Accounting and Finance Foundations

Unit 5

Accounting and Finance Foundations Unit 5: Accounting Terminology 425

Accounting Terminology

Chapter 15

Lesson 15.4

Student Assignment

Accounting Terminology Test

1. What is the accounting equation?


2. What does US GAAP stand for?


3. FASB governs US GAAP; what does FASB stand for?


4. There are 12 standards that US GAAP created, which are the main guidelines for accounting.
   One of the standards is “entity assumption.” What does “entity assumption” mean?


5. To balance the accounting equation, every transaction affects _____ accounts.


6. _____ is an example of the owner’s equity account.


7. Every transaction must have a __ and a __.


8. Asset is something you _____.


9. Liability is something you ____.


10. If you paid cash for office furniture: ____ is debited and
    ____ is credited.


11. If you bought supplies on account, Office Supply Company: ____ is debited
    and ____ is credited.

For 12-15, make appropriate T accounts:

12. Owner, Martha Collins, invested cash, $2,000.00.


13. Paid cash for office furniture, $350.00.


14. Paid cash for insurance, $270.00.


15. Bought supplies on account, Office Supply Company, $450.00.

Name: _____________________________________________________ Date: ___________________