Podcast
Questions and Answers
Which of the following accounts would be considered an asset? (Check all that apply)
Which of the following accounts would be considered an asset? (Check all that apply)
- Accounts receivable (correct)
- Cash (correct)
- Accounts payable
- Building (correct)
- Supplies (correct)
- Common Stock
Which of the following would be considered a source document in an accounting system? (Check all that apply)
Which of the following would be considered a source document in an accounting system? (Check all that apply)
- Employee speeding ticket
- Payroll records (correct)
- Sales receipt (correct)
- Purchase order (correct)
- Checks (correct)
From the lists of items below, choose the one which includes only items that would be defined as cash.
From the lists of items below, choose the one which includes only items that would be defined as cash.
- Coins, checks, money orders (correct)
- Checks, coins, accounts payable
- Coins, accounts receivables, checks
- Checks, money orders, supplies
The correct definition of an 'account' includes which of the following?
The correct definition of an 'account' includes which of the following?
Which is (are) true regarding notes receivable? (Check all that apply)
Which is (are) true regarding notes receivable? (Check all that apply)
The general ledger can be used to determine which of the following? (Select all answers which apply)
The general ledger can be used to determine which of the following? (Select all answers which apply)
Select the statement below that best defines prepaid accounts.
Select the statement below that best defines prepaid accounts.
Assets are claims (by creditors) against the company.
Assets are claims (by creditors) against the company.
Supplies are _____ until they are used. When they are used up, their costs are reported as _____.
Supplies are _____ until they are used. When they are used up, their costs are reported as _____.
Identify which of the following lists include only examples of assets:
Identify which of the following lists include only examples of assets:
Which of the following items would be considered 'cash' and reflected in a company's Cash account? (Check all that apply)
Which of the following items would be considered 'cash' and reflected in a company's Cash account? (Check all that apply)
Notes receivable is considered a(n) _____
Notes receivable is considered a(n) _____
Prepaid accounts are _____ that represent prepayments of future expenses and are increased with a _____.
Prepaid accounts are _____ that represent prepayments of future expenses and are increased with a _____.
Which of the following statements are accurate regarding supplies? (Check all that apply)
Which of the following statements are accurate regarding supplies? (Check all that apply)
Flashcards
What are assets?
What are assets?
Items owned by a company that have value, such as cash, supplies, and buildings.
What is an account in accounting?
What is an account in accounting?
Records of transactions for specific items like assets, liabilities, and expenses.
What are notes receivable?
What are notes receivable?
A promise for future payment from another entity.
What are prepaid accounts?
What are prepaid accounts?
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What is classified as cash?
What is classified as cash?
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How are supplies treated in accounting?
How are supplies treated in accounting?
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What is the general ledger used for?
What is the general ledger used for?
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What are source documents in accounting?
What are source documents in accounting?
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How are notes receivable classified?
How are notes receivable classified?
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How are prepaid accounts and expenses related?
How are prepaid accounts and expenses related?
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What are assets NOT?
What are assets NOT?
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How are supplies recorded in accounting?
How are supplies recorded in accounting?
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What is NOT recorded in a company's Cash account?
What is NOT recorded in a company's Cash account?
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What are the characteristics of supplies?
What are the characteristics of supplies?
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Study Notes
Asset Accounts
- Assets include items such as supplies, accounts receivable, cash, and buildings.
- Accounts payable and common stock are not classified as assets.
Source Documents in Accounting
- Source documents include payroll records, checks, purchase orders, and sales receipts.
- Employee speeding tickets are not considered valid source documents.
Definition of Cash
- Cash encompasses coins, checks, and money orders.
- Accounts payable and supplies do not qualify as cash.
Definition of an Account
- An account represents a record of increases and decreases in specific items such as assets, liabilities, and expenses.
Notes Receivable
- Also known as a promissory note, notes receivable is classified as an asset.
- Represents a promise for future payment from another entity.
General Ledger Usage
- The general ledger provides a complete record of transactions in each account.
- It tracks increases and decreases across all accounts and their balances at any point in time.
Prepaid Accounts
- Considered assets, prepaid accounts represent payments for future expenses.
- They increase with a debit entry.
Misconceptions about Assets
- Assets are not claims against the company by creditors; that description pertains to liabilities.
Supplies Accounting
- Supplies are initially recorded as assets and are categorized as expenses once used.
- Unused supplies can be categorized into different types like store or office supplies.
Classification of Cash
- Only checks, money orders, and coins are recorded in a company's Cash account.
- Prepaid insurance and notes receivable are not counted as cash.
Classification of Notes Receivable
- Notes receivable is classified as an asset.
Interrelation of Prepaid Accounts and Expenses
- Both prepaid accounts and expenses are associated with future costs, with prepaid accounts requiring a debit for increases.
Characteristics of Supplies
- Supplies are treated as assets upon purchase and can be recorded under various categories.
- They remain assets until consumed and should not be treated as liabilities.
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