which of the following accounts decrease when they are debited?
a. Drawing & Capital
b. Liabilities & Expenses
c. Assets and Drawing
d. Capital and Liabilities
e. Expenses and Assets - ANSWER d. Capital and Liabilities
The process of subtotaling both sides of an account and recording the amount on
that side is known as... - ANSWER Footing
The first step in the posting process is recording the... - ANSWER date in the ledger
account
The proof that the debits and credits in the ledger are equal is called the... -
ANSWER Trial Balance
Apple Company purchased $6000 in equipment, paying $2000 in cash and placing
the remainder on an account. The journal entry would look like this: - ANSWER
Equipment $6000
Accounts Payable $4000
Cash $2000
, The ___________ requires that assets be recorded at the actual cost. - ANSWER
Cost Principle
The _______ is a book or file containing the activity by accounts of a business. -
ANSWER General Ledger
Accountants refer to the wages earned by employees but not paid to them at the end
of an accounting period as: - ANSWER Accrued wages
If the cost of a piece of equipment is $15000 and accumulated depreciation amounts
to $5000, the book value of the equipment is: - ANSWER $10,000
Net income for Susan's Treasures is $25,000 for the current year. The owner
withdrew $3,000 per month for personal living expenses. The owner's Capital
account will show a net... - ANSWER Decrease of $11,000
Any additional investments by the owner should be shown as a(n): - ANSWER
addition on the Statement of Owner's Equity
Dowdy Co. has equipment with a cost of $30,000 and accumulated depreciation of
$22,000. What is the book value of the equipment? - ANSWER $8,000
The term, accrued wages, means that: - ANSWER expenses have been incurred
but not yet been recorded
T/F: Expenses are shown as credits. - ANSWER False. Expenses are shown as
debits
Graves Company bought supplies on credit, $1800. What are the effects on the
fundamental accounting equation? - ANSWER Assets increase $1800; Liabilities
increase $1800; Owner's Equity is not effected.
The expanded accounting equation is - ANSWER Assets = Liabilities + Capital -
Drawing + Revenue - Expenses
T/F: The income statement is reported as a period of time. - ANSWER True
What would the journal entry for the withdrawal of cash for personal use by D. Bill,
the owner of a business look like? - ANSWER Debit D. Bill, Drawing and credit
Cash
Net income results when: - ANSWER total revenue exceeds total expenses over
the period
Assume a company has a net income that exceeds the owner's drawing for the
current year. The owner's Capital account: - ANSWER Will Incease
Which of the following accounts will have a remaining balance after the closing
process is completed?
correct answers
What is the fundamental accounting equation? - ANSWER Assets = Liabilities +
Owners Equity
Amounts owned by a business are referred to as... - ANSWER Liabilities
Which of the following is not considered an account?
a. Accounts Receivable
b. Revenues
c. Accounts Payable
d. Cash
e. Equipment - ANSWER b. Revenues
A business received $600 cash from Charge Customers to apply on account. The
effect of the transaction is an increase in assets (A/R) and a... - ANSWER decrease
in an asset (cash)
When a T account has several items on both sides, the balance of the account is
written... - ANSWER on the side with the larger total
Which of the following accounts decrease when they are debited?
a. Drawing & Capital
b. Liabilities & Expenses
c. Assets and Drawing
d. Capital and Liabilities
e. Expenses and Assets - ANSWER d. Capital and Liabilities
The process of subtotaling both sides of an account and recording the amount on
that side is known as... - ANSWER Footing
The first step in the posting process is recording the... - ANSWER date in the ledger
account
The proof that the debits and credits in the ledger are equal is called the... -
ANSWER Trial Balance
Apple Company purchased $6000 in equipment, paying $2000 in cash and placing
the remainder on an account. The journal entry would look like this: - ANSWER
Equipment $6000
Accounts Payable $4000
Cash $2000
, The ___________ requires that assets be recorded at the actual cost. - ANSWER
Cost Principle
The _______ is a book or file containing the activity by accounts of a business. -
ANSWER General Ledger
Accountants refer to the wages earned by employees but not paid to them at the end
of an accounting period as: - ANSWER Accrued wages
If the cost of a piece of equipment is $15000 and accumulated depreciation amounts
to $5000, the book value of the equipment is: - ANSWER $10,000
Net income for Susan's Treasures is $25,000 for the current year. The owner
withdrew $3,000 per month for personal living expenses. The owner's Capital
account will show a net... - ANSWER Decrease of $11,000
Any additional investments by the owner should be shown as a(n): - ANSWER
addition on the Statement of Owner's Equity
Dowdy Co. has equipment with a cost of $30,000 and accumulated depreciation of
$22,000. What is the book value of the equipment? - ANSWER $8,000
The term, accrued wages, means that: - ANSWER expenses have been incurred
but not yet been recorded
T/F: Expenses are shown as credits. - ANSWER False. Expenses are shown as
debits
Graves Company bought supplies on credit, $1800. What are the effects on the
fundamental accounting equation? - ANSWER Assets increase $1800; Liabilities
increase $1800; Owner's Equity is not effected.
The expanded accounting equation is - ANSWER Assets = Liabilities + Capital -
Drawing + Revenue - Expenses
T/F: The income statement is reported as a period of time. - ANSWER True
What would the journal entry for the withdrawal of cash for personal use by D. Bill,
the owner of a business look like? - ANSWER Debit D. Bill, Drawing and credit
Cash
Net income results when: - ANSWER total revenue exceeds total expenses over
the period
Assume a company has a net income that exceeds the owner's drawing for the
current year. The owner's Capital account: - ANSWER Will Incease
Which of the following accounts will have a remaining balance after the closing
process is completed?
