Accounting quiz
1. The Accounting Equation is used to develop the organization's financial reports. (1) Describe what owners' equity values would be if Assets are $100,000 and Liabilities are $27,000 by showing the Accounting Equation and (2) provide an explanation of what accounts could be found in owners' equity.
2. The accounting profession follows a set of guidelines for measurement and disclosure of financial information called the Generally Accepted Accounting Principles (GAAP). (1) Explain what the Going-concern Assumption is and (2) provide an example of its application.
3.Transaction analysis results in the development of a journal entry. A building is purchased for $535,000. (1) Name the accounts impacted and how to use the format account name/debit or credit/dollar amount, and (2) explain how the Accounting Equation is impacted.
4. Adjusting Entries are required at the end of the period to ensure that accrual accounting principles are applied. The rent is prepaid for three months at $1,200 per month. Develop the adjusting entry at the end of the first month that rent should be applied. (1) Name the accounts impacted and how to use the format account name/debit or credit/dollar amount, and (2) explain how the Accounting Equation is impacted.
5. The financial statements present a company to the public in financial terms. (1) Which financial statement identifies where cash was generated and where it was spent during the year, and (2) identify the three major parts of this statement.