Accounting 110 Midterm

Accounting 110 Midterm

Accounting 110 Midterm

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• Question 1
Generally accepted accounting principles (GAAP) are the procedures and guidelines to be followed in the process of preparing financial statements.

• Question 2
The Financial Accounting Standards Board (FASB) is a non-governmental agency that creates the GAAP rules for accounting.

• Question 3
Stockholders own which type of business?

• Question 4
If owner's equity and liabilities increased during the period, then assets must also have increased.

• Question 5
When the owner withdraws cash from the business it will result in an increase in owner's equity.

• Question 6
The balance sheet reports assets, liabilities and owner's equity on a specific date.

• Question 7
Stephen purchased office supplies for $800 in cash. This transaction would

• Question 8
To debit an account is to enter an amount on the left column in the journal entry.

• Question 9
Prepaid Insurance is an expense account.

• Question 10
Mary's business has performed services on account. The journal entry to record this transaction would include a debit to Cash and a credit to Service Revenue.
• Question 11
The normal balance of the Owner, Capital account

• Question 12
The normal balance of the Accounts Receivable account is

• Question 13
The balance sheet

• Question 14
The purpose of the general journal is to provide a chronological record of all transactions completed by the business.

• Question 15
The purpose of the trial balance is to prove that the total of the debit balances and the total of the credit balances in the ledger accounts are equal.

• Question 16
The journal provides the information needed to transfer debits and credits to the accounts in the general ledger.

• Question 17
Jason's business has purchased a new delivery van on account. The...

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