Podcast
Questions and Answers
What is the correct equation that represents the relationship between assets, liabilities, and owner's equity?
What is the correct equation that represents the relationship between assets, liabilities, and owner's equity?
Which account would be classified as a current asset?
Which account would be classified as a current asset?
What type of liability is represented by the account labeled 'Loans Payable'?
What type of liability is represented by the account labeled 'Loans Payable'?
What does the account 'Accumulated Depreciation – Equipment' represent?
What does the account 'Accumulated Depreciation – Equipment' represent?
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Which of the following accounts is NOT considered a long-term liability?
Which of the following accounts is NOT considered a long-term liability?
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If Teddy Gomez opened a business by investing cash of P50,000 and cars worth P750,000, what is the total value of his assets?
If Teddy Gomez opened a business by investing cash of P50,000 and cars worth P750,000, what is the total value of his assets?
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In accounting, what is the purpose of the chart of accounts?
In accounting, what is the purpose of the chart of accounts?
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Which account represents an asset that acknowledges the possibility of uncollectible amounts?
Which account represents an asset that acknowledges the possibility of uncollectible amounts?
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What defines current assets?
What defines current assets?
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Which of the following is an example of prepaid expenses?
Which of the following is an example of prepaid expenses?
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Which category do tangible assets like buildings and machinery fall into?
Which category do tangible assets like buildings and machinery fall into?
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What is the purpose of nominal accounts?
What is the purpose of nominal accounts?
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Which of the following statements about accumulated depreciation is correct?
Which of the following statements about accumulated depreciation is correct?
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What distinguishes non-current assets from current assets?
What distinguishes non-current assets from current assets?
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Which of the following is not included in the financial position of a business?
Which of the following is not included in the financial position of a business?
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What do permanent accounts carry over to the next accounting period?
What do permanent accounts carry over to the next accounting period?
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What does the Statement of Financial Position report on a given date?
What does the Statement of Financial Position report on a given date?
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How frequently is the Statement of Financial Position typically prepared?
How frequently is the Statement of Financial Position typically prepared?
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Which accounting equation accurately represents the relationship between the basic accounting elements?
Which accounting equation accurately represents the relationship between the basic accounting elements?
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What is an account in the context of accounting elements?
What is an account in the context of accounting elements?
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What term describes the Statement of Financial Position as a snapshot of a company's financial status?
What term describes the Statement of Financial Position as a snapshot of a company's financial status?
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What is the primary purpose of the Statement of Financial Position?
What is the primary purpose of the Statement of Financial Position?
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What is the capital account balance after accounting for drawings of P5,000 from an initial P800,000?
What is the capital account balance after accounting for drawings of P5,000 from an initial P800,000?
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Which statement is not accurate regarding the Statement of Financial Position?
Which statement is not accurate regarding the Statement of Financial Position?
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What is the total increase in assets as indicated in the analysis?
What is the total increase in assets as indicated in the analysis?
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In the T-Account structure, what does the left side represent?
In the T-Account structure, what does the left side represent?
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Which of the following accounts is not classified as an expense from the list provided?
Which of the following accounts is not classified as an expense from the list provided?
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What is the purpose of using a T-Account in accounting?
What is the purpose of using a T-Account in accounting?
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Which account reflects an increase in Gomez's capital according to the analysis?
Which account reflects an increase in Gomez's capital according to the analysis?
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What was the amount borrowed from Calambank according to the analysis?
What was the amount borrowed from Calambank according to the analysis?
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Which account would be credited when service income is recognized?
Which account would be credited when service income is recognized?
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What is the total amount of increases in expenses listed?
What is the total amount of increases in expenses listed?
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What is the purpose of the income summary account?
What is the purpose of the income summary account?
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How are withdrawals by the owner recorded?
How are withdrawals by the owner recorded?
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What does the accounting equation represent?
What does the accounting equation represent?
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Which of the following is NOT included in a journal entry?
Which of the following is NOT included in a journal entry?
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When recording increases in assets, how are these recorded?
When recording increases in assets, how are these recorded?
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What happens to the owner's equity account when additional investments are made?
What happens to the owner's equity account when additional investments are made?
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Which statement accurately reflects the relationship indicated by the accounting equation?
Which statement accurately reflects the relationship indicated by the accounting equation?
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What does an increase in Uncollectible Accounts Expense signify?
What does an increase in Uncollectible Accounts Expense signify?
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What occurs when expenses exceed revenue?
What occurs when expenses exceed revenue?
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What does a withdrawal by the owner do to Equity?
What does a withdrawal by the owner do to Equity?
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Which accounting equation represents the relationship among assets, liabilities, and owner's equity?
Which accounting equation represents the relationship among assets, liabilities, and owner's equity?
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What is the term for the total expenses incurred by the company?
What is the term for the total expenses incurred by the company?
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Which statement accurately describes the nature of current liabilities?
Which statement accurately describes the nature of current liabilities?
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What does an increase in bad debts indicate?
What does an increase in bad debts indicate?
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What are real accounts primarily associated with?
What are real accounts primarily associated with?
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How does the status of an asset change when it is used?
How does the status of an asset change when it is used?
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Study Notes
Multiple Choice Questions
- Midterm exam, 50% multiple choice, 50% computational
- Accounting titles required
- Columnar sheet format
Assets
- Computer equipment is an asset.
- Capital = Assets - Liabilities
Liabilities
- Money borrowed by the firm, not yet prepaid, is a liability.
Accounting Equation
- Assets = Liabilities + Owner's Equity
Debit and Credit
- Decreases in any given liability account are credited.
- The word "debit" typically means increase and "credit" typically means decrease.
Transactions
- Purchasing a service vehicle on account increases assets and liabilities.
- Recording a full payment of an account receivable leaves total assets unchanged.
- Purchasing supplies with cash increases supplies and decreases cash.
Transactions Affecting Owner's Equity
- Investing 50,000 into a business increases assets and owner's equity by that amount.
- Owner withdraws 5,000 for personal use reduces assets and owner's equity by 5,000.
Income Statement
- An income statement does not include asset accounts.
- Land is not subject to depreciation.
- Intangible assets cover all types
Current Assets
- Cash includes coins, currencies, and bank deposits.
- Accounts receivable are expected future payments from customers.
- Inventories are all types of goods (raw materials, work-in-progress, finished goods).
Expenses
- Paying employees increases expenses.
- Withdrawals reduce assets.
Computations
- Assets (760,000) - Liabilities (360,000) = Owner's Equity (400,000)
- Assets (860,000) - Liabilities (268,000) = Owner's Equity (592,000)
Real Accounts
- Called balance sheet accounts or permanent accounts meaning they are carried on to the next accounting year.
- Show financial position (assets, liabilities, and equity) of the business.
Nominal Accounts
- Also called income statement accounts or temporary accounts.
- Show financial performance for the accounting period. (income, expenses, withdrawals)
Current Assets
- Cash (includes coins, currency, checks, money orders, bank deposits, and drafts)
- Cash equivalents (short-term, highly liquid investments)
- Notes receivable
- Accounts receivable
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Description
Test your knowledge with our midterm exam focused on essential accounting concepts. This quiz covers topics including assets, liabilities, the accounting equation, and transactions affecting owner's equity. Perfect for students preparing for their accounting assessments.
