Financial Accounting Concepts

What is the accounting equation?

• Assets + Liabilities + Stockholders' Equity

• Assets = Liabilities + Stockholders' Equity

• Assets = Liabilities (What's equity?)

• Assets = Liabilities - Stockholders' Equity

What are the five account types?

• Assets, Liabilities, Equity, Cash, and Revenues

• Accounts Receivable, Accounts Payable, and Cash

• Assets, Liabilities, Equity, Revenues, and Expenses

• Assets, Liabilities, Equity, Debits, and Credits

If assets increase, then liabilities and/or stockholders' equity must also increase.

• True

• False

Where is the debit side located on a T account?

• Left Side

• Right Side

• It's not on a T account.

Where is the credit side located on a T account?

• Left Side

• Right Side

• It's not on a T account.

Which of the following is not a revenue account?

• Sales Revenue

• Interest Revenue

• Service Revenue

• Unearned Revenue

Which of the following is not an expense account?

• Prepaid Expenses

• Utilities Expense

• Depreciation Expense

• Supplies Expense

What normal balance does assets have?

• Debit

• Credit

• Extra Credit

• Credit Card

What normal balance does liabilities have?

• Debit

• Credit

• Debit Card

• Cash

With the exception of dividends, what is the normal balance for stockholders' equity accounts?

• Debit

• What's stockholders' equity?

• Equity is equity.

• Credit