question

Assets = Liabilities + Stockholder's Equity

answer

What is the basic Accounting equation?

question

Things the company owns

answer

What are assets?

question

What the company owes

answer

What are liabilities?

question

Stockholder's Equity

answer

What does Assets minus Liabilities equal?

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Revenues, Expenses, and Dividends.

answer

What three things determine the Retained Earnings?

question

They are what the company earns when they do what they're in business to do.

answer

What are Revenues?

question

The cost that a company incurs in order to generate revenue.

answer

What are Expenses?

question

The distribution of the companies profit to the owners.

answer

What are Dividends?

question

the accumulated profit that the company has earned over it's entire life.

answer

What are Retained Earnings?

question

Income Statement, Retained Earnings Statement, Balance Sheet, Statement of Cash Flows.

answer

What are the four Financial Statements?

question

Balance Sheet

answer

Out of the four Financial Statements, which is for a POINT in time not a period?

question

The field of accounting that provides economic and financial information for investors, creditors, and other external users.

answer

financial accounting

question

Corporation

answer

1. Which form of business organization is characterized by limited liability?

question

Measuring economic activities‬ & Communicating results to interested parties

answer

1. Which of the following processes best defines accounting?

question

A set of guidelines to aid in the financial reporting process‬

answer

1. Generally accepted accounting principles are:

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Financial Accounting

answer

1. To which area of accounting are generally accepted accounting principles primarily relevant?

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Marketing is not Financing, Operating and Investing are

answer

1. Which of the following is not one of the three types of business activities?

question

$30,000

answer

1. If assets total $70,000 and liabilities total $40,000, how much are net assets?

question

Revenues

answer

1. What are increases in resources that a firm earns by providing goods or services to its customers?

question

Detailed history of the company

answer

1. Which of the following items is not required to be included as part of a company's annual report?

question

a. ‭Pressure by superiors to produce a "good" number‬ b. ‭Avoiding the disclosure of confidential information‬ c. ‭An emphasis on short-term results‬ d. ‭All the above present ethical challenges to accountants‬

answer

1. Which of the following situations presents ethical challenges to accountants?

question

1. Tax 2. Unlimited Liability 3. Single owner

answer

1. Sole Proprietor Advantages

question

Shared control

answer

1. Partnership Advantages

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Most complex to set up & Easiest to raise a large amount of funds

answer

1. Corporation Advantages

question

8,000

answer

1. Financial statements of Bower Company: Accts Pay: ‭ 10,000 Revenues:‬17,000 Accts Recv: ‬12,000 Expenses: ‬9,000 Cash‭ :‭ ‬5,000 How much is net income?

question

160,000

answer

1. If Ross Company reports its year-end total liabilities to be $75,000, and its year-end stockholders' equity to be $85,000, how much is Ross Company's year-end total assets?

question

10,000

answer

1. Huff Company began the year with a retained earnings balance of $20,000, reported net income for the year of $60,000, and reported ending retained earnings of $70,000. How much dividends did Huff Company report for the year?

question

Ordered a new machine that will be paid for upon its delivery in two months

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2.1 Which of the following transactions does not affect the balance sheet totals

question

Only the balance sheet

answer

2.2 Tobias Company purchased inventory on account. This transaction will affect:

question

Increase by $130

answer

2.3 If assets increase by $100 and liabilities decrease by $30, stockholders' equity must:

question

3

answer

2.4 A T-account consists of how many parts?

question

The debit is on the left side of an asset account

answer

2.5 Which of the following is true?

question

Advertising Expense

answer

2.6 Which of the following accounts has a normal debit balance?

question

Sales Revenue

answer

2.7 Which of the following accounts is increased by a credit?

question

A credit will increase a revenue account

answer

2.8 Which of the following is true?

question

Assets, expenses, dividends

answer

2.10 Which of these accounts has a normal debit balance?

question

ALL OF THE ABOVE! (Assets, Expenses & Dividends all are in the general ledger)

answer

2.11 The general ledger includes accounts for all but which of the following?

question

Posting only the debit part of a transaction

answer

2.12 Which of the following will cause a trial balance to be out of balance?

question

A compound journal entry

answer

2.13 A journal entry that contains more than just two accounts is called:

question

A journal to the general ledger accounts

answer

2.14 Posting refers to the process of transferring information from:

question

Eliminate

answer

2.15 Which of the following is not one of the five steps in the accounting cycle?

question

Increase both assets and liabilities by $500

answer

2.16 The purchase of $500 of supplies on account will:

question

Recording depreciation expense on a truck

answer

3.1 Which of the following is an example of an adjusting entry?: a. Recording the purchase of supplies on account b. Recording depreciation expense on a truck c. Recording the billing of customers for services rendered d. Recording the payment of wages to employees

question

Accruing expenses to reflect expenses incurred during the accounting period that are not yet paid or recorded

answer

3.2 An adjusting entry to record utilities used during a month for which no bill has yet been received is an example of: a. Allocating assets to expense to reflect the actual operating expenses incurred during the accounting period b. Allocating revenues received in advance to revenue to reflect actual revenues earned during the accounting period c. Accruing expenses to reflect expenses incurred during the accounting period that are not yet paid or recorded d. Accruing revenues to reflect revenues earned during the accounting period that are not yet received or recorded

question

Close Unearned Revenue to Retained Earnings

answer

3.3 Which of the following is not an example of a closing entry?: a. Close each revenue account to the Retained Earnings account b. Close each expense account to the Retained Earnings account c. Close the Dividends account to the Retained Earnings account d. Close Unearned Revenue to Retained Earnings

question

Collecting $4,000 from customers on account

answer

3.4 Which of the following transactions does not affect the balance sheet totals?: a. Purchasing $500 supplies on account b. Paying a $3,000 note payable c. Collecting $4,000 from customers on account d. Payment of an $800 dividend

question

$8,000 net income

answer

3.5 The beginning and ending balances of retained earnings for the year were $30,000 and $35,000, respectively. If yearly dividends totaled $3,000, what was the net income or net loss for the year?: a. $8,000 net loss b. $14,000 net income c. $2,000 net income d. $8,000 net income

question

14,100

answer

3.6 The ending balance of the Accounts Receivable account was $12,000. Services billed to customers for the period were $21,500, and collections on account from customers were $23,600. What was the beginning balance of Accounts Receivable?: a. $33,500 b. $14,100 c. $9,900 d. $33,100

question

10,000

answer

3.7 Kelly Corporation received an advanced payment of $20,000 in 2012 from Rufus Company for consulting services. Kelly performed half of the consulting in 2012 and the remainder in 2013. Kelly reports using the accrual basis of accounting. How much revenue from this consulting project will Kelly report in 2012?: a. $20,000 b. $10,000 c. $0 d. $15,000

question

Net income

answer

4.1 Which of the following items will not be reported on a classified balance sheet?

question

Property, plant, and equipment

answer

4.2 Which of the following would not be considered a current asset?

question

Total assets must equal total liabilities plus stockholders' equity

answer

4.3 For the balance sheet to be in balance, the following must exist:

question

Patents

answer

4.4 Which of the following would be considered an intangible asset?

question

Notes payable

answer

4.5 Which of the following would most likely be classified as a long-term liability?

question

Division

answer

4.6 Ratio analysis always involves which type of arithmetic operation?

question

Benchmarking analysis involves comparing a company's ratios over time.

answer

4.7 Which of the following is not a true statement?

question

10 percent

answer

4,8 A company reported net income of $200 on net sales of $2,000. The company's return on sales is:

question

A measure of a company's cash flow flexibility.

answer

4.9 The return on sales ratio does not provide insight on which of the following:

question

Total liabilities.

answer

4.10 Which of the following is not shown on the statement of stockholders' equity?

question

2:1

answer

4.11 The following data appear in the financial statements of a company. Calculate its current ratio: Current Assets: 10,000 Current Liabilities: 5,000

question

$152,500

answer

4.12 The following data pertains to Smith Consulting, Inc. for 2013. Compute its ending retained earnings: Beg year: 120,000 Net income: 37,500 Dividends paid: 5,000

question

A service company does not include a line for cost of goods sold.

answer

4.13 A merchandising company's multi-step income statement differs from that of a service company in what way?

question

Asset, expense and dividends are debited for increases

answer

2.9 In applying the rules of debits and credits, which of the following statements is correct?

question

c: $2746

answer

5.1 On March 1, Troy Company purchased merchandise with an invoice price of $2,700 and 2/10, n/30 terms. On March 3, Troy pays $100 transportation cost on the purchased goods. On March 10, Troy pays for the merchandise. What is Troy's total cost of the purchased merchandise?

question

c: 12,000

answer

5.2 Newman Company started business on January 1. During the year, the company purchased merchandise with an invoice price of $500,000. Newman also paid $20,000 freight on the merchandise. During the year, Newman also returned $80,000 of the merchandise to its suppliers. All purchases were paid for in a timely manner, and a $10,000 cash discount was taken. $418,000 of the merchandise was sold for $627,000. What is the December 31, balance in the Inventory account?

question

c: Credit to Inventory of $200

answer

5.3 Saber Company uses the perpetual inventory system. Saber purchased merchandise with an invoice price of $800, terms 2/10, n/30. If Saber returns merchandise with an invoice price of $200 to the supplier, what should the journal entry to record the return include?

question

c: Gross profit percentage is 40 percent and return on sales ratio is 10 percent

answer

5.4 Ira Company reports net sales of $500, cost of sales of $300, and net income of $50. What is the gross profit percentage and return on sales ratio for Ira?

question

c: $150

answer

5.5 Smith & Sons purchased $5,000 of merchandise from the Claremont Company with terms of 3/10, n/30. How much discount is Smith & Sons entitled to take if it pays within the allowed discount period of 10 days?

question

d: $5,880

answer

5.6 Moonitz Inc. purchased merchandise with a list price of $6,000 from the Sprague Company. Sprague offers its customers credit terms of 2/10, n/30. What amount should Moonitz pay if the cash discount is taken?

question

b: $22,000

answer

5.7 Kali Company began the period with $20,000 in inventory. The company also purchased an additional $20,000 of inventory and returned $2,000 for a full credit. A physical count of the inventory at year-end revealed an inventory on hand of $16,000. What was Kali's cost of goods sold for the period?

question

a: 40 percent

answer

5.8 The Arcadia Company is a merchandiser and reports the following data at year-end: Net Sales............$100,000 Cost of Goods sold.....$60,0000 Net Income...........$15,000 What is the company's gross profit percentage?

question

c: 15 percent

answer

5.9 Using the data in Question 8, what is The Arcadia Company's return on sales ratio?

question

c. debit the Purchases account for purchases on account.

answer

5.10 Denald Co. uses the periodic inventory system. When goods are purchased, Denald will:

question

b. Cost of goods available for sale is equal to beginning inventory plus cost of goods purchased.

answer

5.11 Which of the following statements regarding cost flows is true?

question

Analyze Record Adjust Report Close

answer

Ch 2: What are the 5 steps in the accounting cycle

question

Accounting procedures whereby sales revenue is recorded when earned and realized and expenses are recorded in the period in which they help to generate the sales revenue.

answer

Accrual Basis of Accounting

question

made at the end of an accounting period under accrual accounting to ensure the proper matching of expenses incurred with revenues earned for the period.

answer

Adjusting entries

question

The economic resources of a business that can be expressed in money terms.

answer

Assets

question

Distributions of assets (usually cash) or stock from a corporation to its stockholders

answer

Dividends

question

The obligations or debts that a business must pay in money or services at some time in the future as a consequence of past transactions or events.

answer

Liabilities

question

Net income: The excess of a business's sales revenues over its expenses (p. 15).

answer

Define: Net Income

question

Net assets: The difference between a business's assets and liabilities. Net assets are equal to stockholders' equity (p. 13).

answer

Define: Net Assets

question

Retained earnings: The earnings of a corporation that have been retained in the corporation (have not been paid out as a dividend) for future corporate use (p. 16, 513).

answer

Define: Retained Earnings

question

The residual interest in the assets of a business after all liabilities have been paid off

answer

Stockholder's Equity

question

Decreases in stockholders' equity incurred by a firm during the process of generating its sales revenues .

answer

Expenses

question

The basic ownership class of capital stock, carrying the right to vote, share in earnings, participate in future share issues, and share in any liquidation proceeds after all more senior claims have been settled.

answer

Common Stock

question

Sales revenue: Increases in stockholders' equity that result when a firm provides goods or services to its customers (p. 14).

answer

Define: Sales revenue

question

Statement of stockholders' equity: A financial statement presenting information regarding the events that cause a change in stockholders' equity during a period. The statement presents the beginning balance, additions to, deductions from, and the ending balance of stockholders' equity for the period (pp. 15, 520).

answer

Define: Statement of Stockholder's Equity

question

A financial statement showing a business's assets, liabilities, and stockholders' equity as of a specific date

answer

Balance Sheet

question

Statement of retained earnings A financial statement showing the financial changes that occurred in retained earnings during the accounting period (p. 520).

answer

Define: Statement of Retained Earnings

question

Statement of cash flows: A financial statement showing a firm's cash inflows and cash outflows for a specific period, classified into operating, investing, and financing activity categories (pp. 17, 544).

answer

Define: Statement of Cash Flows

question

General ledger: A grouping of all of a business's accounts that are used to prepare the basic financial statements (p. 70).

answer

Define: General Ledger

question

General journal: An accounting record with enough flexibility so that any type of business transaction may be recorded in it; a diary of a business's accounting transactions (p. 68).

answer

General Journal

question

Income statement: A financial statement reporting a business's sales revenue and expenses for a given period of time (p. 14).

answer

Define: Income Statement

question

A liability representing revenues received in advance.

answer

Define: Unearned Revenue

question

Prepaid expense is expense paid in advance but which has not yet been incurred.

answer

Prepaid Expense

question

Payment received before a good is sold or a service is provided

answer

Unearned Revenue

question

An expense incurred but not yet paid.

answer

Accrued Expense

question

Revenue earned but not yet billed or received.

answer

Accrued Revenue

question

goods that are considered to be the portion of a business's assets that are ready or will be ready for sale.

answer

Inventory

question

Asset used for the operating functions of a company.

answer

Equipment

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