Financial Accounting 2

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What is the main objective of this textbook?

To introduce students to entrepreneurship

To learn about investment strategies

To understand the basics of marketing

To understand financial accounting in business (correct)

What is net income?

A decrease in owner's equity

A type of investment strategy

A type of business entity

An increase in owner's equity resulting from profitable business operations (correct)

What is the term for a decrease in owner's equity?

Net loss (correct)

Investment

Profit

Net income

Why do people invest in a company's capital stock?

To earn a profit which will increase the value of their investments Signup and view all the answers

What is the general meaning of income?

The reward or payment received in exchange for the production of goods and services Signup and view all the answers

What is the topic of Chapter One of this textbook?

Measuring Business Income Signup and view all the answers

What is the main purpose of the second issue of this textbook?

To cover accounting issues related to commercial and industrial enterprises Signup and view all the answers

What is the primary reason for splitting the textbook into two issues?

To recognize the varying levels of students' knowledge Signup and view all the answers

What is the focus of the first issue of this textbook?

The accounting cycle and its environment Signup and view all the answers

Who is the author of this textbook?

Dr. Ali Abdelkarim Rawy Signup and view all the answers

To whom is this textbook dedicated?

The author's father, mother, wife, and children Signup and view all the answers

What is the academic institution where the author obtained his Ph.D. in Accounting?

Hull University-England Signup and view all the answers

What is the effect of the expense on the owner's equity?

It decreases the owner's equity Signup and view all the answers

What type of account is Advertising Expense?

Expense Signup and view all the answers

How is the decrease in the asset Cash recorded?

By crediting Cash Account Signup and view all the answers

What is the journal entry for the transaction on December 1?

Debit Advertising Expense a/c L.E.1,800, Credit Cash a/c L.E.1,800 Signup and view all the answers

What is the effect of the transaction on December 2 on the liability Accounts Payable?

It increases the liability Accounts Payable Signup and view all the answers

What is the journal entry for the transaction on December 2?

Debit Advertising Expense a/c L.E.2,350, Credit Accounts Payable L.E.2,350 Signup and view all the answers

What is the total debit balance in the Cash a/c as of December 31, 2021?

108900 Signup and view all the answers

What is the balance in the Accounts Receivable a/c as of December 31, 2021?

33000 Signup and view all the answers

What is the balance in the Land a/c as of December 31, 2021?

60000 Signup and view all the answers

What is the total credit balance in the Notes Payable a/c as of December 31, 2021?

150000 Signup and view all the answers

What is the balance in the Building a/c as of December 31, 2021?

180000 Signup and view all the answers

What is the balance in the Tools and Equipment a/c as of December 31, 2021?

7000 Signup and view all the answers

What happens to owner's equity when revenue is recorded?

It increases Signup and view all the answers

How are expenses recorded?

By debits Signup and view all the answers

What is the purpose of maintaining a separate ledger account for each major type of revenue and expense?

To classify and summarize transactions Signup and view all the answers

What happens to the debit balances of expense accounts at the end of the period?

They are listed in the income statement Signup and view all the answers

How are investments of assets in the business entity by the owner recorded?

By debiting the asset accounts and crediting the owner's capital account Signup and view all the answers

What is the nature of investments and withdrawals by the owner?

They are not considered revenue or expenses of the business Signup and view all the answers