Home Page Social Science Economics Finance Accounting Principles of Accounting Ch 8 - Flashcards

Principles of Accounting Ch 8 – Flashcards

Ember Wagner

8 July 2022

question

Which of the following steps of the accounting cycle are in the correct order

answer

prepare a trial balance, make adjustments, prepare financial statements

question

What is the purpose of the post-closing trial balance

answer

to prove the equality of the debit and credit balances in the general ledger accounts

question

The Item column in the general ledger is used for

answer

a description of special entries

question

The journal entry to close revenue accounts includes

answer

debiting the revenue accounts and crediting Income Summary

question

A chart of accounts does NOT include

answer

names of customers

question

Copies of sales tickets or sales invoices issued to customers or clients provide information about

answer

sales of goods or services.

question

When posting an adjusting entry to the general ledger, write

answer

"adjusting" in the Item column.

question

To record wages earned but not paid under the modified cash accounting method,

answer

no entry is required.

question

Cash is used to pay for a car for personal use by the owner. The transaction includes

answer

debiting Drawing and crediting Cash.

question

In completing the work sheet, what is the reason for adding the net income for the year to the Balance Sheet Credit column

answer

Owner's equity is not up-to-date

question

A net loss is shown on the work sheet as a(n)

answer

debit in the Balance Sheet columns.

question

If a business records revenues when earned, regardless of whether cash has been received, and records expenses when they are incurred, the accounting system is a(n)

answer

modified cash basis of accounting.

question

The time an asset is expected to last is called its

answer

useful life.

question

If the owner of a company invested cash in a business enterprise, the transaction would include

answer

debiting Cash and crediting Capital.

question

If cash is paid for office rent, the transaction includes

answer

debiting Rent Expense and crediting Cash

question

The steps in the journalizing process include all of the following EXCEPT

answer

enter the balance.

question

Changes in owner's equity that result from investments or withdrawals of assets by the owner are included in the

answer

statement of owner's equity

question

The fourth pair of columns on a 10-column work sheet prepared at the end of the period would be the

answer

Income Statement columns.

question

Supplies originally cost $500, but only $150 worth of supplies were used this period. The adjusting entry would be

answer

debit Supplies Expense, $150; credit Supplies, $150

question

An account used with a related account to bring about a decrease in the net amount of the two account balances is called a(n)

answer

contra-account

question

An asset cost $33,000. It has an expected useful life of 5 years and an expected salvage value of $3,000. Depreciation expense for the first year of the asset's life using the straight-line method is

answer

$6000

question

The simplest form of journal is one with

answer

2 columns

question

After the closing entries have been posted, which of the following accounts would NOT have a balance

answer

Miscellaneous Expense

question

The transaction to record payment for delivery equipment that was purchased on account in the previous month would include

answer

debiting Accounts Payable and crediting Cash.

question

The depreciation system used by many businesses for tax purposes is the

answer

Modified Accelerated Cost Recovery System

question

The third pair of columns on a 10-column work sheet prepared at the end of the period would be the

answer

Adjusted Trial Balance columns.

question

Matching the cost of an asset with the revenue it is expected to produce is called

answer

depreciation.

question

Purchase invoices received from suppliers provide information about

answer

purchases of goods or services.

question

Because the first formal accounting record of a transaction is made in a journal from source document information, a journal is commonly referred to as a(n)

answer

book of original entry.

question

Every entry in the journal should include all of the following EXCEPT

answer

the balance of the accounts affected.

question

Net income is shown on the work sheet as a

answer

debit in the Income Statement column

question

Owner's equity can be increased through

answer

investments by the owner.

question

The journal entry to close expense accounts includes

answer

debiting Income Summary and crediting the expense accounts.

question

The body of the income statement consists of an itemized list of

answer

revenues and expenses.

question

The account to which revenue and expenses are closed is called

answer

Income Summary

question

Cash and other assets that will be converted into cash within one year or the normal operating cycle of the business, whichever is longer, are called

answer

current assets

question

Posting from the journal to the ledger does NOT involve which of the following steps

answer

Enter the description of the entry

question

The journal entry to close the income summary account (showing a profit) includes

answer

debiting Income Summary and crediting the owner's capital account

question

Receipt stubs, carbon copies of receipts, cash register tapes, or memos of cash register totals provide information about

answer

cash receipts

question

To record the purchase of assets on account under the modified cash basis of accounting method

answer

debit the asset and credit Accounts Payable

question

Instead of T accounts, businesses are more likely to use a

answer

four-column account.

question

To prove the equality of the debit and credit balances in the general ledger accounts after the closing entries have been journalized and posted, prepare the

answer

post-closing trial balance.

question

When assets are recorded at original value, they are recorded under the

answer

historical cost principle.

question

The journal entry to close the income summary account (showing a net loss) includes

answer

debiting the owner's capital account and crediting Income Summary

question

The steps involved in handling all of the transactions and events completed during an accounting period, beginning with placing data in a book of original entry and ending with a post-closing trial balance, are referred to collectively as

answer

the accounting cycle.

question

Check stubs and carbon copies of checks provide information about

answer

cash payments

question

A typical account number for a contra-account would be

answer

185.1

question

A balance sheet that groups similar items is called a(n)

answer

classified balance sheet.

question

Journalizing does NOT include

answer

posting the debits and credits to the accounts.

question

Service revenue received in cash is entered by

answer

debiting Cash and crediting Service Revenue

1 of

Unlock all answers in this set

Unlock answers

question

Which of the following steps of the accounting cycle are in the correct order

answer

prepare a trial balance, make adjustments, prepare financial statements

question

What is the purpose of the post-closing trial balance

answer

to prove the equality of the debit and credit balances in the general ledger accounts

question

The Item column in the general ledger is used for

answer

a description of special entries

question

The journal entry to close revenue accounts includes

answer

debiting the revenue accounts and crediting Income Summary

question

A chart of accounts does NOT include

answer

names of customers

question

Copies of sales tickets or sales invoices issued to customers or clients provide information about

answer

sales of goods or services.

question

When posting an adjusting entry to the general ledger, write

answer

"adjusting" in the Item column.

question

To record wages earned but not paid under the modified cash accounting method,

answer

no entry is required.

question

Cash is used to pay for a car for personal use by the owner. The transaction includes

answer

debiting Drawing and crediting Cash.

question

In completing the work sheet, what is the reason for adding the net income for the year to the Balance Sheet Credit column

answer

Owner's equity is not up-to-date

question

A net loss is shown on the work sheet as a(n)

answer

debit in the Balance Sheet columns.

question

If a business records revenues when earned, regardless of whether cash has been received, and records expenses when they are incurred, the accounting system is a(n)

answer

modified cash basis of accounting.

question

The time an asset is expected to last is called its

answer

useful life.

question

If the owner of a company invested cash in a business enterprise, the transaction would include

answer

debiting Cash and crediting Capital.

question

If cash is paid for office rent, the transaction includes

answer

debiting Rent Expense and crediting Cash

question

The steps in the journalizing process include all of the following EXCEPT

answer

enter the balance.

question

Changes in owner's equity that result from investments or withdrawals of assets by the owner are included in the

answer

statement of owner's equity

question

The fourth pair of columns on a 10-column work sheet prepared at the end of the period would be the

answer

Income Statement columns.

question

Supplies originally cost $500, but only $150 worth of supplies were used this period. The adjusting entry would be

answer

debit Supplies Expense, $150; credit Supplies, $150

question

An account used with a related account to bring about a decrease in the net amount of the two account balances is called a(n)

answer

contra-account

question

An asset cost $33,000. It has an expected useful life of 5 years and an expected salvage value of $3,000. Depreciation expense for the first year of the asset's life using the straight-line method is

answer

$6000

question

The simplest form of journal is one with

answer

2 columns

question

After the closing entries have been posted, which of the following accounts would NOT have a balance

answer

Miscellaneous Expense

question

The transaction to record payment for delivery equipment that was purchased on account in the previous month would include

answer

debiting Accounts Payable and crediting Cash.

question

The depreciation system used by many businesses for tax purposes is the

answer

Modified Accelerated Cost Recovery System

question

The third pair of columns on a 10-column work sheet prepared at the end of the period would be the

answer

Adjusted Trial Balance columns.

question

Matching the cost of an asset with the revenue it is expected to produce is called

answer

depreciation.

question

Purchase invoices received from suppliers provide information about

answer

purchases of goods or services.

question

Because the first formal accounting record of a transaction is made in a journal from source document information, a journal is commonly referred to as a(n)

answer

book of original entry.

question

Every entry in the journal should include all of the following EXCEPT

answer

the balance of the accounts affected.

question

Net income is shown on the work sheet as a

answer

debit in the Income Statement column

question

Owner's equity can be increased through

answer

investments by the owner.

question

The journal entry to close expense accounts includes

answer

debiting Income Summary and crediting the expense accounts.

question

The body of the income statement consists of an itemized list of

answer

revenues and expenses.

question

The account to which revenue and expenses are closed is called

answer

Income Summary

question

Cash and other assets that will be converted into cash within one year or the normal operating cycle of the business, whichever is longer, are called

answer

current assets

question

Posting from the journal to the ledger does NOT involve which of the following steps

answer

Enter the description of the entry

question

The journal entry to close the income summary account (showing a profit) includes

answer

debiting Income Summary and crediting the owner's capital account

question

Receipt stubs, carbon copies of receipts, cash register tapes, or memos of cash register totals provide information about

answer

cash receipts

question

To record the purchase of assets on account under the modified cash basis of accounting method

answer

debit the asset and credit Accounts Payable

question

Instead of T accounts, businesses are more likely to use a

answer

four-column account.

question

To prove the equality of the debit and credit balances in the general ledger accounts after the closing entries have been journalized and posted, prepare the

answer

post-closing trial balance.

question

When assets are recorded at original value, they are recorded under the

answer

historical cost principle.

question

The journal entry to close the income summary account (showing a net loss) includes

answer

debiting the owner's capital account and crediting Income Summary

question

answer

the accounting cycle.

question

Check stubs and carbon copies of checks provide information about

answer

cash payments

question

A typical account number for a contra-account would be

answer

185.1

question

A balance sheet that groups similar items is called a(n)

answer

classified balance sheet.

question

Journalizing does NOT include

answer

posting the debits and credits to the accounts.

question

Service revenue received in cash is entered by

answer

debiting Cash and crediting Service Revenue

Principles of Accounting Ch 8 – Flashcards

Unlock all answers in this set

Haven't found what you were looking for?

Search for samples, answers to your questions and flashcards