{"type":"doc","content":[{"type":"heading","attrs":{"textAlign":null,"level":3},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Q1. What is GAAP?"}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Background"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Topic: Accounting Principles"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"This question tests your understanding of the foundational rules and standards that govern financial accounting in the United States."}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Key Terms:"}]},{"type":"bulletList","content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"GAAP: Generally Accepted Accounting Principles"}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Standard-setting bodies: FASB, SEC"}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Step-by-Step Guidance"}]},{"type":"orderedList","attrs":{"start":1,"type":null},"content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Consider what the acronym GAAP stands for and why it is important in accounting."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Think about who sets these principles and how they impact financial reporting."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Reflect on the purpose of having standardized accounting rules."}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Try solving on your own before revealing the answer!"}]},{"type":"collapsible","content":[{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Final Answer:"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"GAAP stands for Generally Accepted Accounting Principles. These are the rules and standards used by accountants to prepare financial statements, ensuring consistency, reliability, and comparability across organizations."}]}]},{"type":"heading","attrs":{"textAlign":null,"level":3},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Q2. What is the economic entity assumption?"}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Background"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Topic: Accounting Concepts"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"This question tests your knowledge of the assumptions underlying financial accounting, specifically how businesses are treated as separate entities."}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Key Terms:"}]},{"type":"bulletList","content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Economic Entity Assumption: The concept that a business is separate from its owners and other businesses."}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Step-by-Step Guidance"}]},{"type":"orderedList","attrs":{"start":1,"type":null},"content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Recall what it means for a business to be considered an \"entity\" in accounting."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Think about how this assumption affects the recording of transactions."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Consider examples where personal and business transactions must be kept separate."}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Try solving on your own before revealing the answer!"}]},{"type":"collapsible","content":[{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Final Answer:"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"The economic entity assumption means that a business is treated as a separate entity from its owners and other businesses. Only business transactions are recorded in the business's accounting records."}]}]},{"type":"heading","attrs":{"textAlign":null,"level":3},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Q3. What principle is violated by ___?"}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Background"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Topic: Accounting Concepts"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"This question tests your ability to identify which accounting principle is not being followed in a given scenario."}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Key Terms:"}]},{"type":"bulletList","content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Principles: Economic Entity, Cost, Revenue Recognition, Matching, etc."}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Step-by-Step Guidance"}]},{"type":"orderedList","attrs":{"start":1,"type":null},"content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Read the scenario carefully and identify what is being done incorrectly."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Recall the main accounting principles and their definitions."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Match the scenario to the principle that would be violated."}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Try solving on your own before revealing the answer!"}]},{"type":"collapsible","content":[{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Final Answer:"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"The principle violated depends on the scenario, but common violations include the economic entity assumption, cost principle, or revenue recognition principle. For example, recording personal expenses as business expenses violates the economic entity assumption."}]}]},{"type":"heading","attrs":{"textAlign":null,"level":3},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Q4. What is the accounting equation?"}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Background"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Topic: Accounting Equation"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"This question tests your understanding of the fundamental equation that forms the basis of double-entry accounting."}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Key Formula:"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"inlineMath","attrs":{"latex":"\\text{Assets} = \\text{Liabilities} + \\text{Equity}"}}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Step-by-Step Guidance"}]},{"type":"orderedList","attrs":{"start":1,"type":null},"content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Recall the three main components of the accounting equation."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Think about how each transaction affects these components."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Consider why the equation must always balance."}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Try solving on your own before revealing the answer!"}]},{"type":"collapsible","content":[{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Final Answer:"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"The accounting equation is: Assets = Liabilities + Equity. This equation must always balance and is the foundation of double-entry accounting."}]}]},{"type":"heading","attrs":{"textAlign":null,"level":3},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Q5. Definitions of parts of the equity section, and you need to tell which part that is"}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Background"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Topic: Accounting Equation"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"This question tests your knowledge of the components of the equity section in the accounting equation."}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Key Terms:"}]},{"type":"bulletList","content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Common Stock"}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Retained Earnings"}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Additional Paid-in Capital"}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Step-by-Step Guidance"}]},{"type":"orderedList","attrs":{"start":1,"type":null},"content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Review the definitions of each part of the equity section."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Match the definition provided to the correct equity component."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Consider how each part is reported on the balance sheet."}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Try solving on your own before revealing the answer!"}]},{"type":"collapsible","content":[{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Final Answer:"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"The part of the equity section described will be either common stock, retained earnings, or additional paid-in capital, depending on the definition provided."}]}]},{"type":"heading","attrs":{"textAlign":null,"level":3},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Q6. Example of something in accounting equation and you need to pick what it is"}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Background"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Topic: Accounting Equation"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"This question tests your ability to classify items as assets, liabilities, or equity within the accounting equation."}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Key Terms:"}]},{"type":"bulletList","content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Asset: Resource owned by the company"}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Liability: Obligation owed to others"}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Equity: Owner's claim on assets"}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Step-by-Step Guidance"}]},{"type":"orderedList","attrs":{"start":1,"type":null},"content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Identify the item given in the example."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Recall the definitions of asset, liability, and equity."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Determine which category the item fits into based on its characteristics."}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Try solving on your own before revealing the answer!"}]},{"type":"collapsible","content":[{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Final Answer:"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"The item will be classified as either an asset, liability, or equity depending on its nature. For example, cash is an asset, accounts payable is a liability, and common stock is equity."}]}]},{"type":"heading","attrs":{"textAlign":null,"level":3},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Q7. Question about the equation: Common stock + retained earnings (section)"}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Background"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Topic: Accounting Equation"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"This question tests your understanding of how equity is composed in the accounting equation."}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Key Formula:"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"inlineMath","attrs":{"latex":"\\text{Equity} = \\text{Common Stock} + \\text{Retained Earnings}"}}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Step-by-Step Guidance"}]},{"type":"orderedList","attrs":{"start":1,"type":null},"content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Recall the formula for equity in the accounting equation."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Identify what each component represents."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Consider how changes in common stock or retained earnings affect total equity."}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Try solving on your own before revealing the answer!"}]},{"type":"collapsible","content":[{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Final Answer:"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Equity is composed of common stock and retained earnings. The sum of these two represents the owner's claim on the assets of the business."}]}]},{"type":"heading","attrs":{"textAlign":null,"level":3},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Q8. You have to pick the order that financial statements need to be prepared in (e.g., income statement, balance sheet, statement of retained earnings)"}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Background"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Topic: Financial Statements"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"This question tests your knowledge of the sequence in which financial statements are prepared."}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Key Terms:"}]},{"type":"bulletList","content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Income Statement"}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Statement of Retained Earnings"}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Balance Sheet"}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Statement of Cash Flows"}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Step-by-Step Guidance"}]},{"type":"orderedList","attrs":{"start":1,"type":null},"content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Recall the purpose of each financial statement."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Think about which statement provides information needed for the next."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Arrange the statements in the logical order based on their dependencies."}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Try solving on your own before revealing the answer!"}]},{"type":"collapsible","content":[{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Final Answer:"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"The correct order is: Income Statement, Statement of Retained Earnings, Balance Sheet, and then Statement of Cash Flows."}]}]},{"type":"heading","attrs":{"textAlign":null,"level":3},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Q10. Beginning and ending equity and income; you have to find the dividends for that period"}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Background"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Topic: Equity"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"This question tests your ability to use the statement of retained earnings to solve for dividends."}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Key Formula:"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"inlineMath","attrs":{"latex":"\\text{Ending Equity} = \\text{Beginning Equity} + \\text{Net Income} - \\text{Dividends}"}}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Step-by-Step Guidance"}]},{"type":"orderedList","attrs":{"start":1,"type":null},"content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Identify the values for beginning equity, ending equity, and net income."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Recall the formula for calculating dividends."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Set up the equation and solve for dividends."}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Try solving on your own before revealing the answer!"}]},{"type":"collapsible","content":[{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Final Answer:"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Dividends = Beginning Equity + Net Income - Ending Equity. Plug in the values to solve for dividends paid during the period."}]}]},{"type":"heading","attrs":{"textAlign":null,"level":3},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Q11. What effect on the accounting equation does a transaction have? (Service performed, payment received next month)"}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Background"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Topic: Transaction Analysis"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"This question tests your understanding of how transactions affect assets, liabilities, and equity."}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Key Terms:"}]},{"type":"bulletList","content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Accounts Receivable"}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Service Revenue"}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Step-by-Step Guidance"}]},{"type":"orderedList","attrs":{"start":1,"type":null},"content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Identify which accounts are affected when a service is performed but payment is not yet received."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Recall how revenue is recognized under accrual accounting."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Determine which asset and equity accounts increase."}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Try solving on your own before revealing the answer!"}]},{"type":"collapsible","content":[{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Final Answer:"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Assets (Accounts Receivable) and Equity (Service Revenue) both increase. The transaction is recorded even though cash is not yet received."}]}]},{"type":"heading","attrs":{"textAlign":null,"level":3},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Q12. Someone is paying for something they owe somebody"}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Background"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Topic: Transaction Analysis"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"This question tests your understanding of how paying off a liability affects the accounting equation."}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Key Terms:"}]},{"type":"bulletList","content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Accounts Payable"}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Cash"}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Step-by-Step Guidance"}]},{"type":"orderedList","attrs":{"start":1,"type":null},"content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Identify which accounts are affected when a liability is paid."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Recall how cash and liabilities change in this transaction."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Determine the effect on assets and liabilities."}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Try solving on your own before revealing the answer!"}]},{"type":"collapsible","content":[{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Final Answer:"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Assets (Cash) decrease and Liabilities (Accounts Payable) decrease. The payment reduces both cash and the amount owed."}]}]},{"type":"heading","attrs":{"textAlign":null,"level":3},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Q13. Company purchases land, pays $25,000 cash and finances $75,000; assets go up $100,000, assets decrease $25,000 in cash, liabilities increase $75,000"}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Background"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Topic: Transaction Analysis"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"This question tests your ability to analyze a transaction involving both cash and financing."}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Key Formula:"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"inlineMath","attrs":{"latex":"\\text{Assets (Land)} = \\text{Cash Paid} + \\text{Amount Financed}"}}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Step-by-Step Guidance"}]},{"type":"orderedList","attrs":{"start":1,"type":null},"content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Identify the total increase in assets (land purchased)."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Calculate the decrease in cash and increase in liabilities."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Check that the accounting equation remains balanced after the transaction."}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Try solving on your own before revealing the answer!"}]},{"type":"collapsible","content":[{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Final Answer:"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Assets increase by $100,000 (land), cash decreases by $25,000, and liabilities increase by $75,000. The accounting equation remains balanced."}]}]},{"type":"heading","attrs":{"textAlign":null,"level":3},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Q14. Find total assets by identifying which accounts are revenues and expenses and figure out net income"}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Background"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Topic: Income Statement"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"This question tests your ability to classify accounts and calculate net income."}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Key Formula:"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"inlineMath","attrs":{"latex":"\\text{Net Income} = \\text{Revenues} - \\text{Expenses}"}}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Step-by-Step Guidance"}]},{"type":"orderedList","attrs":{"start":1,"type":null},"content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Identify which accounts are revenues and which are expenses."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Calculate net income using the formula above."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Determine how net income affects total assets."}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Try solving on your own before revealing the answer!"}]},{"type":"collapsible","content":[{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Final Answer:"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Net income is calculated as revenues minus expenses. Net income increases equity, which in turn increases total assets."}]}]},{"type":"heading","attrs":{"textAlign":null,"level":3},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Q15. Figure out total assets like table in #8 practice test"}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Background"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Topic: Balance Sheet"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"This question tests your ability to calculate total assets from a list of account balances."}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Key Formula:"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"inlineMath","attrs":{"latex":"\\text{Total Assets} = \\text{Sum of all asset accounts}"}}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Step-by-Step Guidance"}]},{"type":"orderedList","attrs":{"start":1,"type":null},"content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"List all asset accounts provided in the table."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Add up the balances of each asset account."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Ensure you include only asset accounts in your calculation."}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Try solving on your own before revealing the answer!"}]},{"type":"collapsible","content":[{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Final Answer:"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Total assets are the sum of all asset account balances listed in the table."}]}]},{"type":"heading","attrs":{"textAlign":null,"level":3},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Q16. What is a chart of accounts?"}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Background"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Topic: Chart of Accounts"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"This question tests your understanding of the organizational tool used in accounting to categorize accounts."}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Key Terms:"}]},{"type":"bulletList","content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Chart of Accounts: A list of all accounts used by a company"}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Step-by-Step Guidance"}]},{"type":"orderedList","attrs":{"start":1,"type":null},"content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Recall what a chart of accounts is and its purpose."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Think about how it helps organize financial information."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Consider examples of account categories included."}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Try solving on your own before revealing the answer!"}]},{"type":"collapsible","content":[{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Final Answer:"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"A chart of accounts is a list of all accounts used by a company to record transactions, organized by category (assets, liabilities, equity, revenues, expenses)."}]}]},{"type":"heading","attrs":{"textAlign":null,"level":3},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Q17. Four reports learned: chart of accounts, journal, ledger, trial balance; definition provided, match to term"}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Background"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Topic: Recording Accounting Transactions"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"This question tests your ability to match definitions to accounting terms."}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Key Terms:"}]},{"type":"bulletList","content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Chart of Accounts"}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Journal"}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Ledger"}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Trial Balance"}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Step-by-Step Guidance"}]},{"type":"orderedList","attrs":{"start":1,"type":null},"content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Review the definitions of each report."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Match each definition to the correct term."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Consider the role each report plays in the accounting cycle."}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Try solving on your own before revealing the answer!"}]},{"type":"collapsible","content":[{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Final Answer:"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Each definition matches to one of the four terms: chart of accounts, journal, ledger, or trial balance."}]}]},{"type":"heading","attrs":{"textAlign":null,"level":3},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Q18. Which of these following accounts increases with a debit?"}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Background"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Topic: Increases and Decreases in the Accounts"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"This question tests your understanding of the rules of debit and credit for different account types."}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Key Terms:"}]},{"type":"bulletList","content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Debit: Left side of an account"}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Asset, Expense, Dividend accounts increase with a debit"}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Step-by-Step Guidance"}]},{"type":"orderedList","attrs":{"start":1,"type":null},"content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Recall which types of accounts increase with a debit."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Review the normal balance for each account type."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Identify the account in the question and determine if it increases with a debit."}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Try solving on your own before revealing the answer!"}]},{"type":"collapsible","content":[{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Final Answer:"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Asset, expense, and dividend accounts increase with a debit. Liability, equity, and revenue accounts increase with a credit."}]}]},{"type":"heading","attrs":{"textAlign":null,"level":3},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Q19. One of the accounting equation parts: which side increases, decreases, and what's the normal balance (doesn't ask for assets)"}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Background"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Topic: Expanding the Rules of Debit and Credit"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"This question tests your understanding of the normal balance and how accounts increase or decrease."}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Key Terms:"}]},{"type":"bulletList","content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Normal Balance: The side (debit or credit) that increases the account"}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Liabilities and Equity: Increase with credit, decrease with debit"}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Step-by-Step Guidance"}]},{"type":"orderedList","attrs":{"start":1,"type":null},"content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Recall the normal balance for liabilities and equity accounts."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Determine which side increases and which side decreases the account."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Apply this knowledge to the account in question."}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Try solving on your own before revealing the answer!"}]},{"type":"collapsible","content":[{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Final Answer:"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Liabilities and equity accounts increase with a credit and decrease with a debit. Their normal balance is on the credit side."}]}]},{"type":"heading","attrs":{"textAlign":null,"level":3},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Q20. Know what posting is"}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Background"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Topic: Journalizing and Posting Transactions"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"This question tests your understanding of the process of transferring journal entries to the ledger."}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Key Terms:"}]},{"type":"bulletList","content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Posting: Transferring journal entries to the ledger accounts"}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Step-by-Step Guidance"}]},{"type":"orderedList","attrs":{"start":1,"type":null},"content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Recall the steps in the accounting cycle."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Identify where posting fits in the cycle."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Think about the purpose of posting and its effect on the ledger."}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Try solving on your own before revealing the answer!"}]},{"type":"collapsible","content":[{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Final Answer:"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Posting is the process of transferring the information from the journal to the ledger accounts."}]}]},{"type":"heading","attrs":{"textAlign":null,"level":3},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Q21. You will have three items: ledger, source document, and journal; determine what order these go in"}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Background"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Topic: Journalizing and Posting Transactions"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"This question tests your understanding of the sequence of recording transactions."}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Key Terms:"}]},{"type":"bulletList","content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Source Document"}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Journal"}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Ledger"}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Step-by-Step Guidance"}]},{"type":"orderedList","attrs":{"start":1,"type":null},"content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Recall the order in which transactions are recorded and posted."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Think about what information each item provides."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Arrange the items in the correct sequence."}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Try solving on your own before revealing the answer!"}]},{"type":"collapsible","content":[{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Final Answer:"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"The correct order is: source document, journal, ledger."}]}]},{"type":"heading","attrs":{"textAlign":null,"level":3},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Q22. Know what trial balance is"}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Background"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Topic: Trial Balance"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"This question tests your understanding of the purpose and structure of a trial balance."}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Key Terms:"}]},{"type":"bulletList","content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Trial Balance: A list of all accounts and their balances at a specific point in time"}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Step-by-Step Guidance"}]},{"type":"orderedList","attrs":{"start":1,"type":null},"content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Recall what a trial balance is used for."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Think about how it helps ensure the accounting equation is balanced."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Consider what information is included in a trial balance."}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Try solving on your own before revealing the answer!"}]},{"type":"collapsible","content":[{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Final Answer:"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"A trial balance is a list of all accounts and their balances at a specific point in time, used to check that debits equal credits."}]}]},{"type":"heading","attrs":{"textAlign":null,"level":3},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Q23. Gives definition of a ratio (ratio learned in given chapter)"}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Background"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Topic: Ratio"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"This question tests your ability to identify and calculate financial ratios."}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Key Terms:"}]},{"type":"bulletList","content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Current Ratio, Debt-to-Equity Ratio, etc."}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Step-by-Step Guidance"}]},{"type":"orderedList","attrs":{"start":1,"type":null},"content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Recall the definition of the ratio provided."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Match the definition to the correct ratio."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Consider the formula for calculating the ratio."}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Try solving on your own before revealing the answer!"}]},{"type":"collapsible","content":[{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Final Answer:"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"The ratio is identified based on its definition, such as the current ratio: Current Assets / Current Liabilities."}]}]},{"type":"heading","attrs":{"textAlign":null,"level":3},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Q24. You have to calculate the balance in an account (practice test example #8)"}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Background"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Topic: Determining the Balance of a T-Account"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"This question tests your ability to calculate the ending balance in a T-account."}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Key Formula:"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"inlineMath","attrs":{"latex":"\\text{Ending Balance} = \\text{Total Debits} - \\text{Total Credits}"}}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Step-by-Step Guidance"}]},{"type":"orderedList","attrs":{"start":1,"type":null},"content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"List all debits and credits for the account."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Add up the total debits and total credits."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Subtract credits from debits to find the ending balance."}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Try solving on your own before revealing the answer!"}]},{"type":"collapsible","content":[{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Final Answer:"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"The ending balance is calculated as total debits minus total credits for the account."}]}]},{"type":"heading","attrs":{"textAlign":null,"level":3},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Q25. T accounts"}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Background"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Topic: The Ledger Accounts After Posting"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"This question tests your understanding of T-accounts and how they are used to track account balances."}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Key Terms:"}]},{"type":"bulletList","content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"T-Account: Visual representation of an account"}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Debits (left), Credits (right)"}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Step-by-Step Guidance"}]},{"type":"orderedList","attrs":{"start":1,"type":null},"content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Recall the structure of a T-account."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"List debits on the left and credits on the right."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Calculate the ending balance by comparing debits and credits."}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Try solving on your own before revealing the answer!"}]},{"type":"collapsible","content":[{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Final Answer:"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"A T-account shows debits on the left and credits on the right; the ending balance is the difference between the two."}]}]},{"type":"heading","attrs":{"textAlign":null,"level":3},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Q26. Journal entry"}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Background"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Topic: Journalizing and Posting Transactions"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"This question tests your ability to record a transaction in the journal."}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Key Terms:"}]},{"type":"bulletList","content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Journal Entry: Record of a transaction"}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Debits and Credits"}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Step-by-Step Guidance"}]},{"type":"orderedList","attrs":{"start":1,"type":null},"content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Identify the accounts affected by the transaction."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Determine which accounts are debited and which are credited."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Record the journal entry with proper formatting."}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Try solving on your own before revealing the answer!"}]},{"type":"collapsible","content":[{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Final Answer:"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"The journal entry records the transaction by debiting and crediting the appropriate accounts."}]}]},{"type":"heading","attrs":{"textAlign":null,"level":3},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Q27. Gives journal entry, you have to explain what happened"}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Background"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Topic: Journalizing and Posting Transactions"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"This question tests your ability to interpret a journal entry and explain the underlying transaction."}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Key Terms:"}]},{"type":"bulletList","content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Journal Entry"}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Transaction Explanation"}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Step-by-Step Guidance"}]},{"type":"orderedList","attrs":{"start":1,"type":null},"content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Review the journal entry provided."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Identify which accounts are debited and credited."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Explain the business event that caused the entry."}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Try solving on your own before revealing the answer!"}]},{"type":"collapsible","content":[{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Final Answer:"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"The journal entry reflects a specific business transaction, such as purchasing supplies or paying off a liability."}]}]},{"type":"heading","attrs":{"textAlign":null,"level":3},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Q28. Gives transaction, use words (e.g., debit to cash)"}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Background"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Topic: Journalizing and Posting Transactions"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"This question tests your ability to describe the journal entry in words."}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Key Terms:"}]},{"type":"bulletList","content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Debit"}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Credit"}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Step-by-Step Guidance"}]},{"type":"orderedList","attrs":{"start":1,"type":null},"content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Identify the accounts affected by the transaction."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Determine which account is debited and which is credited."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Describe the entry in words (e.g., debit cash, credit revenue)."}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Try solving on your own before revealing the answer!"}]},{"type":"collapsible","content":[{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Final Answer:"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"The transaction is described in words, such as \"debit cash, credit service revenue.\""}]}]},{"type":"heading","attrs":{"textAlign":null,"level":3},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Q29. Transaction where you’re going to use words (like practice test #13)"}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Background"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Topic: Journalizing and Posting Transactions"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"This question tests your ability to describe a journal entry in words."}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Key Terms:"}]},{"type":"bulletList","content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Debit"}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Credit"}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Step-by-Step Guidance"}]},{"type":"orderedList","attrs":{"start":1,"type":null},"content":[{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Identify the accounts affected by the transaction."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Determine which account is debited and which is credited."}]}]},{"type":"listItem","content":[{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"Describe the entry in words."}]}]}]},{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"underline"}],"text":"Try solving on your own before revealing the answer!"}]},{"type":"collapsible","content":[{"type":"heading","attrs":{"textAlign":null,"level":4},"content":[{"type":"text","marks":[{"type":"bold"}],"text":"Final Answer:"}]},{"type":"paragraph","attrs":{"textAlign":null},"content":[{"type":"text","text":"The journal entry is described in words, such as \"debit supplies, credit cash.\""}]}]},{"type":"heading","attrs":{