Accounting 1 Final Exam Review 2023/2024

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What is the Accounting Equation

• Assets + Liabilities = Owner's Equity
• Assets + Owner's Equity = Liabilities
• Assets = Liabilities + Owner's Equity
• Assets = Liabilites - Owner's Equity

An Asset is defined as

• Something that is priceless
• Something that is valueless
• An item that has value
• An item that is owed to another person

A liability is

• a debt owed to another or a company
• a person that often makes mistakes
• when you sell something on account
• when an investment is made by an owner with cash

Owner's Equity is also referred to as

• Cash
• Loans
• Accounts Receivable
• Net Worth

Which group are Assets

• Owner's Capital, Owner's Drawings, Dividends
• Accounts Payable, Loans Payable, Payroll Taxes Payable
• Cash, Accounts Receivable, Inventory, Prepaid Insurance
• Revenues & Expenses

Accounts Receivable occur when....

• Supplies are sold to a customer "on account"
• Supplies are sold to vendors "on account"
• Supplies are sold for Cash
• You buy supplies "on account"

Merchandise is an asset because value will be added to it and sold for a profit

• True
• False

Prepaid Insurance is classified as an asset because the cost of the policy protects a company over a defined time period

• True
• False

Which group are Liabilities

• Cash, Supplies, Prepaid Insurance
• Capital Stock, Dividends, Expenses
• Accounts Payable, Notes Payable
• Contra Accounts, Amortization, Depreciation