FREE Accounting Basics Question and Answers
How many accounts are required as a minimum for accounting entries?
Explanation:
A debit entry is always recorded against one account, and a credit entry is always recorded against the other account, whenever you create an accounting transaction.
What often results in an asset account growing?
Explanation:
During the accounting period, debit transactions cause asset accounts to increase and expense account balances to increase.
What amount does an asset typically appear on a balance sheet as?
Explanation:
Depreciable assets are presented along with their cumulative depreciation, so their current value is somewhat depicted, even if assets are often reported at historical cost. Additionally, inventory may be recorded at a lower of cost or market value.
Which financial statement contains the shareholders' (owners') equity, liabilities, and assets as of a particular date?
Explanation:
An accounting document known as a balance sheet lists the assets, liabilities, and shareholder equity of a corporation for a given time period. Calculating returns on investment and assessing a company's financial stability and organizational structure are both based on balance sheets. Simply explained, these are financial statements that show the assets and liabilities of a company as well as the amount of capital raised from investors.
What kind of account is Unearned Revenues?
Explanation:
The business that is supposed to provide the service or deliver the goods has been paid in advance and is consequently obligated (or has a duty) to do so.
Which financial statement summarizes the income and outgoings for a given time frame, such as a month or year?
Explanation:
One of the three statements used in both accounting and corporate finance, including financial modeling, is the income statement. The statement gives a clear and logical breakdown of the company's revenue, costs, gross profit, selling and administrative expenses, other expenses and income, taxes paid, and net profit.
When which of the following occurs, expenses are reported in the accounting period under the accrual method of accounting.
Explanation:
For all larger businesses, accrual basis accounting is the de facto method for recording transactions. The cash basis of accounting, in which revenues are recorded when cash is received and expenses are recorded when cash is paid.