Accounting Final Exam

What is the main purpose of accounting?

• To let the business owner know if there are enough funds to purchase a much needed company vehicle

• To print business documents to take to the bank in hope of obtaining a loan for your business

• To organize and analyze all financial activities of the business

• To know if your business is making money or losing money

What will usually cause the Accounts Payable to increase?

• Purchasing a company printer, and paying for it in a few months when you receive the bill in the mail

• Paying the light bill the same month you receive the bill in the mail

• Selling your customer 100 new calculators

• Making a charitable contribution of $1000 to the Red Cross

What will usually cause the Accounts Receivable to increase?

• Paying all your bills on time

• Never paying your bills on time

• Sometimes paying all your bills on time

• Performing a job for your customer and allowing them to pay you later

When supplies are purchased with cash, what will the change in the Cash Account be?

• When supplies are purchased, Cash account will increase

• When supplies are purchased, Cash account will decrease

• When supplies are purchased, no changes will occur to the Cash account

• When supplies are purchased, Cash account will remain the same for 30 days and then increase

When cash is received, the Cash Account will change in what way?

• Cash account is debited and will increase

• Cash account is credited and will decrease

• Cash account will remain the same

• Cash account will remain consistent and then decrease

Which term is associated with the "right side" of the T-Account?

• The right side of the T-Account is called the positive side

• The right side of the T-Account is called the negative side

• The right side of the T-Account is called the debit side

• The right side of the T-Account is call the credit side

What term is associated with the "left side" of the T-account?

• The left side of the T-account is called the positive side

• The left side of the T-Account is called the negative side

• The left side of the T-Account is called the debit side

• The left side of the T-Account is called the credit side

What is an example of an Asset?

• Accounts Receivable

• Water Bill

• Electricity Bill

• Accounts Payable

What is an example of a liability?

• Accounts Receivable

• Company vehicle

• Fork lift

• Accounts Payable

What is capital?

• What a business owner contributes to his business, and has a cash value

• The location where a business owner works

• A large corporation

• The balance of your cash account