1. Accounting 30S Chapter 2 Review Questions

2. How is a person’s financial position calculated?

3. A – L = Equity

4. Define asset

5. An item of value owned by a business

6. Define liability

7. Amount owed

8. Define owner’s equity

9. The difference between Assets and Liabilities or the owner’s investment in a business

10. What is the accounting equation?

11. Assets = Liabilities + Owner’s Equity

12. Which financial statement shows the financial position of a business?

13. Balance Sheet

14. Where does the name of a business appear in the heading of a balance sheet (on which line)?

15. First line

16. Which side of a balance sheet are the assets listed on?

17. Left side

18. Which side of a balance sheet does a creditor appear on?

19. Right side

20. What does a single ruled line beneath a column of figures indicate?

21. Numbers above the line have been totaled (added or subtracted)

22. When is a double line drawn beneath a total?

23. When it is a final total

24. What is the most liquid asset?

25. Cash

26. In what order are liabilities listed on a balance sheet?

27. Maturity date or the order of the date they will be paid

28. What are Accounts Receivable?

29. Debts of customers or customers who owe money to the business (debtors)

30. What are accounts payable?

31. Debts owed by the business to suppliers or creditors

32. Who has first claim against the assets of a business?

33. Creditors

34. Who benefits from gains made in closing down a business?

35. The owner

36. Who suffers most from losses incurred in closing down a business?

37. The owner

38. What does GAAP stand for?

39. Generally Accepted Accounting Principles

40. What does IFRS stand for?

41. International Financial Reporting Standards

42. What does the Business Entity Concept say?

43. A business’s financial information is kept separate from personal financial information

44. What does the Cost Principle say?

45. Assets are recorded at their cost price

46. What does the Continuing Concern Concept say?

47. It is assumed that the business will continue to operate in the future

48. Give an example of a current asset

49. Cash, Accounts Receivable, Supplies

50. Give an example of a long-term asset

51. Land, building, equipment, automobile

52. Give an example of a current liability

53. Accounts Payable, Bank Loan due within a year

54. Give an example of a long-term liability

55. Bank Loan due in more than a year, Mortgage

56. What is the name of the balance sheet under IFRS?

57. Statement of Financial Position

58. In a spreadsheet what is formed by the intersection of columns and rows?

59. Cells

60. What would you call a cell in row 52 and in column C?

61. C52

62. What is the spreadsheet term for words and titles?

63. Labels

64. What is the spreadsheet term for numbers?

65. Values

66. What symbol tells a spreadsheet program you are using a formula?

67. = sign

68. What does =SUM(B3:B50) telling a spreadsheet to do?

69. To add all the values from cells b3 to b50

70. What does =A7-A5 telling a spreadsheet to do?

71. Subtract the number in cell a5 from the number in cell a7