Chapter 1 and 2 Test
Quiz yourself by thinking what should be in
each of the black spaces below before clicking
on it to display the answer.
net income/total assets
total debts/total assets
Date - Cash Flows - Cash + Land + Supplies+ Equipment = Notes Payable + Accts. Payable = Common Stock, Retained Earnings - Revenue - Expenses = Net Income
Four Financial Statements
1. Income statement 2. Statement of Changes in Owners Equity 3. Balance Sheet 4. Statement of changes in cash flows
Debits increase EXpenses, Assets, Dividends
What do credits increase?
Liabilities, Equity, Revenue
Debits on the L, Credits on the R
If Assets/Expenses or Dividends go up what else goes up?
If Liabilities, Equity or Revenue goes up, what else goes up?
Expenses must equal revenues
Records that are kept for each asset, liability, equity, revenue, expense and dividend component of an entity
the book used to record all transactions
To write a journal entry
Debits first, flush left. Credits second, indented right.
The General Ledger
A record of all the accounts and their balances.
Trying out it your debits and credits are correct.