While you are still working, you should be managing your finances for retirement planning. Which of the following is not a goal of your retirement planning?

effectively passing wealth on to heirs More test answers on https://studyhippo.com/personal-finance-reading-check-1/

Which of the following terms applies to intellectually demanding tasks such as managing finances and paying bills?

Instrumental activities of daily living More test answers on https://studyhippo.com/lifespan-chapter-17-and-18/

Trade credit may be used to finance a major part of the firm’s working capital when

the firm extends less liberal credit terms than the supplier. More test answers on https://studyhippo.com/foundations-of-financial-mgmt-ch-8-2/

What are the three basic types of decisions addressed by the study of finance?

Capital budgeting decisions, capital structure decisions, and working capital management decisions More test answers on https://studyhippo.com/exam-1-practice-questions/

A financial executive devotes the most time to what aspect of finance?

working capital management More test answers on https://studyhippo.com/finance-ch-6/

10) Physical capital is purchased through investment spending, which in turn is mostly financed out of:

domestic and foreign savings. More test answers on https://studyhippo.com/econ-exam-3-54851/

When the finance department aims for a 3 percent increase in return on investment in three years, what type of goal is the organization setting?

a. a long-term goal b. a tactical goal c. a short-term goal dd. an intermediate goal e. an organizational goal More test answers on https://studyhippo.com/intro-to-business-5/

What types of assets should be financed with long-term financing?

Fixed assets and permanent current assets More test answers on https://studyhippo.com/finance-ch-6/

How was transcontinental railroad financed?

Privately- but not until Congress passed legistlation to finance it More test answers on https://studyhippo.com/big-business-apush-test/

What is the primary role of finance within health services?

to plan for, acquire, and utilize resources to maximize the efficient and value of the organization More test answers on https://studyhippo.com/chapter-1-introduction-to-healthcare-finance-chapter-2-healthcare-business-basics/

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Accounting Finance Intermediate Accounting 1 Managerial Accounting

Financial Accounting Chapter 5 Flashcard Answers 75 terms

William Jordan

75 terms

Preview

Financial Accounting Chapter 5 Flashcard Answers

question

Accounts Receivables

answer

The amount of cash owed to the company by it's customers from the sale of products or services on account

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Aging method

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Using a higher percentage for "old" accounts than for "new" accounts when estimating uncollectible accounts

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Allowance for uncollectible accounts

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Contra asset account representing the amount of accounts receivable that we do not expect to collect

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Allowance method

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Recording an adjustment at the end of each period to allow for the possibility of future uncollectible accounts. The adjustment has the effects of reducing assets and increasing expenses

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Average collection period

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Approximate number of days the average accounts receivable balance is outstanding. It equals 365 divided by the receivables turnover ratio

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Bad debt expense

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The amount of the adjustment to the allowance for uncollectible accounts, representing the cost of estimated future bad debts charged to the current period

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Contra revenue account

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An account with a balance that is opposite, or "contra," to that of its related revenue account

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Credit sales

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Transfer of products and services to a customer today while bearing the risk of collecting payment from that customer in the future. AKA sales on account or services on account

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Direct write-off method

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Recording bad debt expense at the time we know the account is uncollectible

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Net accounts receivable

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The difference between total accounts receivable and the allowance for uncollectible accounts

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Net realizable value

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The amount of cash the firm expects to collect

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Net revenues

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A company's total revenues less any discounts, returns and allowances

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Notes receivable

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Formal credit arrangements evidenced by a written debt instrument, or note

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Percentage-of-receivables method

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Method of estimating uncollectible accounts based on the percentage of accounts receivable expected not to be collected

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Receivables turnover ratio

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Number of times during a year that the average accounts receivable balance is collected (or "turned over"). It equals net credit sales divided by average accounts receivable

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Sales allowance

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Deller reduces the customer's balance owed or provides at least a partial refund because of some deficiency in the company's product or service

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Sales discount

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Reduction int he amount to be paid by a credit customer if payment on account is made within a specified period of time

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Sales return

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Customer returns a product

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Trade discount

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Reduction in the listed price of a product or service

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Uncollectible accounts

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Customers' accounts that are no longer considered collectible

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A company will debit __________ while recording a credit sale at the time of the transaction. Cash Accounts Receivable

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Accounts Receivable

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Accounts receivable originate from __________. Credit Sales Cash Sales

answer

Credit Sales

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A company makes a credit sale for $500. Future collection from the customer is reasonably certain. The company will record revenues from the transaction __________. At the time of the cash transaction Immediately

answer

Immediately

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A company performs a service on account. Recording a sale on account will include a credit to __________. Unearned Revenue Service Revenue

answer

Service Revenue

question

Which of the following are contra-revenue accounts? Sales Discounts Trade Discounts unearned Revenues Sales Returns

answer

Sales Discounts, Sales Returns (A contra-revenue account is an account with a balance that is opposite or "contra" to that of its related revenue account.

question

Which of the following accounts are recorded when a customer pays within the account period? Sales Discounts Service Revenue Cash Trade Discounts Accounts Recievable

answer

sales discounts, cash, accounts receivable (Think of the way in which the transaction would have been recorded at the time of preforming the service).

question

A company performs $1,000 worth of services on account on March 1, with the terms 2/10, n/30. The customer makes the payment on March 7. The receipt of payment will involve a: debit to cash for $1,000 credit to Accounts Receivable for $980 debit to Sales Discounts for $20 credit to Service Revenue for $980

answer

debit to Sales Discounts for $20 (Remember that contra-revenue accounts are used here.)

question

A company performs $1,000 worth of services account on March 1, with the terms 2/10, n/30. The customer makes the payment on March 27. The receipt of payment will involve a: credit to Accounts Receivable for $1,000 debit to cash for $980, credit to Sales Discounts for $20 credit to Service Revenue for $1,000

answer

credit to Accounts Receivable for $1,000 ( Remember that the customer is paying after the discount period.)

question

The balances in sales discounts, returns, and allowances are subtracted from total revenues when calculating net revenues. True False

answer

True, Sales discounts, returns, and allowances are contra revenue accounts. We subtract the balances in these accounts from total revenues when calculating net revenues.

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Which of the following represent a reduction in the listed price of a product or service? Sales discounts Sales returns Trade discounts Sales allowances

answer

Trade discounts (Think of a method used by companies to provide incentives to larger customers or consumer groups to purchase from the company.)

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How are trade discounts recognized? By using contra revenue accounts By recording the sale at the discounted price By debiting the Trade Discounts account By reducing them from total revenues at the end of the period

answer

By recording the sale at the discounted price (Think of an indirect way of recording.)

question

Outlook corporation performed event management services worth 1.5 million in 2011. of this, 400000 remains receivable at the end of the year. In previous years, approximately 10 percent of accounts receivable were not collected; Outlook corporation decides to base this years estimate on that same percentage using the percentage-of-receivables method. The year-end adjustment to allow for these future uncollectible accounts will include:

answer

A credit to Allowance for uncollectable Accounts for 40,000 A debit to Bad Debt Expense for 40,000 (notice that this adjustment involves an increase in expenses and an indirect decrease in assets.)

question

The percentage-of-receivables method is sometimes referred to as the __________ method, because we base the estimate of bad debts on an amount found in this particular financial statement. Income Statement Balance Sheet

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Balance Sheet

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__________ has a normal credit balance. Allowance for Uncollectible Accounts Bad Debt Expense

answer

Allowance for Uncollectible Accounts

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Under the allowance method, companies are required to estimate future uncollectible accounts and record those estimates in the current year. Estimated uncollectible accounts __________ expenses. Increase assets and reduce Reduce assets and increase

answer

Reduce assets and increase

question

Writing off an account receivable will include a: debit to Bad Debts Expense credit to Cash credit to Accounts Receivable credit to Allowance for Uncollectible Accounts

answer

credit to Accounts Receivable (Allowance for Uncollectible Accounts will be debited and Accounts Receivable will be credited to write off an accounts receivable.)

question

Beta Corporation wrote off $100,000 due from a specific client in March 2011. However, this client was able to make a Partial payment of $40,000 in June 2011. Recording this cash collection will involve all of the following accounts except: Bad Debt Expense Accounts Receivable Cash Allowance for Uncollectible Accounts

answer

Bad Debt Expense (This event only affects assets and contra assets.)

question

Collecting cash on an account previously written off increases total assets but has no effect on net income. True False

answer

False, Collecting cash on an account previously written off has no effect on total assets and no effect on net income.

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Writing off actual bad debts and reestablishing those previous write-offs when it appears that customers will pay has no effect on net accounts receivable. True False

answer

True, Think of the definition of net accounts receivable.

question

Flint Corporation has a debit balance of $2 million in its Allowance for Uncollectible Accounts before the year-end adjustment in 2012. Based on all available information at the end of 2012, Flint estimates that the allowance for uncollectible accounts should be $6 million. This can be accomplished with: credit to Allowance for Uncollectible Accounts for $8 million credit to Allowance for Uncollectible Accounts for $6 million credit to Allowance for Uncollectible Accounts for $4 million debit to Allowance for Uncollectible Accounts for $6 million

answer

a credit to Allowance for Uncollectible Accounts for $8 million (Think of the normal balance of Allowance for Uncollectible Accounts.)

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Pic for next 3 questions

answer

question

What would be the balance before the year-end adjustment in 2011 in the Allowance for Uncollectible Accounts?

answer

credit balance of $5 million

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What is the estimated ending balance for 2011 in the Allowance for Uncollectible Accounts?

answer

$16 million (Summing the estimated allowance for each age group results in a total estimated allowance of $16 million.)

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What is the amount of year-end adjustment required in the Allowance for Uncollectible Accounts?

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$11 million credit (Think of the amount needed to make up the difference in balance prior to adjustment and estimated ending balance for 2011.)

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Recording a write-off using the direct write-off method involves a debit to __________. Bad Debt Expense Allowance for uncollectible accounts

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Bad Debt Expense

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A company is using the __________, when it writes off an uncollectible amount with a debit to Allowance for Uncollectible Accounts and a credit to Accounts Receivable. Direct Write-Off Method Allowance Method

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Allowance Method

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The __________ is used for tax purposes but is generally not permitted for financial reporting. Direct Write-off method Allowance Method

answer

Direct Write-Off Method

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Under the __________, we make no attempt to estimate future bad debts. Direct Write-Off Method Allowance Method

answer

Direct Write-Off Method

question

On January 1, 2011, Data Corporation accepts a $10,000 three-month, nine percent promissory note from one of its customers. It will record this transaction with a _____. debit to Accounts Receivable for $10,000 debit to Notes Receivable for $10,000 credit to Service Revenue for $10,225 debit to Accounts Receivable for $10,225

answer

debit to Notes Receivable for $10,000 ( Think of the face value of the note and the type of asset.)

question

Beta Company performed $20,000 of services on account and recorded the amount due as a typical account receivable. Over time, it became apparent that the customer would not be able to pay quickly, so Beta required the customer to sign a six-month, 11 percent promissory note on February 1, 2012. The company then reclassified the existing account receivable as a note receivable. Which of the following will result from this action? Both assets and liabilities decrease Both assets and revenues decrease Revenues decrease and liabilities increase No impact on the accounting equation

answer

No impact on the accounting equation (Think about the type of accounts )

question

On January 1, 2011, Data Corporation accepts a $10,000 three-month, nine percent promissory note from one of its customers. How much interest will be collected at the maturity date of the note? $225 $900 $75 $450

answer

$225 (Multiply the face value with the interest percentage and the fraction of the year involved.)

question

On September 1, 2012, Dallas Corporation accepts a $30,000 six-month, 12 percent promissory note from one of its clients. The year-end adjustment to accrue interest revenue on December 31, 2012 will include a _____. $300 credit to Interest Revenue $1,800 credit to Interest Revenue $1,200 debit to Interest Receivable $1,800 debit to Interest Receivable

answer

$1,200 debit to Interest Receivable (Think about the number of months for which interest will accrue in 2012.)

question

On September 1, 2012, 2G Corporation accepts a $100,000 six-month, nine percent promissory note from one of its clients. The transaction recorded by the company on March 1, 2013, the maturity date, will involve all of the following except _____. debit to cash for $104,500 credit to Interest Receivable for $3,000 credit to Notes Receivable for $100,000 credit to Interest Receivable for $4,500

answer

credit to Interest Receivable for $4,500 ( Note that this note extends over two accounting periods. There will be a year-end adjustment before maturity.)

question

Company A and Company B operate in the same industry and region. Compared to Company B, Company A has a low receivables turnover ratio and a correspondingly high average collection period. From this information, we can conclude that Company A is managing its receivables better than Company B. True False

answer

False, Think of the time it takes for Company A to collect its receivables.

question

Net credit sales for Winner Company are $100,000 for the year. The accounts receivable account had a balance of $15,000 at the beginning of the year and $25,000 at the end of the year. What is the company's receivables turnover ratio? 2 5 4 0.2

answer

5 ,Remember to use average accounts receivable.

question

Net credit sales for Turner Company are $200,000 for the year and the average accounts receivable balance is $20,000. What is the company's average collection period? 5 days 548 days 54.8 days 36.5 days

answer

36.5 days , Average collection period = 365 ÷ 10 = 36.5 days.

question

The percentage increase in receivables for Petro Corporation is greater than the percentage increase in sales. Which of the following conclusions can be drawn from this information? The average collection period will increase The receivables turnover ratio for the company will increase The company's payment terms for customers is becoming very stringent The company will see a decrease in sales returns and bad debts

answer

The average collection period will increase ( Think of the impact on key ratios.)

question

On November 10 of the current year, Flores Mills provides services to a customer for $8,000 with credit terms 2/10, n/30. The customer made the correct payment on November 17. How would Flores record the collection of cash on November 17? a Cash 7840 Accounts Receivable 7840 b Cash 7840 Sales Discounts 160 Accounts Receivable 8000 c Cash 7840 Sales Revenue 160 Accounts Receivable 8000 d Cash 8000 Accounts Receivable 8000

answer

b Cash 7840 Sales Discounts 160 Accounts Receivable 8000

question

At December 31, Gill Co. reported accounts receivable of $238,000 and an allowance for uncollectible accounts of $600 (debit). An analysis of accounts receivable suggests that the allowance for uncollectible accounts should be 3% of accounts receivable. The amount of the adjustment for uncollectible accounts would be: $6,540. $7,800. $7,140. $7,740.

answer

$7,740. ($238,000 x 3%) + $600 = $7,740.

question

When $2,500 of accounts receivable are determined to be uncollectible, which of the following should the company record to write off the accounts using the allowance method? A debit to Bad Debt Expense and a credit to Allowance for Uncollectible Accounts. A debit to Allowance for Uncollectible Accounts and a credit to Bad Debt Expense. A debit to Bad Debt Expense and a credit to Accounts Receivable. A debit to Allowance for Uncollectible Accounts and a credit to Accounts Receivable.

answer

A debit to Allowance for Uncollectible Accounts and a credit to Accounts Receivable.

question

On September 1, 2012, Middleton Corp. lends cash and accepts a $1,000 note receivable that offers 12% interest and is due in six months. How much interest revenue will Middleton Corp report during 2013? $20. $40. $30. $60.

answer

20 Interest revenue = $1,000 x 12% x 2/12 = $20.

question

Sandburg Veterinarian reports the following information for the year: Net Credit Sales...... $120,000 Average accounts receivable..... 20,000 Cash collections on credit sales....... 100,000 What is Sandburg's receivables turnover ratio? a. 6.0 b. 5.0 c. 1.2 d. 0.2

answer

6.0 Net Credit Sales / Avg. A/R 120,000 / 20,000 = a. 6.0

question

A lower receivables turnover ratio generally indicates more favorable management of accounts receivable by company managers. True False

answer

False

question

Outdoor Expo provides guided fishing tours. The company charges $290 per person but offers a 10% discount to parties of four or more. Consider the following transactions during the month of May. May 2 Charlene books a fishing tour with Outdoor Expo for herself and four friends at the group discount price ($1,305 = $261 × 5). The tour is scheduled for May 7. May 7 The fishing tour occurs. Outdoor Expo asks that payment be made within 30 days of the tour and offers a 4% discount for payment within 15 days. May 9 Charlene is upset that no one caught a single fish and asks management for a discount. Outdoor Expo has a strict policy of no discounts related to number of fish caught. May 15 Upon deeper investigation, management of Outdoor Expo discovers that Charlene's tour was led by a new guide who did not take the group to some of the better fishing spots. In concession, management offers a sales allowance of 20% of the amount due. May 20 Charlene pays for the tour after deducting the sales allowance. Record the necessary transaction(s) for Outdoor Expo on each date.

answer

May 2 she is just booking so no entry required May 7 Debit accounts receivable for trade discount (1305) and credit Tour Revenue because this is when the tour occurs. May 9 She is just upset nothing required May 15 Debit Sales allowance (.20 x 1305=261) and credit accounts recievable (261) because you are going to recieve less money. May 20 She is actually paying so credit accounts receivable for the amount owed minus the sales allowance (261) -she no longer owes. Then debit sales discounts and cash together because sales discounts is a contra-asset. sales discounts should be .04 x 1044=42, and the rest is cash. so 42-1044 is 1002. Debit cash 1002. Everything balances out.

question

May 2 Charlene books a fishing tour with Outdoor Expo for herself and four friends at the group discount price ($1,305 = $261 × 5). The tour is scheduled for May 7. May 7 The fishing tour occurs. Outdoor Expo asks that payment be made within 30 days of the tour and offers a 4% discount for payment within 15 days. May 9 Charlene is upset that no one caught a single fish and asks management for a discount. Outdoor Expo has a strict policy of no discounts related to number of fish caught. May 15 Upon deeper investigation, management of Outdoor Expo discovers that Charlene's tour was led by a new guide who did not take the group to some of the better fishing spots. In concession, management offers a sales allowance of 20% of the amount due. May 20 Charlene pays for the tour after deducting the sales allowance. Calculate Net Sales...

answer

1002, it is what you received in cash back when it was paid on may 20th

question

answer

question

At the end of the year, Dahir Incorporated's balance of allowance for uncollectible accounts before adjustment is $1,400 (debit). The company estimates future uncollectible accounts to be $9,200. What is the adjustment Dahir would record for allowance for uncollectible accounts?

answer

You need to add last years unpaid amounts (1400) to the future estimated unpaid amount (9200) 1400+9200=10600. this is the total amount that is estimated not to be paid when you start out in the next year. So you debit bad debt expense for 10600 and credit allowance for uncollectible accounts (what someone will owe you, but probably not pay) for 10600.

question

At the beginning of the year, Mitchum Enterprises allows for estimated uncollectible accounts of $13,000. By the end of the year, actual bad debts total $16,400. Record the write-off to uncollectible accounts.

answer

Debit Allowance for uncollectible amounts for 16400 because you just found out that the person cant pay 16,400 for sure. Credit accounts recivable for 16,400 because you are reducing the amount you will recieve from this customer in the future. (you know for sure he/she is not paying because of the actual bad debts info)

question

At the beginning of the year, Mitchum Enterprises allows for estimated uncollectible accounts of $13,000. By the end of the year, actual bad debts total $16,400. Following the write-off, what is the balance of allowance for uncollectible accounts? Debit balance should be indicated by a minus sign.

answer

Allowance for uncollectable amounts debit -3400 13,000 (current year estimate) minus 16,400 (the actual bad debts) is -3400.

question

At the end of the year, Mercy Cosmetics' balance of allowance for uncollectible accounts is $500 (credit) before adjustment. The balance of Accounts Receivable is $20,000. The company estimates that 15% of accounts will not be collected over the next year. What adjustment would Mercy Cosmetics record for allowance for uncollectible accounts?

answer

Debit Bad debt expense 2500 Credit Allowance for uncollectible accounts 2500 Bad debts = $(20,000 × 15%) - $500 = $2,500

question

At the end of the year, Dahir Incorporated's balance of allowance for uncollectible accounts is $2,000 (credit) before adjustment. The company estimates future uncollectible accounts to be $10,000. What adjustment would Dahir record for allowance for uncollectible accounts?

answer

Bad debts = $10,000 - $2,000 = $8,000 Debit 8000 to Bad Debt Expense Credit 8000 to Allowance for uncollectible accounts

question

Barnes Books allows for possible bad debts. On May 7, Barnes writes off a customer account of $5,300. On September 9, the customer unexpectedly pays the $5,300 balance. Record the cash collection on September 9.

answer

you need to do two entries. 1. Debit accounts recievable 5300, and Credit allowance for uncollectable amounts 5300. The first entry reverses a portion of the previous entry that the customer made on May 7 to write off the account. 2.Debit Cash 5300 (he unexpectantly payed), and Credit Accounts receivable 5300 (he doesnt owe anymore). The second entry records the collection of the account receivable.

question

On December 1, 2012, Liang Chemical provides services to a customer for $106,800. In payment for the services, the customer signs a three-year, 12% note. The face amount and all interest are due at the end of the third year. Record the acceptance of the note on December 1, 2012.

answer

Debit Notes Recievable for 106,800 and Credit Service Revenue for 106,800.

question

answer

Find out how much interest for the time period from Decemnber 1 to December 31 (106800 x .12 x 1/12)=1068 Find out how much for the next two years (106800 x .12)=12816

question

answer

You are recieving cash so you need to debit cash for the total amount. Since the person is paying, you need to credit interest recievable-interest owed, interest revenue (you have some more for 11 more months, the period from dec 31 2014 to dec 1 2015, 106800 x .12 x 11/12=11748) , and notes recievable-the origonal amount owed.

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Accounting Finance Financial Accounting

ACC Test 2 – Flashcards 43 terms

Ben Stevenson

43 terms

Preview

ACC Test 2 – Flashcards

question

Investments in debt and equity securities acquired principally for the purpose of selling them in the near term and thereby generating profits on short run fluctuations in market prices.

answer

Trading investment (securities)

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Investments in debt securities acquired with the positive intent and ability to hold them to maturity.

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Held-to-maturity Securities

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Investments in debt and equity securities that do not qualify as one of the other types of investments in these securities.

answer

Available-for-sale Securities

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Unrealized ( Gain / Loss )? Market value > Cost

answer

gain

question

Unrealized ( Gain / Loss )? Market Value < Cost

answer

loss

question

Classified as current assets for balance sheet purposes. Recorded on the balance sheet at market value. Unrealized gains/losses are reported on the income statement. a) Trading Investment (securities) b) Held-to-maturity Securities c) Available-for-sale Securities

answer

question

Classified as long-term assets unless they mature in the coming year, in which case they are classified as current assets. Recorded on the balance sheet at an amount based on cost. a) Trading Investment (securities) b) Held-to-maturity Securities c) Available-for-sale Securities

answer

question

Classified as either current or long-term assets depending on the length of time that management intends to hold these securities. Recorded on the balance sheet at market value. Unrealized gains/losses are reported on the balance sheet. a) Trading Investment (securities) b) Held-to-maturity Securities c) Available-for-sale Securities

answer

question

Recorded on the balance sheet at market value. Unrealized gains/losses are reported on the income statement. a) Trading Investment (securities) b) Held-to-maturity Securities c) Available-for-sale Securities

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question

Recorded on the balance sheet at an amount based on cost. a) Trading Investment (securities) b) Held-to-maturity Securities c) Available-for-sale Securities

answer

question

Recorded on the balance sheet at market value. Unrealized gains/losses are reported on the balance sheet. a) Trading Investment (securities) b) Held-to-maturity Securities c) Available-for-sale Securities

answer

question

Monetary Claims to customer purchases made on account. a) Accounts Payable b) Accounts Receivable c) Notes Payable

answer

question

bad debt expense is recorded when the customers' account is determined to be worthless and there is no longer a need for an account balance for that customer. a) Direct Write-off method b) Allowance Method

answer

question

records bad debt expense by estimating uncollectible accounts at the end of the accounting period and recording an adjustment. Since the reduction in accounts receivable is an estimate, the specific customer account can't be reduced or adjusted. Instead, a contra-asset account, Allowance for Doubtful Accounts, is used a) Direct Write-off method b) Allowance Method

answer

question

There are _______ methods of accounting for uncollectible account expense, doubtful-account expense, or bad debt expense. a) 1 method b) 2 methods c) 3 methods d) 4 methods

answer

question

An effective system of internal control has all of the following characteristics except: A. separation of duties B. combination of duties C. competent, reliable, and ethical personnel D. documents and records

answer

question

Which of the following does not require a journal entry for a bank reconciliation? A. collection by the bank of a note receivable B. bank service charge C. outstanding checks D. NSF check returned by the bank

answer

question

Susan Bingham, a valued employee for more than 20 years, purchases supplies for Mack Company and stores them in a locked room for which she has the key. She is also responsible for distributing these supplies to employees upon request. At the end of the month, Susan takes an inventory of the supplies on hand and notifies the accounting department of the amount for the adjusting entry for supplies used. What (if any) internal control characteristic is missing? A. competent, reliable, and ethical employees B. assignment of responsibilities C. separation of duties D. use of prenumbered documents

answer

question

The category of "trading securities" includes A. debt securities but not equity securities. B. equity securities but not debt securities. C. both debt and equity securities. D. neither debt nor equity securities.

answer

question

Are unrealized gains and losses included in the calculation of net income for trading securities and available-for-sale securities? Trading securities Available-for-sale securities A. Yes No B. Yes Yes C. No No D. No Yes

answer

question

An investment which is properly classified as a trading security was purchased in April of the current year for $20,000. Between April and the end of the current year the market price of the investment dipped as low as $19,500 and reached a high of $26,300. On December 31, its market price was $25,800. At what amount should this investment be reported on the December 31 balance sheet? A. $19,500 C. $25,800 B. $20,000 D. $26,300

answer

question

Changes in market value generally are ignored for investments classified as A. available-for-sale securities. C. trading securities. B. held-to-maturity securities. D. both A. and B.

answer

question

The journal entry in which Uncollectible Accounts Expense is debited and Allowance for Uncollectible Accounts is credited is A. prepared prior to the time a particular account is actually deemed to be uncollectible. B. needed to report receivables at their net realizable value. C. frequently determined on the basis of a percentage of sales revenue. D. all of the above.

answer

question

Under the allowance method, which of the following best describes the journal entry used to write off an uncollectible account receivable? A. Dr. Uncollectible Account Expense Cr. Allowance for Uncollectible Accounts B. Dr. Allowance for Uncollectible Accounts Cr. Accounts Receivable C. Dr. Uncollectible Account Expense Cr. Unearned Revenue D. Dr. Accounts Receivable Cr. Uncollectible Account Expense

answer

question

All of the following statements pertaining to the allowance for uncollectible accounts are true, except one. Which of the statements is the false statement? A. The allowance is closed to Retained Earnings at the end of the period. B. The allowance could have either a debit balance or a credit balance before making the related end-of-period adjusting entry. C. The allowance decreases when an account receivable is written off as uncollectible. D. The allowance is used on the balance sheet to report accounts receivable at their net realizable value.

answer

question

Which of the following statements is true? A. Bad debt expense should be recorded in the period that the account is written off. B. Bad debt expense should never be recorded. C. Bad debt expense should be recorded in the period that the account receivable would have been collected. D. Bad debt expense should be recorded in the period of the original sale.

answer

question

Under the allowance method, the entry to record bad debt expense has what effect on the financial statements? A. Increases expenses and increases owners' equity B. Decreases owners' equity and decreases assets C. Decreases assets and has no effect on net income D. Decreases net income and increases liabilities

answer

question

On August 1, 20x1, Andover Company sold equipment and accepted an 8-month, 7%, $6,000 note receivable. Andover's year-end is December 31. How much interest should Andover accrue on December 31, 20x1? A. $210 C. $175 B. $420 D. some other amount

answer

question

On August 1, 20x1, Andover Company sold equipment and accepted an 8-month, 7%, $6,000 note receivable. Andover's year-end is December 31. If Andover Company fails to make an adjusting entry for the accrued interest, A. net income will be overstated and liabilities will be understated. B. net income will be overstated and assets will be understated. C. net income will be understated and liabilities will be overstated. D. net income will be understated and assets will be understated.

answer

question

On August 1, 20x1, Andover Company sold equipment and accepted an 8-month, 7%, $6,000 note receivable. Andover's year-end is December 31. How much interest does Andover Company expect to collect on the maturity date (April 1, 20x2)? A. $420 C. $105 B. $280 D. some other amount

answer

question

On August 1, 20x1, Andover Company sold equipment and accepted an 8-month, 7%, $6,000 note receivable. Andover's year-end is December 31. Which of the following accounts will be credited in the journal entry on April 1, 20x2, assuming collection in full? A. Interest Receivable C. Interest Revenue B. Note Receivable D. All of the above

answer

question

On a statement of cash flows, interest collected on accounts and notes receivable is classified as A. an operating activity. C. a financing activity. B. an investing activity. D. a bribe.

answer

question

Cosmos Company receives a two-month, 8%, $1,500 note receivable on December 15. The adjusting entry on December 31 will: A. debit Cash, $20 B. credit Interest Revenue, $5.26 C. debit Interest Revenue, $5.26 D. credit Interest Receivable $20

answer

question

Accounts Receivable has a debit balance of $2,300, and the Allowance for Uncollectible Accounts has a credit balance of $220. A specific account of $80 is written off. What is the amount of net receivables (net realizable value) after the write-off? A. $2,080 C. $1,920 B. $2,220 D. $2,160

answer

question

Ray Company had the following information relating to credit sales in 20X3: Accounts receivable 12/31/X3 (debit) $ 8,000 Allowance for uncollectible accounts 12/31/X3 (credit) $750 Credit sales during 20X3 $38,000 Cash sales during 20X3 $12,000 Collections from customers on account during 20X3 $41,000 If uncollectible accounts are determined by the percentage-of-sales method to be 2% of credit sales, the uncollectible account expense for 20X3 would be: A. $1,000 C. $750 B. $760 D. $10

answer

question

Ray Company had the following information relating to credit sales in 20X3: Accounts receivable 12/31/X3 (debit) $ 8,000 Allowance for uncollectible accounts 12/31/X3 (credit) $750 Credit sales during 20X3 $38,000 Cash sales during 20X3 $12,000 Collections from customers on account during 20X3 $41,000 Using the percentage-of-sales method, what is the new adjusted balance in the Allowance account? A. $750 C. $1,750 B. $760 D. $1,510

answer

question

Ray Company had the following information relating to credit sales in 20X3: Accounts receivable 12/31/X3 (debit) $ 8,000 Allowance for uncollectible accounts 12/31/X3 (credit) $750 Credit sales during 20X3 $38,000 Cash sales during 20X3 $12,000 Collections from customers on account during 20X3 $41,000 If uncollectible accounts are determined by the aging-of-receivables method to be $1,140, the uncollectible account expense for 20X3 would be: A. $1,140 C. $390 B. $750 D. $760

answer

question

Ray Company had the following information relating to credit sales in 20X3: Accounts receivable 12/31/X3 (debit) $ 8,000 Allowance for uncollectible accounts 12/31/X3 (credit) $750 Credit sales during 20X3 $38,000 Cash sales during 20X3 $12,000 Collections from customers on account during 20X3 $41,000 Using the aging-of-receivables method, the balance of the Allowance account after the adjusting entry would be: A. $1,140 C. $390 B. $1,890 D. $750

answer

question

Ray Company had the following information relating to credit sales in 20X3: Accounts receivable 12/31/X3 (debit) $ 8,000 Allowance for uncollectible accounts 12/31/X3 (credit) $750 Credit sales during 20X3 $38,000 Cash sales during 20X3 $12,000 Collections from customers on account during 20X3 $41,000 Assuming the aging-of-receivables method is used, the net realizable value of accounts receivable on the 12/31/X3 balance sheet would be: A. $8,000 C. $6,110 B. $7,250 D. $6,860

answer

question

What is the maturity value of a $32,000, 12%, 75-day note? A. $32,000 C. $32,789 B. $35,840 D. $3,840

answer

question

If the adjusting entry to accrue interest on a note receivable is omitted, then: A. assets, net income, and stockholders' equity are overstated. B. assets, net income, and stockholders' equity are understated. C. liabilities are understated, net income is overstated, and stockholders' equity is overstated. D. assets are overstated, net income is understated, and stockholders' equity is understated. E. none of the above

answer

question

Net Sales are $600,000. Beginning and Ending Accounts Receivable are $52,000 and $38,000, respectively. Calculate days' sales in receivables. A. 32 days C. 43 days B. 23 days D. 27 days

answer

question

From the following list of accounts, calculate the quick ratio. Cash ..................................$ 3,000 Accounts Receivable ..............6,000 Inventory ....................................10,000 Prepaid Insurance ......................2,000 Accounts Payable ......................5,000 Salary Payable ......................2,000 Notes Payable (due in 2 years).....8,000 A. 3.0 C. .6 B. 1.3 D. 1.4

answer

STUDY

Finance Money Market Deposit Account Money Market Mutual Fund Personal Finance Personal Financial Planning

Supa personal finance ch 4 pretest – Flashcards 37 terms

Brooke Sharp

37 terms

Preview

Supa personal finance ch 4 pretest – Flashcards

question

One could expect to earn a higher rate of interest on a certificate of deposit than on a checking account.

answer

True

question

Saving accounts are sometimes referred to as demand deposits.

answer

False, time deposit.

question

Credit unions typically pay lower rates of return on savings than banks and commercial banks.

answer

False, pray higher interest rates, operation is more efficient.

question

There is a penalty for early withdrawal of funds from CDs purchased from brokerage firms.

answer

True

question

Investment accounts are insured up to $250,000 by the FDIC if purchased at an insured bank.

answer

False, only savings and checking

question

There are some limitations on check writing for both MMDAs and MMMFs.

answer

True

question

Savings and loan associations channel the savings of depositors primarily into automotive loans.

answer

False, mortgage loans

question

Credit Union members are expected to have some common bond.

answer

True, ex. Residency

question

Currently, the FDIC insures depositors funds up to $500,000 at member banks.

answer

False, funds only up to $250,000

question

Financial institutions expect demand deposits to remain on deposit for a longer period of time than time deposits.

answer

False, time deposits remain for a long time

question

If Suzie has $2,000 in checking, $50,000 in a money market account, and $75,000 in certificates of deposit (all individual accounts) at her local bank, her accounts would be completely insured through the FDIC.

answer

True

question

Debit and ATM card transactions are linked to your savings account.

answer

False, linked to checking account

question

Although there are no legal minimum balances for a checking account, many institutions impose their own requirement, often around $100, or else they will change a maintenance fee.

answer

False, around $500- $1,000, most $1,000

question

Internet-only banks typically pay lower interest rates on savings than traditional banks.

answer

False, internet more efficient, have a lot less overhead

question

Treasury bills are sold at a discount of their maturity value.

answer

True

question

If your bank states that it compounds monthly, the effective interest rate will be greater than the nominal interest rate.

answer

True

question

Compound interest means that a savings account earns interest on the interest previously earned.

answer

True

question

A certified check is a personal check that the bank guarantees the funds are available.

answer

True

question

What 3 factors typically influence the choice of what to maintain a checking account?

answer

Cost, convenience, and service offered

question

Janice Sanders plans on saving $12,000 for 3 years until she returns to college for her masters degree in personal finance planning. She would like to receive a fixed rate of return over that period. What type of savings vehicle would you recommend?

answer

A certificate of deposit

question

An savings and loan or credit Union that is a mutual association is owned by who?

answer

The depositor

question

Compared to other depository financial institutions, credit unions A. Are run to benefit their members B. Pay higher interest on savings C. Charge lower rates on loans D. All of these are true E. None of these are true

answer

question

The minimum denomination of treasury bills you can buy is ?

answer

$1,000

question

A(n) ? Is not an interest-bearing account.

answer

Checking account

question

Which of the following would be best suited to using an internet back? A. Nancy Johnson,a young business women who uses bank financing regularly for her business B. Milan Sosa, an older gentlemen who enjoys visiting his local banker C. Molly Peterson, a women who uses multiple bank services including a safe-deposit box D. Fred longoria, a man who used checking and savings but never goes to his bank E. All of these would be good candidates because the cost of internet banking is lower than other types of banks.

answer

question

Christina works at a company that offers direct deposit of her paycheck. This service is called A. An ATM service B. A FDIC service C. A money market service D. An electronic funds transfer E. An overdraft service

answer

question

The most important time for establishing a savings plan is to A. Set realistic goals B. Take advantage of compounding C. Establish a regular pattern of saving D. Keep it simple E. Try some gimmicks

answer

question

A lump sum deposit of $8,000 left in the bank for 1 year at 9%compounded annually will result in an ending balance of (select closets answer) A. $8,270 B. $8,520 C. $8,720

answer

question

If interest on a savings account is compounded semiannually, the effective rate of interest will be A. Higher than the nominal rate B. Lower than the nominal rate C. The same as the simple rate D. Equal to the nominal rate E. Lower than the simple rate

answer

question

Higher interest rates on certificates of deposit are associated with A. Higher account balances B. Shorter maturities C. Longer maturities D. A and b E. A and c

answer

question

Whenever you write a check or Maher a deposit, an entry should be made on your A. Deposit slip B. Checkbook ledger C. Check D. Atm account E. Personal check

answer

question

The interest on your series EE savings bonds A. Will be taxable every year as it accrues B. Will be subject to both federal and state income taxes upon redemption C. Is tax free of both local and state income taxes upon redemption

answer

question

If you write a check for an amount greater than your account balance, the result will be an ?

answer

Overdraft

question

When reporting errors or unauthorized transactions, it is best to notify your bank A. By telephone B. By letter, keeping a copy for your files C. By telephone and follow up with a letter and keep a copy for your files D. None of the above

answer

question

How long do you have to report an error or unauthorized transaction?

answer

60 days

question

A check you issued last week had been stolen. You can prevent it from being withdrawn from your account by an unauthorized person by A. Writing a new check B. Depositing the correct amount of money C. Requesting a stop payment D. Tearing up the check E. Properly endorsing the check

answer

question

A check you wrote to buy shoes last week has not yet been processed by the back. It is said to be A. Outstanding B. in transit C. Endorsed D. Certified E. Subtracted

answer

STUDY

Accounting Deliver The Message Finance Marketing Principles Of Marketing Research And Development Costs

Combo with "Public Relations Writing Midterm" and 3 others – Flashcards 81 terms

Aiden Boyd

81 terms

Preview

Combo with "Public Relations Writing Midterm" and 3 others – Flashcards

question

Public Relations is the business of

answer

generating goodwill toward and individual, cause, company or product.

question

Public Relations is the act of

answer

communicating what you are to the public.

question

Public Relations is activity, communication, press coverage

answer

that is designed to enhance the prestige or goodwill of a company.

question

PR is any activities or events

answer

that help promote a favorable relationship between a company and it's customers and prospects.

question

PR should influence the press to

answer

print stories that promote a favorable image of the company and it's products and services.

question

PR should communicate with various sectors

answer

of the public to influence their behavior, attitudes, opinions.

question

PR should plan

answer

an activity that thats meant to improve the projects organization's environment in order to improve project performance and reception.

question

Public Relations is Professional Services

answer

in promoting products by arranging opportunities for exposure in media.

question

Public Realtions is

answer

an effort to maintain mutual understanding between an organization and it's publics.

question

PR Is a promotion intended

answer

intended to create goodwill for a person or institution.

question

Press agentery

answer

provides the role of media exposure.

question

Promotion

answer

combines media exposure with persuasion.

question

Public Affairs

answer

government public relations.

question

Public Information

answer

federal governments replacement term for PR.

question

4 PR Models

answer

press agentry/publicity, public information, two way asymmetric and two way symmetric.

question

Press Agentry Model

answer

one sided propaganda

question

Public Information Model

answer

practitioner is a journalist and produces well balanced information to the public.

question

Two-way asymmetric model

answer

scientific persuaders

question

Two-way summetric

answer

mediators

question

The role of a public relations writer

answer

technician

question

4 Core Components of PR

answer

Research, Planning, Communication and Evaluation

question

PR writing is similar to Journ. in that

answer

both strive for accuracy/credibility

question

PR is different to Journ in that

answer

diff. objectives, audience selection, and variety of media channels

question

What tools are essential for PR work?

answer

Computer (desktop/laptop), reference library, search engines

question

All PR writing starts with what?

answer

a purpose and content of message

question

What is important in PR writing?

answer

Purpose, stratgey, medium, style and format

question

4 Basics of Communication

answer

Sender, Message, Channel, Receiver

question

Framing

answer

how journalists/editors focus on certain facts/themes to "frame" a story.

question

Diffusion and Adoption

answer

Awareness*, interest*, trial, evaluation, adoption

question

Factors in Persuasive Writing

answer

Audience Analysis, Source Credibility, Appeal to Self-Interest, Clarity of the Message Timing and Context, Symbols/Slogans/Acronyms, Semantics, Suggestions for Action, Content and Structure

question

Passive/Active Audience

answer

Passive-Inactive public-unaware of product/idea Active- Aware of product/idea/service

question

4 types of Endorsement

answer

1) proclamation by mayor, gov or pres 2) Media generated through reviews/blogs/news 3) Statements made by experts/credible sources 4)Statements made by celebs

question

Persuasion Propaganda Techniques

answer

Plain Folk, Testimonial, Bandwagon, Card stacking, transfer, cause and effect, personal attack, inference by association, testimonials

question

Other prop techniques

answer

plain folk, testimonials, transfer

question

Unethical in prop techniques

answer

emotive language (from fact to opinion), amphipoly, equivocation(ambiguous words)

question

Logical fallacies in prop techniques

answer

cause and effect, personal attack, bandwagon, inference by association

question

Ethics of Persuasion

answer

Don't lie/be false/be fake Don't deceive/ mis represent yourself as an "expert" Don't oversimplify complex issues Don't pretend certainty DO NOT advocate something you DO NOT believe in yourself

question

The Inverted Pyramid

answer

-Begins with the summary lead -Adds facts in a descending order of importance -Done so that the story may be edited to fit the available space by cutting off the end of the story; nothing of significance lost (depends on advertising)

question

The Summary Lead

answer

In the Inverted Pyramid Answers: -Who -What: usually most important -When -Where -Why -How OR known as the Summary Lead *Sometimes there is no how, or why Ex: "Columbia pictures announced today that it has signed Britney Spears to a three-film deal for $60 million each.

question

Hard Lead

answer

(Print) -Simple sentences -Active voice (paints picture with fewer words) -22 25 words maximum -most important is the who, what, where and start with that

question

Soft Lead

answer

(Electronic) -Simple sentences -active voice -18 to 20 words maximum -the first 2 to 3 words are thrown out -sometimes will have a second sentence

question

Why is writing for features different?

answer

You may not know what is going on until the end where as in public relations the point is to know what is going on at the beginning

question

Format for the News Release

answer

-Spacing: typed, double, standard 8 1/2 by 11 size paper -Paper: white, light gray or brown -Identification: yourself, contact, organization -Release date: "embargo date" don't broadcast before ___ (out of respect) -Margins: standard -Length: 1 page if you can, 2 pages is fine, 3 is a problem *Need to know who covers what/ have a interpersonal relationship *If they think anything is "cute" it will get thrown out! *Fax or email, figure out what particular person wants -Paragraphs: short, 3 sentences at maximum -Slug line: (more or ### or 30) -Suggested headlines: may be changed by copy header based on space but you should write one to get the reporters attention -Timing -Using Internet -Proofreading: Use programs such as writeright and spell check

question

What determines whether something is news worthy?

answer

-Impact: major announcement that affects an organization, its community, or society -Oddity: an unusual occurrence or milestone, such as the one-millionth costumer being signed on -Conflict: a significant controversy -Known principal: the greater the title of the individual making the announcement—prez---the greater the chance of the release being used -Proximity: how localized the release is or how timely it is, relative to the news of the day *Beyond these, human interest stories, which touch on an emotional experience, are regularly considered news worthy.

question

Fool Proof Formula for Writers

answer

1. The idea must precede the expression -Writing requires ideas and ideas require thoughts; think first 2. Don't be afraid of the draft 3. Simplify, Clarify -In writing, the simpler the better -They key to clarity is tightness; each word/passage/paragraph must belong 4. Must be aimed at particular audience

question

Difference between Journalist and Public Relations

answer

Journalists: objective point of view, have a formula PR: Different point of view, best light possible, use the formula of Journalists because it's a better chance that they will run the story just how we wrote it

question

Think

answer

A good writer must be able to ________.

question

Controlled and Uncontrolled

answer

2 Categories of PR Writing

question

Uncontrolled

answer

at the mercy of the media, example is a press realse

question

Controlled

answer

PSAs, Brochures, Ads

question

2 reasons for sendinguncontrolled

answer

gains credibility and is cheaper

question

Paid advertisement and Press Release

answer

Examples of controlled and uncontrolled

question

brochure, press release, fliers, advertorials, fact sheets

answer

Tools of PR writer

question

Well-written

answer

All forms of PR materials must all be ____________.

question

Persuade and Inform

answer

Two reasons for writing in PR

question

Medium is

answer

the message

question

Planning

answer

1st and most important stage in writing

question

Audience, message, content

answer

When researching, you must identify the ____, _____ and ____.

question

End users of your information People most effected

answer

Target Audience

question

Unbiased and trained in area

answer

Benefits of using a Moderator

question

Get info before starting

answer

Focus groups

question

Goal

answer

Broad

question

Objectives

answer

Concrete steps to reach goals

question

Audience and perceived needs

answer

How do you determine positioning of message?

question

Unaware, importance, can they do anything about it

answer

When/Why target audience might change mind

question

Lack of understanding

answer

PR v Journalism problems

question

AP style, deadlines, contact info, press releases

answer

How you can help PR and Journalism

question

Consequence, Interests, timeliness, proximity, prominence

answer

Characteristics to base news values on:

question

Hard news

answer

News of immediate importance

question

Soft News

answer

Passive news

question

Honesty, answering calls and on-record

answer

Guidelines dealing with media

question

Go to reporter, don't go over their heads

answer

Dealing with mistakes in news

question

Once per month

answer

How often do you update a media list?

question

Label, table of contents, news release, fact sheet, photos

answer

What all is in a press kit?

question

Publicity, Angle, Story

answer

What is a news release and what should it contain?

question

grab attention first 30 seconds, create lead, expand on lead, info decreasing in importance

answer

Leads:

question

Point of origin of release

answer

Dateline

question

Dateline

answer

Point of origin of release

question

1- introduce story 2- include why they should use your story 3- how you can be reached

answer

Pitch letters

question

Knowing audience

answer

What dictates content?

question

elaborate on read, think what reader wants to know, give facts

answer

Feature writing

STUDY

Finance

Quickbooks Chapter 3 – Flashcards 21 terms

Tilly Wilkinson

21 terms

Preview

Quickbooks Chapter 3 – Flashcards

question

To view the Check Register

answer

Click Check Register icon in banking section of Home Page/Choose which bank account (ex. 10100 Checking)

question

To view an individual check

answer

Open the Check Register/double click on the entry (When you double click on an item to see it's supporting documents, this is called the drill-down feature)

question

To view all payments to a company

answer

Display the Check Register/Click on one of the payments to the company of interest/QuickReport button/Enter Dates: All

question

To record nonsales receipts (deposit other than customer payment)

answer

Record Deposits icon in Banking section of Home Page 1. Record payment received but not yet deposited 2. Record the deposit

question

To use the Write Checks window to pay bills

answer

Banking section of Home page/click Write Checks icon/select desired bank account and date and put in who to pay and the amount/ (Check) Print Later to tell QB to record and print the check/on Expenses tab, choose appropriate account to record payment in correct account/ select Print if you want to print the check and enter the check number and OK/insert preprinted check forms of needed/Check style: Standard/Print company name and address/choose printer/Print/OK/Save and Close

question

To view a journal entry for a check recorded using a form

answer

Click on Reports in Icon bar/Accountant and Taxes/Journal (If DC on entry it will drill down to source document)

question

To reconcile a bank statement

answer

Click Reconcile icon from Banking section of Home page/Select Checking/etc. When reconciled, difference should equal zero

question

To view a bank reconciliation report later that has already been done

answer

Reports menu/Banking/Previous Reconciliation

question

To make changes to bank reconciliation

answer

Click Locate Discrepancies from Begin Reconciliation window or Display the check Register, then click the Cleared Status column until the appropriate status (cleared or uncleared) appears

question

To view online banking feature

answer

Select Banking from the Menu bar/Bank Feeds Center/select appropriate account/ Transaction List

question

To enter credit card charges in Quickbooks

answer

Banking section of Home Page Click Enter Credit Card Charges icon Select Purchase/Charge Choose who it is purchased from Enter date, amount & memo Select Expenses tab and enter account field choosing the correct amount Save and Close

question

From the Banking section of Home page, you can:

answer

Record deposits (cash flowing into the Checking account) Write checks (cash going out of the checking account) Print Checks Reconcile bank statements View Check Register Enter credit card charges

question

Deposits are additions to the Checking account. Two types of deposits according to Quickbooks:

answer

1. Payments from customers. (Enter these using the Customers section of the Home Page.) 2. Non-sales receipts (deposits other than customer payments) such as: (Enter these using the Banking section of the Home Page) Cash received from loans Investments from owners Interest earned Other income, such as rental income

question

Quickbooks provides two way to pay bills:

answer

One step approach to bill paying: 1. Record and pay the bill at the same time. The bill is paid when it is received. Two-step approach to bill paying: (will learn in Chapter 5) 1. Record the bill when it is received 2. Pay the bill later when it is due.

question

The one-step approach to paying bills can be used to pay: (Use the Write Checks window in Banking section of Home page for this approach)

answer

Expense such as rent, utilities, and insurance Non-Inventory items such as office supplies Services such as accounting or legal services

question

Two ways to enter information into Quickbooks: (When use form, QB automatically convert info into journal entry with debits and credits)

answer

1. Onscreen forms (like an onscreen check) 2. An onscreen Journal using debits and credits

question

Debit/Credit- Increase/Decrease - Accounting Rules

answer

Account Type: Debit/Credit: Effect on Balance: Asset Debit Increase Liability Credit Increase Equity Credit Increase Revenues (Income) Credit Increase Expenses Debit Increase

question

Bank Reconciliation

answer

process of comparing (reconciling) the bank statement with your accounting records for the Checking account.

question

Objectives of Bank Reconciliation

answer

1. Detect errors 2. Update our accounting records for unrecorded items listed on the bank statement (such as service charge)

question

Two Reasons for differences in bank statement and accounting records

answer

1. Errors- either bank errors or company errors 2. Timing differences such as... Deposits in transit- company has recorded deposits but bank has not Outstanding checks- checks company has written and recorded but bank has not yet recorded Unrecorded charges- charges bank has recorded but company has not yet such as service charges Interest earned on the account- interest bank has recorded but company has not yet recorded

question

Steps for using online banking with Quickbooks (Use Banking menu)

answer

1. Set up account for participating financial institution. 2. Enter transactions in QB and flag online payments. 3. Download transaction into the QB bank feeds center. 4. Match or add downloaded transactions into QB.

STUDY

Behind The Scenes Finance Look And Feel Memorize

Dallas HQ Practice – Flashcards 220 terms

Jazzlyn Sampson

220 terms

Preview

Dallas HQ Practice – Flashcards

question

How do you set up QB to automatically use discounts and credits?

answer

Choose Edit > Bills > Company Preferences, and then selected to automatically use discounts and credits

question

Suppose you have a sub-contractor who is 1099. Which list do add them too?

answer

Vendor List

question

What reason is there to use the Items tab when entering a bill?

answer

To assign a cost to a job or purchase inventory

question

What happens to inventory asset account when you enter a purchase order for inventory?

answer

No accounts are affected

question

When setting up a new company through the advanced detail set up, some info is optional and some is required. Which info is required by QB during the easy set up process?

answer

Company name

question

How do you set up multiple businesses in QB?

answer

Repeat the process of setting up new a company

question

During the advanced detail set up, you can turn on or off which features in the Easy Step Interview

answer

there are several features like sales tax, inventory, and progress invoicing

question

During the advanced detail set up, what dates should you use in the easy set up?

answer

The date you want to begin tracking company finances

question

Which can't be entered during the set up of a new company?

answer

Trial Balance

question

During advanced set up, how do you set up a new account in easy start-up?

answer

You can't

question

What does "double entry accounting" mean?

answer

always two account affected

question

After reconciliation, you notice QB calculated beginning balance different from the bank statement. What does this mean?

answer

someone deleted or altered previously cleared transaction

question

What basis do we view Financials?

answer

Cash and accrual

question

What are the accounts of P/L

answer

income, COGS and expenses

question

What report allows you to view changed transactions?

answer

Audit Trail report

question

How do you stop from editing transactions in a closed period?

answer

set up a closing date

question

What is equity

answer

Assets-Liab

question

How does QB use account type?

answer

To identify where the account is on the Finacials

question

What are the two main Financial statements?

answer

B/S and P/L

question

Purpose of Chart of Accounts?

answer

categorize financial transactions

question

When exporting reports to excel, which feature has the drop down list or each column?

answer

Auto filter

question

What happens when you QuickZoom on a number?

answer

shows more detail about the number in the report

question

What happens if you click a diamond on a report column?

answer

you can drag it to the right to make it bigger or to the left to make it smaller, if you drag it past the column, it hides completely.

question

What can you do in Reports and Graphs?

answer

change the summary basis for all reports, also you can change format option like fonts and colors and set which date to use for aging reports

question

How do you display batch/group reports quickly?

answer

Choose Preferences> process multiple reports

question

What options do you have to change a report when you click customize report?

answer

you can select display, filters, header & footer and fonts and number

question

How do you move columns in a report?

answer

Move cursor over column heading and click and drag column to desired postion

question

How to hide sub-account details in P/L?

answer

After running P/L, customize report, hide sub-account details

question

What does QB say when memorizing a report?

answer

report header, footer and columns but not the actual transaction

question

How to access reports in QB?

answer

report center

question

After exporting to excel, how import changes back to QB?

answer

you can't

question

What transactions make up the Vendor liabilities?

answer

Vendor balance detail

question

What happens when you click collapse on a report?

answer

it hides some accounts

question

How to create memorized reports?

answer

Open memorized report list, click memorized report, then new group

question

If you track Tax in QB, which category contain Sales Tax?

answer

Vendors and Payable

question

How to organize memorized reports?

answer

create a report group

question

Maximum names that can be included?

answer

14,500

question

What keyboard shortcut allows you to see a total for all four names list?

answer

question

What do diamonds mean on certain lists?

answer

You can click on the diamond and move the location

question

What happens when you add a new entry to the list?

answer

adds new entry at the top of the list

question

How to combine two entries?

answer

rename the unwanted list entry to match the name of the list you want to merge into

question

What does the bounced check function do?

answer

Records NSF check and bank charges related to it, all the invoices related to the check show as unpaid, marks customer window with a bounced check alert

question

When to create estimates in QB?

answer

create a code or proposal

question

When should you never delete a check?

answer

once its been issued and it has been used

question

How to accept vendor credit?

answer

enter a bill

question

How to tracks accounts payable in QB?

answer

enter bill and use pay bills window

question

How to enter transaction in QB?

answer

By filling out forms such as invoices, bills and checks

question

Which form to use to enter petty cash expenditure?

answer

enter petty cash

question

How to set up QB to use discounts and credits?

answer

Edit>Preferences>Bill>Company Pref>use discounts and credits

question

How do you switch to multimode

answer

File>switch to multi-user mode

question

What are the major QB editions

answer

QB online, Pro, Premier, Enterprise

question

When and why to restore data file from back up

answer

- review prior data, file damaged, computer crashed

question

If your computer crashes that houses QB data what would you do

answer

restore it from back up file

question

When would you enter a journal entry

answer

To correct an error, do an adjustment, record transaction/depreciation

question

How to restore a back up file

answer

File>open or restore a company>restore a backup file>choose local back up>select the file and open>save the file

question

What happens if debit and credit is not equal in a journal entry

answer

QB will not allow you to record the transaction

question

Which is a back up option in QB

answer

Manual backup, automatic backup, future/unattended backup. All of them

question

The fundamental accounting equation that governs all accounting is:

answer

Assets = Liabilities+ Equity

question

Which of the following statements is true? a) Debits are bad because they reduce income b) Equity is increased by a net loss. c) Debits- credits = 0. d) Assets are increased with a credit entry.

answer

Debits- credits = 0

question

Under accrual accounting: a) A sale is not recorded until the customer pays the bill. b) Income and expenses are recognized when transactions occurred. c) An expense is not recorded until you write the check. d) You must maintain two separate accounting systems.

answer

b) Income and expenses are recognized when transactions occurred.

question

QuickBooks is: a) A job costing system. b) A payroll system c) A double-entry accounting system d) all of the above

answer

d) All

question

Which is not a method of accessing the data entry screens? a) Menus b) Home page c) Icon bar d) Data entry button

answer

d) Data entry button

question

In the New Customer window, you will find everything except: a) Customer name b) Customer Invoice/ Bill To and Ship To address c) Customer active/inactive status d) Year-to-date sales information

answer

d) Year-to-date sales information

question

You should record a sales receipt when the customer pays: a) By cash, check, or credit card at the time of sale b) By cash, check, or credit card at the end of the month c) Sales tax on the purchases d) For the order upon receipt of Invoice

answer

a) By cash, check, or credit card at the time of sale

question

Which statement is false? a) Invoices are very similar to the Sales Receipt form. b) Invoices decrease Accounts Receivable. c) Sales Receipts have no effect on Accounts Receivables. d) Invoices should be created when customers are going to pay after the date of the initial sale.

answer

b) Invoices decrease Accounts Receivable.

question

You may specify payment Terms on the New Customer window; however: a) The payment Terms will only show on Sales Receipt transactions. b) The Terms can only be changed once a year. c) The sales representative must be informed. d) You are also permitted to override the Terms on each sale

answer

d) You are also permitted to override the Terms on each sale

question

Your company has just accepted a payment for an Invoice. What should you do in QuickBooks to record this payment? a) Open the Invoice by clicking the Invoices icon on the Home page. b) Create a sales receipt by clicking the sales receipt icon on the home page c) Make a deposit by clicking the Record Deposits icon on the Home page. d) Receive the payment by clicking the receive payments icon on the home page.

answer

d) Receive the payment by clicking the receive payments icon on the home page.

question

Which of the following options is not available on the Available Credit window? a) Give a refund. b) Retain as an available credit. c) Apply to an Invoice. d) Use with Receive Payments.

answer

d) Use with Receive Payments.

question

What is the best way to write off a bad debt? a) Delete the original Invoice. b) Create a Credit Memo using a Bad Debt item and apply the credit to the past due Invoice. c) Create a Credit Memo for the amount of the past due Invoice and retain the available credit. d) Any of the above.

answer

b) Create a Credit Memo using a Bad Debt item and apply the credit to the past due Invoice.

question

In which of the following situations would you create a Credit Memo? a) You need to record a cancelled order that has already been invoiced but not paid. b) A customer returns merchandise and wants the return credited to a future invoice. c) A customer requests a refund. d) Any of the above.

answer

d) Any of the above

question

The Credit Memo Number should be: a) The next number after the Credit Memo Number on the Credit Memo. b) The next number after the Invoice Number on the last Invoice, followed by a "C." c) Any unique number. d) The same number as the Invoice to which the Credit Memo is linked, followed by a "C."

answer

d) The same number as the Invoice to which the Credit Memo is linked, followed by a "C."

question

You may record payments to your vendors by: a) Recording a manual entry directly into the check register. b) Using Write Checks to write and print a check without using Accounts Payable. c) Using Enter Bills to record Accounts Payable and then using Pay Bills to pay open Bills. d) All of the above.

answer

d) All of the above.

question

To display the Vendor Center: a) Click Vendors on the QuickBooks Home Page. b) Click the Vendor Center icon on the Icon Bar. c) Select the Vendor menu and then select Vendor Center. d) a, b, or c.

answer

d) a, b, or c.

question

You can add a vendor: a) Only at the beginning of the fiscal year. b) Only if you will purchase over $600 from that particular vendor and a Form 1099 will be issued. c) Only at the beginning of the month. d) At any time by selecting New Vendor in the Vendor Center.

answer

d) At any time by selecting New Vendor in the Vendor Center.

question

Which statement is true? a) Quickbooks records each Bill Payment in a bank account register (or credit card account register) and the Accounts Payable register. b) Bill Payments increase the balance in both the Checking account and the accounts payable account. c) You should assign Jobs to all discounts taken. d) You cannot make partial payments on a Bill.

answer

a) Quickbooks records each Bill Payment in a bank account register (or credit card account register) and the Accounts Payable register.

question

Which QuickBooks feature allows you to separate your income and expenses by line of business, department, location, profit center, or any other meaningful breakdown of your business? a) Job costing. b) Class tracking. c) Customer types. d) Vendor types.

answer

b) Class tracking.

question

When the Beginning Balance field on the Begin Reconciliation window doesn't match the beginning balance on the bank statement, you should: a) Call the bank. b) Change the amount in QuickBooks to match the bank's amount. c) Click Locate Discrepancies in the Begin Reconciliation window. Click Discrepancy Report and/or Previous Reports to research what has been changed since the last reconciliation. Then fix the problem before reconciling, d) Select the Banking menu and then select Enter Statement Charges.

answer

c) Click Locate Discrepancies in the Begin Reconciliation window. Click Discrepancy Report and/or Previous Reports to research what has been changed since the last reconciliation. Then fix the problem before reconciling,

question

Which statement is false? a) You can enter bank service charges using Enter Statement Charges. b) You can enter bank service charges on the Begin Reconciliation window. c) You can enter bank service charges using the Splits button on a register transaction. d) You can enter bank service charges using Write Checks before you start your reconciliation.

answer

a) You can enter bank service charges using Enter Statement Charges.

question

When you find an erroneous amount on a transaction while reconciling, correct the amount by: a) Selecting the Banking menu and then selecting Correct Error. b) Double-clicking on the entry and changing the amount on the transaction. c) Selecting the entry in the Reconcile window, then clicking Go To and changing the amount on the transaction. d) Performing either b or c.

answer

d) Performing either b or c.

question

To properly record a voided check from a closed accounting period: a) Delete the check in the register. b) Make a deposit in the current period and code it to the same account as the original check you want to void. Then delete both transactions in the Reconciliation window. c) Find the check in the register, select the Edit Menu, and then select Void Check. d) Change the amount of the check to zero.

answer

c) Find the check in the register, select the Edit Menu, and then select Void Check.

question

Which of the following columns cannot be displayed in the Checks and Payments section of the Reconcile window? a) Check #. b) Class. c) Date. d) Payee.

answer

b) Class.

question

What are two major types of reports in QuickBooks?

answer

Accounting and Business Management.

question

Use the Customize Report button on any report to: a) Add or delete columns or change the accounting basis of the report. b) Change the width of columns on the report. c) Print the report on blank paper. d) Memorize the report for future use.

answer

a) Add or delete columns or change the accounting basis of the report.

question

You cannot create a QuickReport for: a) Customers. b) Vendors. c) Items. d) Incorrectly posted entries.

answer

d) Incorrectly posted entries.

question

To create a report that lists each of your vendors along with their address and telephone information: a) Display the Vendor Contact List. b) Open the Search window and do a search for vendors and the corresponding Address and Phone numbers. c) Customize the Vendor database. d) You must create a Modified Report to see this information.

answer

a) Display the Vendor Contact List.

question

In order to analyze the profitability of your company, you should: a) Only analyze if the company is profitable. b) Create a Profit and Loss report. c) Review all detailed transaction reports. d) Review the financial exceptions report.

answer

b) Create a Profit and Loss report.

question

You can create Custom Fields for: a) Customers. b) Templates. c) Vendors. d) Both a and c.

answer

d) Both a and c.

question

The two types of Preferences are:

answer

User and company preferences

question

If you don't see the Favorites menu in your menu bar, you can turn it on in the: a) Customize Templates window. b) Customize Icon Bar window. c) View menu. d) Windows menu.

answer

c) View menu.

question

Which of the following is not an available Template type in QuickBooks? a) Credit Memo. b) Statement. c) Check. d) Sales Receipt.

answer

c) Check.

question

If you pay sales tax to more than one agency, you should use which of the following Item types? a) Sales Tax Group. b) Group. c) Inventory Assembly. d) Subtotal.

answer

a) Sales Tax Group.

question

If your vendor ships more than your ordered on a Purchase Order (an over shipment), which of the following actions would not be appropriate? a) You could refuse the extra shipment and send it back to the vendor without recording anything in QuickBooks. b) You could receive the extra shipment using an Inventory Adjustment transaction. c) You could receive the extra shipment into Inventory and keep it (and pay for it). d) You could receive the extra shipment into Inventory, and then send it back and record a Bill Credit in QuickBooks.

answer

b) You could receive the extra shipment using an Inventory Adjustment transaction.

question

When setting up a Group Item, where do you enter the sales price? a) Enter the price in the Sales Price field. b) Enter the price in the Item Pricing list. c) The Group Item does not include a Sales Price field. d) Enter the price in the Set Price window.

answer

c) The Group Item does not include a Sales Price field.

question

To activate QuickBooks Inventory: a) Select File menu and then select Preferences. b) Select Purchases - Vendors. c) Consult your accountant to determine the proper inventory valuation method. d) Select the Edit menu, then select Preferences, then click on the Items & Inventory Preference and then click the Company Preferences tab. Finally, click on the option that activates Inventory.

answer

d) Select the Edit menu, then select Preferences, then click on the Items & Inventory Preference and then click the Company Preferences tab. Finally, click on the option that activates Inventory.

question

The Inventory asset account: a) Tracks open Purchase Orders of Inventory Items. b) Decreases when Inventory is purchased. c) Increases when Inventory is sold. d) Increases when Inventory is purchased.

answer

d) Increases when Inventory is purchased.

question

In QuickBooks Pro, Premier, and Accountant, Inventory can do all of the following except: a) Provide reports on the status of each item in inventory including how many are on hand and how many are on order. b) Use the LIFO or FIFO method of determining Inventory cost. c) Calculate gross profit on Inventory sold. d) Track the open Purchase Orders for every Inventory item.

answer

b) Use the LIFO or FIFO method of determining Inventory cost.

question

In QuickBooks you are allowed to pass through billable expenses to customers: a) Only if you paid by credit card. b) If you paid by check or credit card, but you don't assign the Customer or Job to the expense. c) If you used a Bill, Check, or Credit Card Charge and assign the Customer or Job to which the expense applies. d) None of the above.

answer

c) If you used a Bill, Check, or Credit Card Charge and assign the Customer or Job to which the expense applies.

question

Which account types can be used in the expense tab of a purchase transaction to make the expense Billable? a) Cost of Goods Sold b) Expense c) Other Expense d) All of the above

answer

d) All of the above

question

If you want to assign expenses to a Customer:Job, but do not want to pass them through for reimbursement, do the following in a purchase transaction: a) Do not assign the Customer:Job; just enter the information in the Memo field. b) Assign the Customer:Job, and then click the checkbox in the Billable column to remove the checkmark. c) Delete the Invoice icon. d) a or b.

answer

b) Assign the Customer:Job, and then click the checkbox in the Billable column to remove the checkmark.

question

Which of the following tabs appear in the Choose Billable Time and Costs window: a) Items. b) Expenses. c) Time. d) All of the above.

answer

d) All of the above.

question

In an Invoice, you can automatically markup the pass-through expenses using the Markup Account option. It is available in the Choose Billable Time and Costs window on the: a) Items tab. b) Expenses tab. c) Time tab. d) All of the above.

answer

b) Expenses tab.

question

An easy and convenient way to process Payroll in QuickBooks for Employees on different Payroll schedules would be to: a) Move all Employees onto a single schedule b) Use the Payroll Schedule function in QuickBooks c) Outsource Payroll d) Make all Employees independent contractors

answer

b) Use the Payroll Schedule function in QuickBooks

question

Which of the following Payroll periods is not an option in QuickBook? a) Quarterly b) Biweekly c) Daily d) Semiannually

answer

d) Semiannually

question

Which Payroll Item cannot be created in the Payroll Setup Interview: a) Commissions b) Bonus c) Medical Insurance Deduction d) You can create all Items above during the Payroll Setup Interview

answer

d) You can create all Items above during the Payroll Setup Interview

question

Which is not an option when setting the accrual period for sick and vacation time? a) Beginning of the year b) Every month c) Every paycheck d) Every hour on paycheck

answer

b) Every month

question

The Payroll Setup Interview will not allow you to: a) Edit the default name for Payroll Items b) Associate deduction and withholding Items with Vendors c) Set the pay rate for an Employee d) Add two Employees with exactly the same name

answer

d) Add two Employees with exactly the same name

question

To properly affect the Payroll Items, which function (from the Employee section of the Home page) should you use to pay the Payroll taxes? a) Write Checks b) Pay bills c) Pay Employees d) Pay Liabilities

answer

d) Pay Liabilities

question

Voucher style checks, when used for processing Payroll, may contain: a) Earnings and tax withholdings b) Adjustments to net pay c) Federal filing status d) All of the above

answer

d) All of the above

question

The Payroll Liability Balances Report Identifies:

answer

Liability amounts by Payroll Item

question

Which statement is true? a) You can print pay stubs at any time. b) Pay stubs print two per page. c) If you find an error in a past paycheck, you should delete and recreate the paycheck to ensure accuracy. d) You cannot void a paycheck

answer

a) You can print pay stubs at any time.

question

To begin processing your Payroll: a) Select Write Checks from the Home page b) Select the Employees menu and then select Pay Scheduled Liabilities c) Select the Payroll menu and then select Process Payroll d) Choose Pay Employees from the Employees section of the Home page

answer

d) Choose Pay Employees from the Employees section of the Home page

question

Your company has decided to begin using QuickBooks at the beginning of the 2018 calendar year, which is also the fiscal year. The best start date for your company file setup is: a) January 1, 2018 b) The date when you first decide to use QuickBooks. c) December 31, 2017 d) There is no best start date, you can use whatever date is convenient.

answer

c) December 31, 2017

question

This chapter suggests that the best way to set up A/R and A/P balances in QuickBooks is to: a) Enter the total amount of A/R and A/P on a General Journal Entry dated on your start date. b) Enter the balance of each account by editing the accounts in the Chart of Accounts. c) Use a special account called A/R Setup to record the opening balances. d) Enter a separate novice for each open invoice and enter a separate for each unpaid bill.

answer

d) Enter a separate novice for each open invoice and enter a separate for each unpaid bill.

question

Setting up a company file does not include: a) Obtaining a business license. b) Selecting the appropriate chart of accounts for your type of business. c) Adding accounts to the chart of accounts. d) Entering Invoices.

answer

a) Obtaining a business license.

question

A good example of a liability account is: a) Inventory. b) Accounts Receivable. c) Advertising. d) Accounts Payable.

answer

d) Accounts Payable.

question

To ensure the accuracy of the information entered during setup, it is important to: a) Know your Retained Earnings. b) Verify that your Trial Balance matches the one provided by your accountant. c) Start at the beginning of the fiscal period. d) Know everything there is to know about accounting.

answer

b) Verify that your Trial Balance matches the one provided by your accountant.

question

Which of the following tasks does QuickBooks perform automatically at year-end? a) Creates adjusting journal entries to the income and expenses accounts that can be viewed in the General Ledger report b) Identifies expenses that are too high in comparison with prior years c) Adjusts the balance in the Retained Earnings account to reflect the net income or loss for the year d) Automatically backs up the data file

answer

c) Adjusts the balance in the Retained Earnings account to reflect the net income or loss for the year

question

Entering a date in the Closing Date field accomplishes which of the following: a) Determines which date QuickBooks will use to automatically close the year b) Determines which date QuickBooks closes your file c) Locks the data file so that no unauthorized users can add, change, or delete transactions datum on or before closing date d) Prepares a closing entry on that date

answer

c) Locks the data file so that no unauthorized users can add, change, or delete transactions datum on or before closing date

question

Voiding and Deleting transactions both do the following: a) Keep a record of the date, number, and detail of the transaction b) Completely remove all details of the transaction c) Zero out the debits and credits specified by the transaction d) both b and c

answer

c) Zero out the debits and credits specified by the transaction

question

To make an adjustment to Items as well as their associated accounts, create a: a) General Journal Entry b) Fixed Asset c) Zero-Dollar Check d) Memorized Transaction

answer

c) Zero-Dollar Check

question

At the end of the year, you should perform the following: a) Enter depreciation entries b) Perform a physical inventory c) If your business is a partnership, enter a General Journal Entry to distribute net income for the year to each of the partner's capital accounts. If your business is a sole proprietorship, enter a General Journal Entry closing Owner's Draw and Owner's Investments into Owner's Equity d) All of the above

answer

d) All of the above

question

Which statement is true for customer statements? a) provides summary of all accounts receivable activity for a customer b) statement are not available in QB c) Automatically assess and calculate finance charges for overdue accounts without any user intervention d) should only be created and mailed if the overdue balance is over $500

answer

a) provides summary of all accounts receivable activity for a customer

question

What happens when you press F2 in QB

answer

It opens product information window which includes version and company file information

question

If you choose to remove transactions as of a specific date from the "Condense Data" window, what does QB do?

answer

Removes all the transactions while leaving lists, preferences and service subscriptions intact.

question

What item type you use for inventory that you assemble from other items and then sell?

answer

Inventory assembly

question

If you associate a service item with two accounts, how does QB know which account to use on a transaction?

answer

When an item is on sales form it uses a/c under sales information in the item setup and when it is on purchase form, it uses the a/c under purchase information. You can setup tow different a/c to affect sales and purchase forms

question

For a bakery selling cup cakes the ingredients used to make cup cakes (flour, sugar, eggs..) and they use expense tab to assign the COGS. You need to setup an item for cakes. What item should you use?

answer

Non-inventory part

question

You own a company that repairs cars. What item type should you use for car repairs?

answer

Service

question

Which statement is true for items? a) you can use one item to represent different services or goods. b) Items allow you to track your sales in more detail without cluttering your chart of accounts or profit and loss c) to create an invoice d) All of the above

answer

d) All of the above

question

What are the benefits of using items?

answer

You can track actual quantity, saves time by automatically entering price and description on forms, allow to track more detail.

question

Which is not an item type? a) Inventory part b) Service c) Non-Inventory Part d) Incom

answer

d) Income

question

What a/c is affected when you sell an item?

answer

The account you selected when you set up the item

question

Which of the following payroll services are available with QB?

answer

Basic, Enhanced, Assisted

question

What form you must give to an employee?

answer

question

When printing paychecks, what is the preferred check style to give an employee a paystub?

answer

Voucher style

question

How does entering time for a job affect job cost report?

answer

Entering just time does not affect job cost reports

question

What are the first two steps to set up payroll in QB?

answer

question

What report should you use to help you complete the state unemployment tax form?

answer

Employee state taxes detail

question

How do you track sick or vacation time in QB?

answer

When you set up employee define how QB should accrue time, set up a sick or vacation wage item and pay an employee with sick or vacation wage item

question

Why you must set up deposit frequencies for the taxes or deductions your company has to pay (payroll liabilities)

answer

So that payroll liabilities show up in the pay taxes and other liabilities list in the payroll center

question

When should you use write checks to pay payroll liabilities so your payroll reports are accurate?

answer

You should not, always use pay employees from the employees menu

question

Why payroll info tab is important when setting up a new employee?

answer

Whatever is enter here affects pay check, unless you change the information on the paycheck itself.

question

When do you use the expense tab on a payroll liability check?

answer

To enter late fees, penalties or interest as they don't affect the actual liability

question

How to customize estimates so it looks similar to your customized invoice in QB?

answer

Lists>Templates>select the form you want to duplicate> then click templates button and select duplicate. Then select the type of template you want to create with the same look, in this case, estimate.

question

You customized the invoice but QB is still showing the default invoice . How do you fix it?

answer

On the invoice, click the template drop down arrow and select your customized invoice.

question

What do you do to move the address showing on the top to the bottom of the invoice?

answer

Use the layout designer to move it

question

You print an invoice but some of the information is cut off. How do you fit it to your invoice print?

answer

Use layout designer to make the field wider

question

How to set up multiple users in QB?

answer

Choose company>set up users and passwords>set up users

question

How to edit a collections letter in QB?

answer

Choose company>prepare letters with envelopes>customize letter templates

question

You don't know how a form (e.g invoice) looks when you print it. How can you change it?

answer

Click formatting tab at the top of the form, then click customize data layout.

question

If you have to track a specific information about your customers that QB doesn't track. What is the best way to do it?

answer

Edit a customer and click additional info tab> click define field to create a custom field to track anything you want.

question

How do you customize QB color scheme and adding or removing items from the Home page?

answer

Edit>preferences>desktop view

question

Which of the function can only be performed by the administrator?

answer

Add new users and change their access previleges.

question

How can you make any accounts sub accounts of another account?

answer

Click on the diamond to the left of the account, drag it below the appropriate parent account and release the mouse button. Then click on the diamond again, drag it to the right and release the mouse button. Another way is to go to the chart of accounts, select the account, right click then select edit, it opens the details of the account, check on the sub account box and then select the parent account and save.

question

You have been hired by a company that started in 1911 they have never used quick book. during the easy set up interview what "Startdate" should you use?

answer

the date you want to begin tracking the company's finances in Quickbooks.

question

When setting up a new company through the easy step interview, some company information is optional and some is absolutely required. which if the following pieces of information does quick book require you to enter? a) Company name b) Company Password c)Tax ID d) All of above

answer

A) company name

question

Which of the following is not a backup option in quick book? a)Manually back up the files b) Automatically Backup the data file when closing quickbooks c)schedule an unattended backup d)All of above

answer

d) All of above

question

If you choose to "Romove transactions as of a specific date" from the "Clean up Company data" window, what does Quickbooks do?

answer

Removes all transactions while leaving lists, preferences, and service subscriptions intact

question

What do the diamonds mean on the certain lists(for example the diamond to the left of each customer:Job)?

answer

you can click on the diamond and move the list entry to a different location on the list

question

What is the maximum number of names that can be included on the Names lists in Quickbooks Pro and Premier?

answer

14,500

question

What item type should you use for inventory that you assemble from other items and then sell?

answer

Inventory Assembly

question

Which of the following statements is true concerning items? a) You can use one item to represent different services or goods b)Items allow you to track your sales in more detail without cluttering your Chart of Acocunts or Profit & Loss c) To creat an invoice, you must use an item d) All of above

answer

D) All of above

question

When should you create an invoice in Quickbook?

answer

When a customer purchases goods and services but does not pay you at the time of the sale

question

When should you use a Sales Receipt in Quickbook?

answer

To record a customer payment at the time of sale

question

How do you track accounts payable in Quickbook?

answer

Enter a bill, and then use the pay bills window

question

What transaction/form do you begin with to enter a vendor credit?

answer

"Enter bill"

question

When setting up a new employee, what is important about the Payroll info tab?

answer

Whatever you enter/see in this window affects each paycheck, unless you change the information on the paycheck itself

question

How do you create a memorized group of reports?

answer

Open the "Memorized report list" then click "memorized report > New group"

question

What is the purpose of sub accounts?

answer

Track finances in more detail by grouping accounts in a logical fashion and showing a subtotal for those account

question

When you run Financial statements in quick book, what bookkeeping basis can you use to view the report? a) Cash basis b) Accrual Basis c) You can switch the bookkeeping basis if you want d) All of above

answer

D) All of above

question

What are the two main financial statements you can run from the "Company and Financial" category of reports?

answer

Balance Sheet, profit and Loss

question

Suppose your address information appears on the upper left of your invoice and you want to move it to the lower right. How would you do this?

answer

Use the Layout Designer

question

You need to enter the same transaction each month(for example, an insurance payment). how can you automate this process in quick book?

answer

While the transaction is on the screen, choose "edit>Memorize check" (or the name of the transaction)

question

When should you use a sales receipt in QB?

answer

To record a customer payment at the time of sale

question

When should you create an invoice in QB?

answer

When the customer purchases goods or services but does not pay you at the time of purchase.

question

When you invoice for time and costs, where does the QB gets the billable time or costs?

answer

From billable time entered on time sheets and/or billable costs entered on checks and bills.

question

When you create a statement and select "all open transactions as of statement date" what does QB show on statement?

answer

Open transactions as of the statement date

question

What options do you have after you create a credit memo in QB?

answer

Retain as an available credit or give a refund or apply to an invoice

question

What transaction should you enter if a customer returns a damaged products or incase of service, complaints so much you decide to offer a refund?

answer

Issue a credit memo in QB

question

What is the purpose of Progress invoicing?

answer

To invoice from an estimate in increments (when Progress invoicing is turned on from Preferences, you can create invoice from estimates and have 3 choices; 1. invoice for entire estimate, 2. invoice for % of the estimate, 3. invoice for selected items

question

You want to issue 1099 to a contractor for his services. How would you do it?

answer

Step 1. Vendor>edit vendor>additional info tab>check vendor eligible for 1099 and should have TAX ID entered Step 2. Edit>Preferences>Tax:1099>Company preferences>mark yes to the question do you file 1099 Step3. Vendor > Print/efile 1099>1099 Wizar>Get started

question

Which report will not let you enter a range of reporting dates?

answer

Balance Sheet as it is as of date and not for a range of dates

question

Which report is also called income statement?

answer

Profit and Loss

question

Which report shows Company's financial position? a. Balance Sheet b. Chart of Accounts c. Profit and Loss d. Cash Flow

answer

Balance Sheet

question

Adjusting Journal entries are used to record a. Depreciation b. Expired prepaid Expense c. Both a and b d. None

answer

c. Both a and b

question

How to print General Ledger report?

answer

Reports>Accountants & Taxes>General Ledger>Print icon

question

Which report will list the details of transactions by Account?

answer

General Ledger

question

How to post a Journal Entry?

answer

Once you record an entry just click save or next, this will post the JE

question

Can you Edit a posted Journal Entry?

answer

Yes, go to the particular journal, make the changes and then save.

question

Can you drill down to transactions from any QB reports?

answer

Yes, it shows a Zoom magnifier for drilling down by clicking which it takes to the transaction

question

Company Snapshots shows the company's trends and progress in 3 dimensions. Name the three areas/dimensions?

answer

Company, Payment, Customer

question

Can you email a report from QB? If yes, in what format?

answer

Yes, reports can be emailed in either excel or pdf.

question

Your company is running out of checks. Can you order check from QB?

answer

Yes, Banking>Order checks & Envelopes> Order checks

question

How to verify your current payroll set up in QB for errors or missing information?

answer

By running Payroll Check up by going to: Employees>My Payroll Service>Run Payroll Check up

question

How many types of QB files and what are their extensions?

answer

1. Working file-extension .QBW 2. Portable file-extension .QBM 3. Backup file-extension .QBB

question

QB has an option to convert accountants copy transfer file. True or False

answer

True

question

Is it possible to open multiple company files in QB?

answer

Yes, but only if you are using QB Accountants or Enterprise version

question

You can view a transaction on a Calender. True or False

answer

True, the calendar displays transaction on the entered date and the due date

question

QB has a mobile app for smartphone. True or False

answer

True, there are 2 QB apps, QB for windows for desktop application and the other is for QB online

question

Retained Earnings has a register to view transactions. True or False

answer

False, Each asset, liability and Equity account has a register to view or edit transactions except retained Earnings a/c

question

What are the 3 types of QB help available to the users

answer

1. Support resource through QB Help menu 2. QB learning center 3. Certified QB ProAdvisors (independent consultants)

question

How can you add a new job for an existing customer? a. You cannot b. Select the customer>then select Add Job from the new customer drop down menu c. List>Customer jobs>Add new d. Add another line on the Customer invoice

answer

b. Select the customer>then select Add Job from the new customer drop down menu

question

The Undeposited Funds account is a special account that is automatically created by QB. True or False

answer

True, works as a temporary holding a/c where QB tracks monies received

question

How to handle a payment when you don't want to apply the full amount of customer payment to an invoice?

answer

Reduce the amount in the payment column when you are applying the customer payment. Later on you can either issue a credit or refund the amount or apply to future invoice

question

What does new feature Income Tracker of QB 2014 provides?

answer

Provides a fast track of unbilled and upaid sales transactions.

question

The main 2 types of sales report are:

answer

Sales by Customer Summary Sales by Item Report

question

You can also Quick Add a customer or Vendor from Forms. True or False

answer

Yes

question

How to activate Class Tracking in QB?

answer

Edit>Preferences>Accounting Preference>Company Preference>Check use class tracking for transactions

question

QB allows you to attach electronic documents to transactions, such as invoices, Bills. True or false

answer

True, look for the attach File button in the upper hand section of the transaction window in QB

question

Per Item Price Levels is also a QB feature

answer

Yes, but only available in QB Premier and above.

question

Which report can be run to view all checks sorted by check number?

answer

Missing Checks report

question

What accounting behind the scene QB does when you record credit card charges?

answer

It increase Credit Card Payable liability (credits) a/c and increases the expense a/c (debits) shown at the bottom of the window where you entered credit card charges

question

Quick report can quickly give you detailed transaction about account, item, customer, vendor or payee. You can generate a quick report from: a. Chart of Accounts b. Centers c. Lists d. Registers or Forms e. All of the above

answer

e. All of the above

question

How can you track subcontracted services in QB? a. You cannot b. By setting up two sided Service item to track both the income and expense c. By setting up Class d. By creating non-Inventory Item

answer

b. By setting up two sided Service item to track both the income and expense

question

What should you do if you are not able to enter inventory items on a bill? a. Contact QB b. Enter inventory in Expense tab of the Bill c. Activate the inventory function by going to Preferences>Items and Inventory>Company preference>check inventory and purchase orders are active d. You need to upgrade QB

answer

c. Activate the inventory function by going to Preferences>Items and Inventory>Company preference>check inventory and purchase orders are active

question

QB automatically adjust the inventory as a result of physical inventory count. True or false

answer

False, you need to manually adjust the inventory after a physical count

question

Inventory Assembly is a feature of: a. QB Premier b. QB Pro c. QB Accountant d. a and c

answer

d. a and c

question

Employees default feature allows you to: a. pay employees automatically b. calculate taxes automatically c. define defaults for your payroll record d. There is no such feature

answer

c. define defaults for your payroll record so that each time you add a new employee you don't have to enter the same information over and over. Employee Center>Manage employee>change new employee default settings

question

You cannot have account numbers for your accounts in QB. True or False

answer

False, you just need to activate it by going to Preferences>Accounting>Company preferences>check use account numbers box

question

What are the 3 ways to remove an account from Chart of Accounts?

answer

1. Delete the a/c 2. Deactivate the a/c 3. Merge the a/c with another a/c

STUDY

Accounting Bad Debt Expense Direct Write Off Method Finance Financial Accounting Intermediate Accounting 1

Exam #2 Accounting: Cash Flows, Inventory, the Popularity of Lifo – Flashcards 140 terms

Alexander Rose

140 terms

Preview

Exam #2 Accounting: Cash Flows, Inventory, the Popularity of Lifo – Flashcards

question

Which of the following best describes credit sales? -Sales to customers on account -Cash sales to customers that are new to the company -sales to customers using credit cards -sales to customers on account -sales with a high risk that the customer will return the product

answer

Sales to customers on account

question

Oswego Clay Pipe Company provides services of $46,000 to Southeast Water District #45 on April 12 of the current year with terms 1/15, n/60. What would Oswego record on April 12?

answer

Accounts receivable debit 46,000 Sales Revenue credit 46000

question

Richard LLC accounts for possible bad debts using the allowance method. When an actual bad debt occurs, what effect does it have on the accounting equation? -Increases assets and increases stockholders' equity. -Decreases assets and decreases stockholders' equity. -Decreases assets and decreases liabilities. -No effect on the accounting equation.

answer

No effect on the accounting equation

question

Hughes Aircraft sold a four-passenger airplane for $380,000, receiving a $50,000 down payment and a 12% note for the balance. This transaction would include a: -Credit to Cash. -Debit to Sales Discount. -Debit to Notes Receivable. -Credit to Notes Receivable.

answer

Debit to Notes Receivable

question

At December 31, Amy Jo's Appliances had account balances in Accounts Receivable of $311,000 and $970 (credit) in Allowance for Uncollectible Accounts. An analysis of Amy Jo's December 31 accounts receivable suggests that the allowance for uncollectible accounts should be 2% of accounts receivable. Bad debt expense for the year should be: -$6,220. -$6,450. -$5,250. -$7,190.

answer

$5,5250 (311,000 * 2%)-970= 5,250

question

At the end of 2015, Murray State Lenders had a balance in its Allowance for Uncollectible Accounts of $4,500 (credit) before any adjustment. The company estimated its future uncollectible accounts to be $12,000 using the percentage-of-receivables method. Murray State's adjustment on December 31, 2015, to record its estimated uncollectible accounts included a: -Credit to Allowance for Uncollectible Accounts of $12,000. -Debit to Bad Debt Expense of $7,500. -Credit to Allowance for Uncollectible Accounts of $7,500. -Debit to Bad Debt Expense of $7,500; credit to Allowance for Uncollectible Accounts of $7,500.

answer

-Debit to Bad Debt Expense of $7,500; credit to Allowance for Uncollectible Accounts of $7,500. Bad Debt Expense = $12,000 − $4,500 = $7,500.

question

The following information pertains to Lindsey Corp. at the end of the year: Credit Sales: 150,000 Accounts Payable 20,000 Accounts Receivable 30,000 Allowance for Uncollectible Accounts 800 debit Cash sales-$1,200. -$2,200. - $3,000. -$3,800.

answer

- 3,000 Bad debt expense = $150,000 x 2% = $3,000.

question

Sandburg Veterinarian reports the following information for the year: Net Credit Sales 120,000 Average accounts receivable 20,000 cash collections on credit sales 100,000-6.0 -5.0 -1.2 -.2

answer

6.0 Receivables turnover ratio = net credits sales ($120,000)/average accounts receivable ($20,000) = 6.0.

question

Using the allowance method, writing off an actual bad debt would include a: -Debit to Bad Debt Expense. - Credit to Accounts Receivable. -Debit to Accounts Receivable. -Credit to Allowance for Uncollectible Accounts.

answer

- Credit to Accounts Receivable

question

Boynton Jewelers reported the following amounts at the end of the year: total sales = $550,000; sales discounts = $12,000; sales returns = $44,000; sales allowances = $17,000. What was the company's net revenues for the year? -$489,000. -$485,000. -$477,000. -$499,000.

answer

$499,000 Net revenues = $550,000 − $12,000 − $44,000 − $17,000 = $477,000.

question

A company collects an account receivable previously written off. Indicate how this transaction would affect the following five financial statement items:

answer

Assets=no effect liabilities=no effect equity= no effect revenues= no effect expenses= no effect

question

When using an aging method for estimating uncollectible accounts: -Older accounts are considered less likely to be collected. -The number of days the account is past due is not considered. -Older accounts are considered more likely to be collected. -No estimate of uncollectible accounts is made

answer

Older accounts are considered less likely to be collected.

question

On December 31, 2015, Coolwear Inc. had balances in Accounts Receivable and Allowance for Uncollectible Accounts of $48,400 and $940, respectively. During 2016, Coolwear wrote off $820 in accounts receivable and determined that there should be an allowance for uncollectible accounts of $1,140 at December 31, 2016. Bad debt expense for 2016 would be: -$320 -$1140 -$820 -$1020

answer

$1020 Bad debt expense = $1,140 − ($940 − $820) = $1,020.

question

Gershwin Wallcovering Inc. shipped the wrong shade of paint to a customer. The customer agreed to keep the paint upon being offered a 15% price reduction. Gershwin would record this reduction by crediting Accounts Receivable and debiting: -Sales Revenue. -Sales Discounts. -Sales Returns. -Sales Allowances.

answer

Sales Allowances

question

At the end of 2015, Murray State Lenders had a balance in its Allowance for Uncollectible Accounts of $4,500 (debit) before any adjustment. The company estimated its future uncollectible accounts to be $12,000 using the percentage-of-receivables method. Murray State's adjustment on December 31, 2015, to record its estimated uncollectible accounts included a: -Credit to Allowance for Uncollectible Accounts of $12,000. -Debit to Bad Debt Expense of $16,500. -Credit to Allowance for Uncollectible Accounts of $16,500. -Debit to Bad Debt Expense of $16,500; credit to Allowance for Uncollectible Accounts of $16,500.

answer

Debit to Bad Debt Expense of $16,500; credit to Allowance for Uncollectible Accounts of $16,500. Bad Debt Expense = $12,000 + $4,500 = $16,500.

question

On March 17, Jackal Lumber sold building materials to Fredo Limited for $15,000 with terms of 3/10, net 20. What amount did Jackal record as revenue on March 25 when Fredo paid for the building materials? -$15,000. -$14,550. -$15,450 -$0

answer

$0 No revenue recorded on March 25. The revenue would have been recorded on March 17.

question

On November 10 of the current year, Flores Mills sold carpet to a customer for $8,000 with credit terms 2/10, n/30. How would Flores record the sale on November 10?

answer

Accounts Receivable debit 8,000 Sales Revenue Credit 8,000

question

Tom's Textiles shipped the wrong material to a customer, who refused to accept the order. This is an example of a: -Sales revenue. -Sales discount. -Sales return. -Sales allowance.

answer

Sales Return

question

Gershwin Wallcovering Inc. shipped the wrong shade of paint to a customer. The customer agreed to keep the paint upon being offered a 15% price reduction. The price reduction is an example of a: -Sales revenue. -Sales discount. -Sales return. -Sales allowance.

answer

Sales allowance

question

On December 31, 2015, Andy Inc. has a debit balance of $1,500 for the Allowance for Uncollectible Accounts before any year-end adjustment. Andy Inc. also has the following information for its accounts receivable and the estimated percentages of bad debts for different past-due amounts: Age Group-Accounts Receivable- Estimated Percent Uncollectible (0-30)-$50,000-5% (31-60)-$20,000-10% (61-90)-$10,000-20% -$6,500. -$1,500. -$5,000. -$8,000.

answer

$8,000 Estimated uncollectible = ($50,000 × 5%) + ($20,000 × 10%) + ($10,000 × 20%) = $6,500. Bad Debt Expense = $6,500 + $1,500 = $8,000.

question

On July 1, 2015, Herzog Mining lends cash and accepts a $9,000 note receivable that offers 10% interest and is due in nine months. How would Herzog record the transaction on April 1, 2016, when the borrower pays Herzog the correct amount owed?

answer

Cash debit 9,675 Notes Receivable credit 9,000 Interest Revenue credit 225 Interest Receivable credit 450Interest revenue = $9,000 x 10% x 3/12 = $225. Interest receivable = $9,000 x 10% x 6/12 = $450.

question

Suppose that the balance of a company's Allowance for Uncollectible Accounts was $6,200 (credit) at the end of 2015, prior to any adjustments. The company estimated that the total of uncollectible accounts in its accounts receivable was $44,300 at the end of 2015. What amount of bad debt expense would appear in the company's 2015 income statement? -$38,100. -$105,700. -$33,000. -$50,500.

answer

$38,100 Bad Debt Expense = $44,300 - $6,200 = $38,100.

question

On February 1, 2015, Sanger Corp. lends cash and accepts a $2,000 note receivable that offers 10% interest and is due in six months. What would Sanger record on August 1, 2015, when the borrower pays Sanger the correct amount owed?

answer

Cash Debit 2,100 Interest Revenue credit 100 Notes Receivable credit 2000 Interest revenue = $2,000 x 10% x 6/12 = $100.

question

answer

$7,740 ($238,000 x 3%) + $600 = $7,740.

question

Under the direct write-off method, what adjustment is made at the end of the year to account for possible future bad debts? -Debit Bad Debt Expense. -Debit Allowance for Uncollectible Accounts. -Credit Accounts Receivable. -No adjustment is made.

answer

No Adjustment is made.

question

Merchandise sold FOB destination indicates that: -The seller holds title until the merchandise is received at the buyer's location. -The merchandise has not yet been shipped. -The merchandise will not be shipped until payment has been received. -The seller transfers title to the buyer once the merchandise is shipped.

answer

The seller holds title until the merchandise is received at the buyers location

question

The distinction between operating and nonoperating income relates to: -Continuity of income. -Principal activities of the reporting entity. -Consistency of income stream. -Reliability of measurements.

answer

Principle activities of the reporting entity.

question

Ace Bonding Company purchased inventory on account. The inventory costs $2,000 and is expected to sell for $3,000. How should Ace record the purchase using a perpetual inventory system?

answer

Inventory Debit 2,000 Accounts Payable credit 2,000

question

Anthony Corporation reported the following amounts for the year: Net sales $296,000 Cost of Goods Sold 138,000 Average inventory 50,000-2.42. -2.76. -3.21. -2.14.

answer

2.76 Inventory turnover ratio = cost of goods sold ($138,000)/average inventory ($50,000) = 2.76.

question

At the end of a reporting period, Gamble Corporation determines that its ending inventory has a cost of $300,000 and a market value of $230,000. What would be the effect(s) of the adjustment to write down inventory to market value? -Decrease total assets. -Decrease net income. -Increase retained earnings. -Decrease total assets and net income.

answer

Decrease total assets and net income

question

If a company understates its count of ending inventory in Year 1, which of the following is true? -Costs of good sold is understated at the end of Year 1. -Profit is correct in Year 2. -The balance of retained earnings is overstated at the end of Year 1. -The balance of retained earnings is correct at the end of Year 2.

answer

The balance of retained earnings is correct at the end of Year 2

question

Inventory records for Marvin Company revealed the following: Date-Transaction- #of Units- Unit costMar 1- Beg inventory- 1,000-7.20 Mar 10- Purchase- 600-7.25 Mar 16- Purchase- 800- 7.30 March 23- Purchase- 600- 7.35 Marvin sold 2,300 units of inventory during the month. Ending inventory assuming weighted-average cost would be (round weighted-average unit cost to four decimals if necessary): -$5,087. -$5,107. -$5,077. -$5,005.

answer

$5,087 Weighted-average cost = [(1,000 x $7.20) + (600 x $7.25) + (800 x $7.30) + (600 x $7.35)]/3,000 = $7.2667. Ending inventory = 700 x $7.2667 = $5,087 (rounded).

question

Consider the following year-end information for Spitzer Corporation: Cost of Goods Sold $420,000 Sales Revenue 800,000 Nonoperating Expenses 10,000 Operating Expenses 170,000 Income Tax Expense 80,000-$200,000. - $210,000. -$380,000. -$120,000.

answer

$210,000 Operating income = $800,000 − $420,000 − $170,000 = $210,000.

question

The following information relates to inventory for Shoeless Joe Inc. March 1- Beg Inventory-20-$2 March 7- Purchase-15-$3 March 11- Sale - 25- $7 March 12- Purchase-20- $4-$55. -$170. -$110. -$70.

answer

$110 Ending inventory = ($3 × 10) + ($4 × 20) = $110.

question

In a period of rising costs, which inventory valuation method would a company likely choose if they want to have the highest possible balance of inventory on the balance sheet? -Weighted-average cost -FIFO -LIFO -Periodic

answer

FIFO

question

Under the principle of lower-of-cost-or-market, when a company has 10 units of inventory A with market value of $50 and a cost of $60, what is the adjustment? -Debit Inventory $100; credit Cost of Goods Sold $100. -Debit Inventory $500; credit Cost of Goods Sold $500. -Debit Cost of Goods Sold $100; credit Inventory $100. -Debit Cost of Goods Sold $500; credit Inventory $500.

answer

Debit Cost of Goods Sold $100; credit Inventory $100. Need to reduce inventory cost to the lower market value. 10 x $10 = $100.

question

In a perpetual inventory system, the purchase of inventory is debited to: -Purchases -Costs of Goods Sold -Inventory -Accounts Payable `

answer

Inventory

question

Using the information below, determine the ending inventory value applying the lower-of-cost-or-market method. Inventory Item- Quantity-Cost- Market Cutlets-200-$14-$14 Chops-400-$16-$14 Shanks-300-$15-$12 -$13,300. -$12,000. - $11,600. -$13,700.

answer

$11,600 Cutlets = $12 × 200 = $2,400. Chops = $14 × 400 = $5,600. Shanks = $12 × 300 = $3,600. Ending inventory = $2,400 + $5,600 + $3,600 = $11,600.

question

During periods when inventory costs are rising, ending inventory will most likely be: -Greater under LIFO than FIFO. -Less under average cost than LIFO. -Greater under average cost than FIFO. -Greater under FIFO than LIFO.

answer

Greater under FIFO than LIFO

question

LeGrand Corporation reported the following amounts in its income statement: Sales Revenue $440,000 Advertising Expense 60,000 Interest Expense 10,000 Salaries Expense 55,000 Utilities Expense 25,000 Income tax expense 45,000 cost of goods sold 180,000 What was LeGrand's net income?-$120,000. -$60,000. -$110,000. -$65,000.

answer

$65,000 Net income = $440,000 − $180,000 − ($60,000 + $55,000 + $25,000) − $10,000 − $45,000 = $65,000.

question

Company A is identical to Company B in every regard except that Company A uses FIFO and Company B uses LIFO. In an extended period of rising inventory costs, Company A's gross profit and inventory turnover, compared to Company B's, would be:

answer

Gross Profit -Higher Inventory Turnover- Lower

question

On May 1, Ace Bonding Company purchased inventory costing $2,000 on account with terms 2/10, n/30. On May 8, Ace pays for this inventory and records which of the following using a periodic inventory system?

answer

Accounts Payable debit 2,000 Purchase Discounts Credit 40 Cash Credit 1,960Purchase discount = $2,000 × 2% = $40.

question

answer

Accounts Payable Debit 2,000 Inventory Credit 40 Cash Credit 1,960Purchase discount = $2,000 × 2% = $40.

question

Given the information in the table below, what is the company's gross profit? Sales Revenue $350,000 Accounts Receivable 280,000 Ending Inventory 230,000 Cost of Goods Sold 180,000 Sales Returns 50,000 Sales Discount 20,000 -$280,000. -$170,000. -$50,000. -$100,000.

answer

$100,000 Net sales = $350,000 − $50,000 − $20,000 = $280,000. Gross profit = $280,000 − $180,000 = $100,000.

question

Inventory records for Marvin Company revealed the following: Date- Transaction-#of Units-Unit Cost Mar 1-Beg Inventory-1,000-$7.20 Mar 10- Purchase-600-7.25 Mar 16- Purchase-800-7.30 Mar 23- Purchase-600-7.35-$16,800. -$16,760. -$16,540. -$16,660.

answer

16,660 Cost of goods sold = (1,000 x $7.20) + (600 x $7.25) + (700 x $7.30) = $16,660.

question

Good, Inc. sold inventory for $1,200 that was purchased for $700. Good records which of the following when it sells inventory using a periodic inventory system? -No entry is required for cost of goods sold and inventory. -Debit Cost of Goods Sold $700; credit Inventory $700. -Debit Cost of Goods Sold $1,200; credit Inventory $1,200. -Debit Inventory $700; credit Cost of Goods Sold $700.

answer

No entry is required for cost of goods sold and inventory

question

Anthony Corporation reported the following amounts for the year: Net sales $296,000 Cost of Goods Sold 138,000 Average Inventory 50,000 -53.4%. -51.9%. -50.3%. -46.6%.

answer

53.4% Gross profit ratio = gross profit ($296,000 − $138,000)/net sales ($296,000) = 53.4% (rounded).

question

In a periodic inventory system, the purchase of inventory is debited to: -Purchases. -Cost of goods sold. -Inventory. -Accounts payable.

answer

Purchases

question

The primary reason for the popularity of LIFO is that it gives: -Better matching of physical flow and cost flow. -A lower income tax obligation when inventory costs are rising. -Simplified recordkeeping. -A simpler method to apply.

answer

A lower income tax obligation when inventory costs are rising.

question

Inventory records for Dunbar Incorporated revealed the following: Date-Transaction-#of Units-Unit Cost Apr 1- Beg Inventory-500-2.40 Apr 20- Purchase-400-2.50Dunbar sold 700 units of inventory during the month. Ending inventory assuming LIFO would be: -$500 -490 -470 -480

answer

$480 Ending inventory = 200 x $2.40 = $480.

question

Gains on the sale of fixed assets for cash: -Are the excess of the book value over the cash received. -Are recorded as a debit. -Are reported on a net-of-tax basis if material. -Are the excess of the cash received over the book value.

answer

Are the excess of the cash received over the book value.

question

Berry Co. purchases a patent on January 1, 2015, for $40,000 and the patent has an expected useful life of five years with no residual value. Assuming Berry Co. uses the straight-line method, what is the carrying value of the patent on December 31, 2016? -$21,000. -$33,000. -$24,000. -$26,000.

answer

$24,000 $40,000/5 years = $8,000 amortization per year. Cost $40,000 LESS: Accumulated Amortization(16,000) =Carrying Value 12/31/16 $24,000

question

Which of the following is considered a "contra" account? -Unearned Revenue. -Goodwill. -Accumulated Depreciation. -Cost of Goods Sold.

answer

Accumulated Depreciation

question

Career Services, Incorporated sold some office equipment for $52,000 on December 31, 2015. The journal entry to record the sale would include which of the following if the original cost of the equipment was $80,000 with a residual value of $5,000 and a useful life of 10 years? Assume the machine was purchased on January 1, 2012 and depreciated using the straight-line method. -Gain of $2,000. -Loss of $9,500. -Gain of $9,500. -Loss of $2,000.

answer

Gain of $2,000 [($80,000 − $5,000)/10 years] = $7,500 depreciation per year. After four years, the book value would be [$80,000 − ($7,500 x 4 years)] = $50,000. The asset was sold for $52,000 or a $2,000 gain over book value.

question

Lake Incorporated purchased all of the outstanding stock of Huron Company paying $850,000 cash. Lake assumed all of the liabilities. Book values and fair values of acquired assets and liabilities were: Current Assets (net) Book Value: 130,000 Fair Value: 125,000 Property, plant, erupt (net) Book:600,000 Fair: 750,000 Liabilities Book:175,000 Fair: 175,000 Lake would record goodwill of: -$0. -$150,000. -$345,000. -$850,000.

answer

$150,000 Purchase Price 850,000 Less Fair value of net assets: Assets(125,000+750,000) Less:Liabilities assumed 175,000 (700,000) Goodwill ===150,000

question

The following financial information is from Cook Company: Accounts Payable $55,000 Land 90,000 Inventory 10,500 Accounts Receivable 7,500 Equiptment 8,000 Unearned Revenue 58,500 Short term Investments 20,000 Notes Receivable (due in 8months) 45,500 Interest Payable 2,000 Patents 75,000What is the amount of long-term assets assuming the accounts above reflect normal activity? -$342,500. - $173,000. -$273,500. -$98,000.

answer

173,000 $90,000 + $8,000 + $75,000 = $173,000.

question

Research and development costs should be: -Expensed in the period incurred. -Expensed in the period they are determined to be unsuccessful. -Deferred pending determination of success. -Expensed if unsuccessful, capitalized if successful.

answer

Expensed in the period incurred

question

Real Angus Steakhouse purchased land for $75,000 cash. They also incurred commissions of $4,500, property taxes of $5,000, and title insurance of $800. The $5,000 in property taxes includes $4,000 in back taxes paid by Real Angus on behalf of the seller and $1,000 due for the current year after the purchase date. For what amount should Real Angus Steakhouse record the land? -$83,500. - $84,300. -$85,300. -$75,000.

answer

84,300 $75,000 + $4,500 + $4,000 + $800 = $84,300.

question

Abbott Company purchased a computer that cost $10,000. It had an estimated useful life of 5 years and no residual value. The computer was depreciated by the straight-line method and was sold at the end of the fourth year of use for $3,000 cash. Abbott should record: -a gain of $1,000. -a loss of $1,000. -neither a gain nor a loss - the computer was sold at its book value. -neither a gain nor a loss - the gain that occurred in this case would not be recognized.

answer

a gain of 1,000 $10,000/5 = depreciation of $2,000 per year. After four years, the book value would be $10,000 − ($2,000 x 4 years) = $2,000. The asset was sold for $3,000 or a $1,000 gain over book value.

question

The balance sheet of Hidden Valley Farms reports total assets of $450,000 and $550,000 at the beginning and end of the year, respectively. Net income and sales for the year are $100,000 and $800,000, respectively. What is Hidden Valley's return on assets? -10%. - 20%. -160%. -18%.

answer

20% $100,000/[($450,000 + $550,000)/2] = 20%.

question

Kansas Enterprises purchased equipment for $60,000 on January 1, 2015. The equipment is expected to have a five-year life, with a residual value of $5,000 at the end of five years. Using the straight-line method, the book value at December 31, 2015 would be: -$44,000. -$49,000. -$55,000. -$60,000.

answer

49,000 Book value = $60,000 − $11,000 = $49,000.

question

A machine has a cost of $15,000, an estimated residual value of $3,000, and an estimated useful life of four years. The machine is being depreciated on a straight-line basis. At the end of the second year, what amount will be reported for accumulated depreciation? -$9,000. - $6,000. -$7,500. -$3,000.

answer

6,000 ($15,000 − $3,000)/4 years = $3,000 per year x 2 years = $6,000.

question

The legal life of a patent is:

answer

twenty years

question

Kansas Enterprises purchased equipment for $60,000 on January 1, 2015. The equipment is expected to have a five-year life, with a residual value of $5,000 at the end of five years. Using the double-declining balance method, depreciation expense for 2015 would be: -$24,000. -$22,000. -$19,000. -$20,000.

answer

24,000 Depreciation expense = $60,000 x .40 = $24,000. Depreciation rate = 2/5 = .40.

question

Kansas Enterprises purchased equipment for $60,000 on January 1, 2015. The equipment is expected to have a five-year life, with a residual value of $5,000 at the end of five years. Using the double-declining balance method, depreciation expense for 2016 would be: -$22,000. -$13,200. - $14,400. -$24,000.

answer

14,400 Depreciation expense = [($60,000 − ($60,000 x .40)] x .40 = $14,400. Depreciation rate = 2/5 = .40.

question

Woods Company made an ordinary repair to a delivery truck at a cost of $500. Woods' accountant debited the asset account, Equipment. Was this treatment an error, and if so, what will be the effect on Woods' financial statements? -No, the repair was accounted for correctly. - Yes, the error overstated assets and net income. -Yes, in the years following, net income will be overstated. -Yes, the error understated net income.

answer

Yes, the error overstated assets and net income

question

Productive assets that are physically used up, or depleted are: -equiptment -land -land improvements -natural resources

answer

natural resources

question

answer

1.6 times $800,000/[($450,000 + $550,000)/2] = 1.6 times.

question

Research and development costs should be capitalized when the: -Future benefit is probable and the amount can be reasonably estimated. -Future benefit is reasonably possible and the amount can be reasonably estimated. -Future benefit is probable and the amount cannot be reasonably estimated. - None of these

answer

None of these

question

Landon Co. purchased a $500,000 tract of land that is intended to be the site of a new office complex. Landon incurred additional costs and realized salvage proceeds as follows: Demolition of existing building on site 75,000 Legal and other fees to close escrow 15,000 Proceeds from sale of demolition scrap 10,000 What would be the capitalized cost of the land? -$500,000. -$575,000. - $580,000. -$590,000.

answer

580,000 Purchase 500,000 Demolition Costs 75,000 Legal Fees 15,000 Sale of Scrap (10,000) total cost of land 580,000

question

Bricktown Exchange purchases a copyright for $50,000. The copyright has a remaining legal life of 25 years, but only an expected useful life of five years with no residual value. Assuming the company uses the straight-line method, what is the amortization expense for the first year? -$0. -$2,000. -$3,333. -$10,000.

answer

10,000 $50,000/5 years = $10,000.

question

In testing for recoverability of an operational asset, an impairment loss is required if the: -Asset's book value exceeds the present value of its expected future cash flows. -Expected future cash flows exceeds the asset's book value. -Present value of expected future cash flows exceeds its carrying value. Correct- Asset's book value exceeds the expected future cash flows.

answer

Asset's book value exceeds the expected future cash flows

question

Bricker Enterprises purchased a machine for $100,000 on October 1, 2015. The estimated service life is ten years with a $10,000 residual value. Bricker records partial-year depreciation based on the number of months in service. Depreciation expense for the year ended December 31, 2015, using straight-line depreciation, is: -$1,500. -$7,500. -$2,250. -$2,500.

answer

2,250 Depreciation expense = [($100,000 − 10,000)/10 years] x 3/12 = $2,250.

question

An exclusive 20-year right to manufacture a product or to use a process is a: -patent -copyright -trademark -franchise

answer

patent

question

Return on assets is equal to: -Profit margin plus asset turnover. -Profit margin minus asset turnover. -Profit margin times asset turnover. -Profit margin divided by asset turnover.

answer

Profit margin times asset turnover.

question

Brian Inc. borrowed $8,000 from First Bank and signed a promissory note. What entry should Brian Inc. record? -Debit Cash, $8,000; Credit Notes Receivable, $8,000. -Debit Notes Receivable, $8,000; Credit Cash, $8,000. -Debit Cash, $8,000; Credit Notes Payable, $8,000. -Debit Notes Payable, $8,000; Credit Cash, $8,000.

answer

Debit Cash, $8,000; Credit Notes Payable, $8,000.

question

In December, 2014, Quebecor Printing received magazine subscriptions for 2015 from a customer, who paid $500 in cash. What would be the appropriate journal entry for this event? -Debit Cash, $500; credit Subscription Revenue, $500. -Debit Cash, $500; credit Unearned Revenue, $500. -Debit Subscription Revenue, $200; credit Cash, $200. -No journal entry is necessary.

answer

Debit Cash, $500; credit Unearned Revenue, $500

question

Suppose you buy lunch for $8.39 that includes a 5% sales tax. How much did the restaurant charge you for the lunch (excluding any tax) and how much do they owe for sales tax? -$8.39 for lunch and $0.42 for sales tax. -$8.39 for lunch and no sales tax. -$8.81 for lunch and $0.42 for sales tax. -$7.99 for lunch and $0.40 for sales tax.

answer

$7.99 for lunch and $0.40 for sales tax. $8.39/1.05 = $7.99.

question

A company's liquidity refers to its: -Ability to collect accounts receivable. -Ability to sell inventory efficiently. -Ability to generate profits from operations. -Ability to pay currently maturing debts.

answer

-Ability to pay currently maturing debts.

question

Which of the following is true regarding FICA taxes? -FICA taxes are paid only by the employee. -FICA taxes are paid only by the employer. -FICA taxes are paid in equal amounts by the employee and the employer. -FICA taxes are paid in different amounts by the employee and the employer.

answer

FICA taxes are paid in equal amounts by the employee and the employer

question

Which of the following statements regarding liquidity ratios is true? -A low current ratio generally indicates the ability to pay current liabilities on a timely basis. -A low acid-test ratio generally indicates the ability to pay current liabilities on a timely basis. -All current assets are due within one year and therefore have essentially equal liquidity. - A high working capital generally indicates the ability to pay current liabilities on a timely basis.

answer

A high working capital generally indicates the ability to pay current liabilities on a timely basis.

question

On November 1, 2015, The Bagel Factory signed a $100,000, 6%, six-month note payable with the amount borrowed plus accrued interest due six months later on May 1, 2016. The Bagel Factory records the appropriate adjusting entry for the note on December 31, 2015. In recording the payment of the note plus accrued interest at maturity on May 1, 2016, The Bagel Factory would -Debit Interest Expense, $2,000. -Debit Interest Expense, $1,000. -Debit Interest Payable, $2,000. -Debit Interest Expense, $3,000.

answer

debit interest expense 2,000 Interest expense in 2016 = [($100,000 x 6%) x 4/12] = $2,000.

question

The current ratio is -Current assets divided by current liabilities. -Cash and short-term investments divided by current liabilities. -Cash, short-term investments, and accounts receivable divided by current liabilities. -Cash, short-term investments, accounts receivable, and inventory divided by current liabilities

answer

Current Assets divided by current liabilities

question

United Supply has a $5 million liability at December 31, 2015, of which $1 million is payable in each of the next five years. United Supply reports the liability on the balance sheet as: -A $5 million current liability. -A $5 million long-term liability. - A $1 million current liability and a $4 million long-term liability. -A $4 million current liability and a $1 million long-term liability.

answer

A $1 million current liability and a $4 million long-term liability.

question

Which of the following is not a current liability? -Accounts payable. - A note payable due in 2 years. -Current portion of long-term debt. -Sales tax payable.

answer

A note payable due in 2 years

question

Union Apparel has sales including sales taxes for the month of $551,200. If the sales tax rate is 6%, what are Union Apparel's sales for the month? -$500,000. -$518,128. - $520,000. -$551,200.

answer

520,000 $551,200/1.06 = $520,000.

question

Away Travel filed suit against West Coast Travel seeking damages for copyright violations. West Coast Travel's legal counsel believes it is reasonably possible that West Coast Travel will settle the lawsuit for an estimated amount in the range of $100,000 to $200,000, with all amounts in the range considered equally likely. How should West Coast Travel report this litigation? -As a liability for $100,000 with disclosure of the range. -As a liability for $150,000 with disclosure of the range. -As a liability for $200,000 with disclosure of the range. -As a disclosure only. No liability is reported.

answer

As a disclosure only. No liability is reported. A contingent liability is not recorded if the likelihood of loss is only reasonably possible.

question

Mike Gundy is a college football coach making a base salary of $2,400,000 a year ($200,000 per month). Employers are required to withhold a 6.2% Social Security tax up to a maximum base amount and a 1.45% Medicare tax with no maximum. Assuming the FICA maximum base amount is $113,700, through what month will Social Security be withheld? -Social Security will be withheld only in January. -Social Security will be withheld through the entire year. -Social Security will be withheld through the month of March. -Social Security will be withheld through the month of June.

answer

Social Security will be withheld only in January. The coach's monthly salary of $200,000 exceeds the FICA maximum base amount of $113,700, so the total amount of Social Security for the year will be withheld in January.

question

When a gain contingency is probable and the amount of gain can be reasonably estimated, the gain should be: -Reported in the income statement and disclosed. -Offset against stockholders' equity. -Disclosed, but not recognized in the income statement. -Reported in the income statement, but not disclosed.

answer

Disclosed, but not recognized in the income statement.

question

Region Jet has a $50 million liability at December 31, 2015, of which $10 million is payable in 2016. In its December 31, 2015 balance sheet, the company reports the $50 million debt as -A $50 million current liability on the balance sheet. -A $50 million long-term liability on the balance sheet. -A $10 million current liability and a $40 million long-term liability on the balance sheet. -A $40 million current liability and a $10 million long-term liability on the balance sheet.

answer

A $10 million current liability and a $40 million long-term liability on the balance sheet.

question

When a company collects sales tax from a customer, the event is recorded by: -A debit to Sales Tax Expense and a credit to Sales Tax Payable. -A debit to Cash and a credit to Sales Tax Payable. -A debit to Sales Tax Payable and a credit to Sales Tax Expense. -A debit to Sales Tax Payable and a credit to Cash.

answer

A debit to Cash and a credit to Sales Tax Payable.

question

On December 1, 2015, Old World Deli signed a $300,000, 5%, six-month note payable with the amount borrowed plus accrued interest due six months later on June 1, 2016. Old World Deli records the appropriate adjusting entry for the note on December 31, 2015. What amount of cash will be needed to pay back the note payable plus any accrued interest on June 1, 2016? -$300,000. -$301,250. -$306,250. -$307,500.

answer

307,500 $300,000 + [$300,000 x 5% x 6/12] = $307,500.

question

Given a choice, most companies would prefer to report a liability as long-term rather than current because: -It may cause the firm to appear less risky to investors and creditors. -It may reduce interest rates on borrowing. -It may cause the company to appear more stable commanding a higher stock price for new stock listings.

answer

All of these

question

Brian Inc. borrowed $8,000 from First Bank and signed a promissory note. What entry should First Bank record? -Debit Cash, $8,000; Credit Notes Receivable, $8,000. -Debit Notes Receivable, $8,000; Credit Cash, $8,000. -Debit Cash, $8,000; Credit Notes Payable, $8,000. -Debit Notes Payable, $8,000; Credit Cash, $8,000.

answer

Debit Notes Receivable, $8,000; Credit Cash, $8,000.

question

The Pita Pit borrowed $100,000 on November 1, 2015, and signed a six-month note bearing interest at 12%. Principal and interest are payable in full at maturity on May 1, 2016. In connection with this note, The Pita Pit should report interest expense at December 31, 2015, in the amount of: -$0. -$1,000. -$2,000. -$6,000.

answer

2,000 [($100,000 x 12%) x 2/12] = $2,000.

question

On November 1, 2015, New Morning Bakery signed a $200,000, 6%, six-month note payable with the amount borrowed plus accrued interest due six months later on May 1, 2016. New Morning Bakery should record which of the following adjusting entries at December 31, 2015? -Debit Interest Expense and credit Interest Payable, $2,000. -Debit Interest Expense and credit Cash, $2,000. -Debit Interest Expense and credit Interest Payable, $6,000. -Debit Interest Expense and credit Cash, $6,000.

answer

-Debit Interest Expense and credit Interest Payable, $2,000. [($200,000 x 6%) x 2/12] = $2,000.

question

Which of the following is not an employer payroll cost? -FICA taxes. -Federal and state unemployment taxes. -Federal and state income taxes. -Employer contributions to a retirement plan.

answer

Federal and state income taxes

question

If management can estimate the amount of loss that will occur due to litigation against the company, and the likelihood of the loss is reasonably possible, a contingent liability should be -Disclosed, but not reported as a liability. -Disclosed and reported as a liability. -Neither disclosed nor reported as a liability. -Reported as a liability, but not disclosed.

answer

-Disclosed, but not reported as a liability.

question

Action Travel has 10 employees each working 40 hours per week and earning $20 an hour. Federal income taxes are withheld at 15% and state income taxes at 6%. FICA taxes are 7.65% and unemployment taxes are 3.8% of the first $7,000 earned per employee. What is the actual direct deposit of payroll for the first week of January? -$5,404. - $5,708. -$4,792. -$8,000.

answer

5,708 Total Salaries Expense [(10*40hrs) * $20]=8000 Less : withholdings Federal income tax (8,000*.15)=1200 State Income tax (8,000*.06)=480 FICA taxes (8,000*.0765)=612 total withholdings =2,292 Actal Direct Deposit 5,708

question

The acid-test ratio is -Current assets divided by current liabilities. -Cash and short-term investments divided by current liabilities. -Cash, short-term investments, and accounts receivable divided by current liabilities. -Cash, short-term investments, accounts receivable, and inventory divided by current liabilities.

answer

Cash, short-term investments, and accounts receivable divided by current liabilities.

question

Accounts receivable are best described as: a. liabilities of the company that represent the amount owed to suppliers. b. amounts that have previously been received from customers c. Assets of the company representing the amount owed by customers. d. Amounts that have previously been paid to suppliers.

answer

c. Assets of the company representing the amount owed by customers.

question

On March 17, Fox Lumber sells materials to Whitney Construction for $12,000, terms 2/10, n/30. Whitney pays for the materials on March 23. What amount would Fox record as revenue on March 17? a $12,400. b $11,760. c $12,000. d $12,240.

answer

c. 12,200

question

Refer to the information in the previous question. What is the amount of net revenues (sales minus sales discounts) as of March 23? a $0. b $11,760. c $12,000. d $12,240.

answer

b. 11,760

question

Suppose the balance of Allowance for Uncollectible Accounts at the end of the current year is $400 (credit) before any adjustment. The company estimates future uncollectible accounts to be $3,200. At what amount would bad debt expense be reported in the current year's income statement? a $400. b $2,800. c $3,200. d $3,600.

answer

b. 2,800

question

Suppose the balance of Allowance for Uncollectible Accounts at the end of the current year is $400 (debit) before any adjustment. The company estimates future uncollectible accounts to be $3,200. At what amount would bad debt expense be reported in the current year's income statement? a $400. b $2,800. c $3,200. d $3,600.

answer

3,600

question

Kidz Incorporated reports the following aging schedule of its accounts receivable with the estimated percent uncollectible. What is the total estimate of uncollectible accounts using the aging method? Age group- amount receivable- estimated percent uncollectible (0-60days)-20,000-2% (61-90 days)- 6000- 15% more than 90 days - 2000- 50% total-28000 b $1,150. c $1,900. d $2,300. e $5,900.

answer

c. 1,900

question

Using the allowance method, the entry to record a write-off of accounts receivable will include: a A debit to Bad Debt Expense. b A debit to Allowance for Uncollectible Accounts. c No entry because an allowance for uncollectible accounts was established in an earlier period. d A debit to Service Revenue.

answer

B. A debit to Allowance for Uncollectible Accounts

question

The direct write-off method is generally not permitted for financial reporting purposes because: a Compared to the allowance method, it would allow greater flexibility to managers in manipulating reported net income. b This method is primarily used for tax purposes. c It is too difficult to accurately estimate future bad debts. d Expenses (bad debts) are not properly matched with the revenues (credit sales) they help to generate.

answer

d Expenses (bad debts) are not properly matched with the revenues (credit sales) they help to generate.

question

On January 1, 2012, Roberson Supply borrows $10,000 from Nees Manufacturing by signing a 9% note due in eight months. Calculate the amount of interest revenue Nees will record on September 1, 2012, the date that the note is due. a $300. b $600. c $900. d $1,000

answer

b. 600

question

At the beginning of 2012, Clay Ventures has total accounts receivable of $100,000. By the end of 2012, Clay reports net credit sales of $900,000 and total accounts receivable of $200,000. What is the receivables turnover ratio for Clay Ventures? a 2.0. b 4.5. c 6.0. d 9.0

answer

c. 6.0

question

Which of following companies earn revenues by selling inventory? a Service companies. b Manufacturing companies. c Merchandising companies. d Both manufacturing and merchandising companies

answer

d. Both manufacturing and merchandising companies

question

At the beginning of the year, Bennett Supply has inventory of $3,500. During the year, the company purchases an additional $12,000 of inventory. An inventory count at the end of the year reveals remaining inventory of $4,000. What amount will Bennett report for cost of goods sold? a $11,000. b $11,500. c $12,000. d $12,500

answer

b. 11,500

question

Which of the following levels of profitability in a multiple-step income statement represents revenues from the sale of inventory less the cost of that inventory? a Gross profit. b Operating income. c Income before income taxes. d Net income.

answer

a. Gross profit

question

Madison Outlet has the following inventory transactions for the year: Date- Transaction- #of units- unit cost-totalcostjan1. begin inventory- 200-2000 mar 14 purchase-15-300-4500 total: 6,500 jan 1-dec 31 total sales to customers 12 What amount would Madison report for cost of goods sold using FIFO? a $2,600. b $2,900. c $3,600. d $3,900

answer

a. 2,600

question

Which inventory cost flow assumption generally results in the lowest reported amount for cost of goods sold when inventory costs are rising? a Lower-of-cost-or-market. b First-in, first-out (FIFO). c Last-in, first-out (LIFO). d Weighted-average cost.

answer

b. First in, first out (FIFO)

question

Using a perpetual inventory system, the purchase of inventory on account would be recorded as: a Debit Cost of Goods Sold; credit Inventory. b Debit Inventory; credit Sales Revenue. c Debit Purchases; credit Accounts Payable. d Debit Inventory; credit Accounts Payable.

answer

d. Debit Inventory; credit Accounts Payable.

question

At the end of a reporting period, Maxwell Corporation determines that its ending inventory has a cost of $1,000 and a market value of $800. What would be the effect(s) of the adjustment to write down inventory to market value? a Decrease total assets. b Decrease net income. c Decrease retained earnings. d All of the above.

answer

d. All of the above.

question

For the year, Simmons Incorporated reports net sales of $100,000, cost of goods sold of $80,000, and an average inventory balance of $40,000. What is Simmons' gross profit ratio? a 20%. b 25%. c 40%. d 50%.

answer

a. 20%

question

Using a periodic inventory system, the purchase of inventory on account would be recorded as: a Debit Cost of Goods Sold; credit Inventory. b Debit Inventory; credit Sales Revenue. c Debit Purchases; credit Accounts Payable. d Debit Inventory; credit Accounts Payable.

answer

c Debit Purchases; credit Accounts Payable.

question

Suppose Ajax Corporation overstates its ending inventory amount. What effect will this have on the reported amount of cost of goods sold in the year of the error? a Overstate cost of goods sold. b Understate cost of goods sold. c Have no effect on cost of goods sold. d Not possible to determine with information given.

answer

b Understate cost of goods sold.

question

We normally record a long-term asset at the: a Cost of the asset only. b Cost of the asset plus all costs necessary to get the asset ready for use. c Appraised value. d Cost of the asset, but subsequently adjust it up or down to appraised value.

answer

b Cost of the asset plus all costs necessary to get the asset ready for use.

question

Sandwich Express incurred the following costs related to its purchase of a bread machine. Cost of the equipment 20,000 sales tax 8% 1,600 shipping 2,200 installation 1,400 total costs 25,200 At what amount should Sandwich Express record the bread machine? a $20,000. b $21,600. c $23,800. d $25,200.

answer

d. 25,200

question

Research and development costs generated internally: a Are recorded as research and development assets. b Are capitalized and then amortized. c Should be included in the cost of the patent they relate to. d Should be expensed.

answer

d. Should be expensed

question

Which of the following expenditures should be recorded as an expense? a Repairs and maintenance that maintain current benefits. b Adding a major new component to an existing asset. c Replacing a major component of an existing asset. d Successful legal defense of an intangible asset.

answer

a. Repairs and maintenance that maintain current benefits.

question

Which of the following will maximize net income by minimizing depreciation expense in the first year of the asset's life? a Short service life, high residual value, and straight-line depreciation. b Long service life, high residual value, and straight-line depreciation. c Short service life, low residual value, and double-declining-balance depreciation. d Long service life, high residual value, and double-declining-balance depreciation.

answer

b Long service life, high residual value, and straight-line depreciation.

question

The book value of an asset is equal to the: a Replacement cost. b Asset's cost less accumulated depreciation. c Asset's fair value less its historical cost. d Historical cost plus accumulated depreciation.

answer

b. Assets cost less accumulated depreciation

question

The balance in the Accumulated Depreciation account represents: a The amount charged to expense in the current period. b A contra expense account. c A cash fund to be used to replace plant assets. d The amount charged to depreciation expense since the acquisition of the plant asset.

answer

d The amount charged to depreciation expense since the acquisition of the plant asset.

question

Which of the following statements is true regarding the amortization of intangible assets? a Intangible assets with a limited useful life are not amortized. b The service life of an intangible asset is always equal to its legal life. c The expected residual value of most intangible assets is zero. d In recording amortization, Accumulated Amortization is always credited.

answer

c. The expected residual value of most intangible assets is zero.

question

Equipment originally costing $95,000 has accumulated depreciation of $30,000. If it sells the equipment for $55,000, the company should record: a No gain or loss. b A gain of $10,000. c A loss of $10,000. d A loss of $40,000.

answer

c. A loss of 10,000

question

The return on assets is equal to the: a Profit margin plus asset turnover. b Profit margin minus asset turnover. c Profit margin times asset turnover. d Profit margin divided by asset turnover.

answer

C. Profit margins times asset turnover.

question

Which of the following statements regarding liabilities is not true? (LO8-1) a Liabilities can be for services rather than cash. b Liabilities are reported in the balance sheet for almost every business. c Liabilities result from future transactions. d Liabilities represent probable future sacrifices of benefits.

answer

c. Liabilities result from future transactions.

question

Current liabilities: a May include contingent liabilities. b Include obligations payable within one year or one operating cycle, whichever is shorter. c Can be satisfied only with the payment of cash. d Are preferred by most companies over long-term liabilities.

answer

a. May include contingent liabilities.

question

If Express Jet borrows $100 million on October 1, 2015, for one year at 6% interest, how much interest expense does it record for the year ended December 31, 2015? a $0. b $1 million. c $1.5 million. d $6 million.

answer

c. 1.5 million

question

We record interest expense on a note payable in the period in which: a We pay cash for interest. b We incur interest. c We pay cash and incur interest. d We pay cash or incur interest.

answer

b. We incur interest.

question

Which of the following is not deducted from an employee's salary? a FICA taxes. b Unemployment taxes. c Income taxes. d Employee portion of insurance and retirement payments.

answer

b. Unemployment taxes

question

The seller collects sales taxes from the customer at the time of sale and reports the sales taxes as: a Sales tax expense. b Sales tax revenue. c Sales tax receivable. d Sales tax payable.

answer

d. Sales tax payable.

question

Management can estimate the amount of loss that will occur due to litigation against the company. If the likelihood of loss is reasonably possible, a contingent liability should be: a Disclosed but not reported as a liability. b Disclosed and reported as a liability. c Neither disclosed nor reported as a liability. d Reported as a liability but not disclosed.

answer

a. Disclosed but not reported as a liability

question

Smith Co. filed suit against Western, Inc., seeking damages for patent infringement. Western's legal counsel believes it is probable that Western will settle the lawsuit for an estimated amount in the range of $75,000 to $175,000, with all amounts in the range considered equally likely. How should Western report this litigation? a As a liability for $75,000 with disclosure of the range. b As a liability for $125,000 with disclosure of the range. c As a liability for $175,000 with disclosure of the range. d As a disclosure only. No liability is reported.

answer

a As a liability for $75,000 with disclosure of the range.

question

The acid-test ratio is: a Current assets divided by current liabilities. b Cash and current investments divided by current liabilities. c Cash, current investments, and accounts receivable divided by current liabilities. d Cash, current investments, accounts receivable, and inventory divided by current liabilities.

answer

c Cash, current investments, and accounts receivable divided by current liabilities.

question

Assuming a current ratio of 1.0 and an acid-test ratio of 0.75, how will the purchase of inventory with cash affect each ratio? a Increase the current ratio and increase the acid-test ratio. b No change to the current ratio and decrease the acid-test ratio. c Decrease the current ratio and decrease the acid-test ratio. d Increase the current ratio and decrease the acid-test ratio.

answer

b No change to the current ratio and decrease the acid-test ratio.

STUDY

Accounting Compliance With Laws And Regulations Due Professional Care Finance Financial Accounting Introductory Auditing Management

Quickbooks Ch. 2 – Managing Expenses – Flashcards 60 terms

William Jordan

60 terms

Preview

Quickbooks Ch. 2 – Managing Expenses – Flashcards

question

Purchase orders

answer

Non posting transactions, some vendors require to process orders (Webster sports)

question

Vendors are the

answer

people and companies you purchase products and services from. Phone company, office supply store, SUB CONTRACTOR, sales tax agencies

question

To set up new vendor, click

answer

Vendors on the home page, then click new vendor or in my shortcuts, click vendor

question

Quick Add

answer

Add a new vendor without entering other info about that vendor, can go back later to edit it

question

What do you do if a vendor is also a customer

answer

Must create both a vendor record and customer record. Name must be different for both

question

Explain the payment terms 1% 10 Net 30

answer

Bill due in total in 30 days. If pay within ten days, receive 1% discount.

question

Setting a vendor balance when creating New vendor

answer

Not recommended to use Opening Balance field in the New Vendor window, enter each unpaid Bill separately for better tracking

question

Vendor types

answer

Quickbooks allows you to classify vendors into common types, then can create report to see how much spent on each type

question

Tax ID field is where you enter

answer

Social Security Number for individual or Federal Employer Identification Number for a company

question

Custom fields

answer

Can be used to track more info about vendors, click Additional Information Tab to define custom fields

question

Class Field

answer

Can track income and expenses by business unit, department, store location, profit center or other meaningful category. Create separate reports for different classes

question

To turn on class tracking

answer

Edit Menu > Preferences > Accounting Preferences > Company Preferences Tab > Check the Use Class Tracking box

question

Which report shows income and expenses for each class?

answer

Profit and Loss by Class

question

When entering bill and vendor not found, use ______ to add vendor to list

answer

quick add

question

How can you attach an electronic copy of a document to transactions

answer

Click Attach File button in the transaction window

question

To write check, click

answer

Write check in the Home page Banking section

question

To print the check later, turn on the

answer

Print Later checkbox.

question

To use the check register, click

answer

"Use Register" on the Banking Menu or "Check Register" on the Home Page Banking Section

question

For each credit card the company uses to pay bills, set up a

answer

separate credit card account

question

When you record credit card charges, use the

answer

Enter Credit Card Charges Window; use the Enter Bills window to record and pay credit card bills

question

To View the Unpaid Bills Detail report, select

answer

Reports > Vendors & Payables > Unpaid Bill Detail

question

A/P Aging Summary

answer

Summarizes ages of unpaid bills, how much owed to each vendor, breaks down total owed for current billing period and previous billing period, (billing period 30, 60, 90, 120 days.)

question

To pay bills, click

answer

Vendors menu > Pay bills or click Pay bills not he home page

question

To print checks at another time, select the

answer

Print later checkbox in the write checks window

question

Do you have to print checks one by one?

answer

No, you can tell QB to queen up checks you recorded and bill payments you set up to pay by check, and print them in one big batch.

question

To print checks, choose

answer

File menu > Print Forms > checks

question

Check Number

answer

Quickbooks will attempt to automatically fill in the first check number available, if it doesn't match, type it in manually

question

What can you use instead of manually signing checks

answer

Upload a graphic file of the signature using the signature button in the print checks window

question

How do you Void a check in the register?

answer

Use to Go to bottom to find the check in the check register window, select the check to void, right click bill payment or select the shortcut menu, choose Void Bill select

question

When check is voided, the payment amount is ____ and QB adds a checkmark to the _____________ and fills in the memo field with ____________

answer

0.00; checkmark to the cleared cell; void

question

What does the checkmark mean on check

answer

It means the check is reconciled to the bank

question

All voided checks must be listed in the register so that

answer

there are no gaps in check number sequence

question

Voiding a bill payment

answer

will make the bill payable again

question

If you mess up on a check before printing, you can

answer

delete the check

question

If you mess up on a check after printing, you should

answer

void the check

question

Voiding a bill payment will make it

answer

payable again

question

Vendor credits are

answer

credits that a vendor gives you to lower the cost on a bill

question

Recording a vendor credit takes place in the

answer

Enter bills form, then select credit option at the top

question

The Vendor Balance Summary Report shows

answer

how much you owe to each vendor as of the report date you select

question

To examine each accounts payable transaction, use the

answer

Vendor Balance Detail

question

Transaction list by vendor displays

answer

all transactions for each vendor including checks, credit card charges, and credit accounts payable transactions.

question

To print a vendor report, click

answer

Reports menu > Vendors and payable > Choose the report

question

You can display vendor center by: a. Clicking vendors not he home page b. Clicking vendor center in the icon bar c. On the vendor menu, choosing vendor center d. All of the above

answer

question

You can add a vendor in the vendor center by: a. Right clicking within vendors tab and choosing new vendor b. In the vendor center icon bar, clicking new vendor and then choosing new vendor C. In the vendor center icon bar, clicking new vendor and then choosing add multiple vendors D. Pressing Ctrl + N E. All of the above

answer

question

You can pay vendors by: a. Recoding transactions in the check register b. Using write checks to record and print a check without using accounts payable c. Using Enter Bills to record a transaction using Accounts Payable and then using Pay Bills to pay open Bills D. All of the above

answer

question

Which statement is true: A. When you pay a bill, QUIckbooks records the payment in the bank account (or credit card account) and the Accounts Payable account. B. Bill payments increase the balance in your bank account and the Accounts Payable account C. You apply discounts when you enter a bill D. You must use items to fill out a bill

answer

question

Which Quickbooks feature allows you to categorize income and expenses that span different customers, vendors, accounts and time periods? A. Job B. Class tracking C. Customer Types D. Vendor Types E. Job Types

answer

question

Cash Vendor

answer

A vendor who you would typically pay write away, Write Checks as payment Method.

question

Credit Vendor

answer

A vendor who would bill you and you would enter that bill and say the bill. Payment involves Purchase Order, Enter Bills, Pay Bills.

question

Job Costing

answer

tacks expenses for each customer or job, P&L shows income separately for each job

question

3 Ways to pay vendors

answer

Manually write check and record transaction in checking account register; Electronic Fund Transfer and Debit card payments also recorded in register. Use write checks window to write and print checks when no account payable. Use Enter Bills to record accounts payable and Pay bill to pay bill

question

To create a transaction with multiple accounts affected, use the

answer

Splits button at the bottom of the register

question

3 Printer Forms are

answer

Voucher (One check), Standard (Multiple check per page), Wallet (Check with Receipt attached)

question

To pay credit card bill, use the

answer

Write Checks and code the check to the credit card account

question

Vendor list shows the

answer

Vendor name, current balance owed

question

If haven't used a vendor for long time, can make it inactive. Will quickbooks retain info associated with that vendor

answer

Yes but QB hides the vendor from the vendor lists and from vendor drop down lists

question

If want to track expense for each customer or job

answer

Link each expense with the customer or job to which it applies

question

To add subcontractors, add them as

answer

Vendors, when selecting type, choose additional info and click the sub contractor check box.

question

What should you not do to pay a bill in QB

answer

Do not write a check

question

If paying by debit card,

answer

In the check number, put "debit"

STUDY

Economics Education Finance Grants And Loans Higher Education

EverFi – Module 5 Higher Education – Flashcards 13 terms

Julia Rush

13 terms

Preview

EverFi – Module 5 Higher Education – Flashcards

question

Earning Potential

answer

The more money you invest in higher education = higher pay in the workforce

question

Scholarships

answer

Students must apply for these funds and they do not have to be repaid. Awards are based on merit, financial need and/or combination of the two.

question

FAFSA

answer

Free Application for Federal Sudent Aid - Main form used to apply for federal education grants and loans.

question

Unsubsidized Loans

answer

Type of federal student loan in which the government does not pay the interest while student is in school.

question

Subsidized Loans

answer

Type of federal student loan in which the government pays the interest that accrues while student is in school.

question

Stafford Loan

answer

Most common type of federal loan awarded. Based on limits that are set for an individual loan as well financial need.

question

Private Student Loans

answer

Financed by private companies rather than government. Since these interest rates and fees aren't capped by government, they cost more.

question

Perkins Loan

answer

Another common federal student loan. These loans have a set 5% interest rate and a 10 year repayment period.

question

Repayment Period

answer

Amount of time given to an individual to pay back money lent.

question

Grace Period

answer

Amount of time you have to pay back the balance of loan before it starts accruing interest.

question

Grants

answer

Given to students to help pay for education and do NOT have to be repaid. Similar to scholarships.

question

Associate Degree

answer

A degree granted after two years of study, often by a community or junior college.

question

Bachelor's degree

answer

A degree awarded by a college or university for completing undergraduate studies. Usually 4 years.

STUDY

Education Federal Government Finance High School Diploma Higher Education

Module 5 higher education – Flashcards 4 terms

Anna Collins

4 terms

Preview

Module 5 higher education – Flashcards

question

which of the following statements about the FAFSA process are TRUE?

answer

A) you must be a U.S. citizen to submit the FAFSA form. B) you must use the FAFSA to apply for the federal work study program C) you cannot fill out the FAFSA form without your parent/guardian. D) you should only fill out the FAFSA form if you can demonstrate financial need.

question

which of the following correctly pairs a financing option with its description?

answer

A) grants & scholarships-money you earn B) federal student loans-free money C) 529 plan-money you save D) federal work-study program-money you borrow

question

when looking to finance higher education, what is the best order to look for funding source?

answer

A) grants/scholarships-federal students loans-private loans B) private loans-grants/scholarships-federal students loans C) federal students loans-grant/scholarships-private loans D) grants/scholarships-private loans-federal students loans

question

when making college visits, you may be able to?

answer

A) receive reimbursement for your college visit costs B) schedule a tour of the college campus C) attend a college class to see what it's like D) Both B & C E) all of the above

STUDY

Computing Finance Personal Finance

ch 7 pfin – Flashcard 24 terms

Ashlynn Thompson

24 terms

Preview

ch 7 pfin – Flashcard

question

loans made for specific purposes using formally negotiated contracts that specify the borrowing terms and repayment

answer

consumer loans

question

legal note giving the lender the right to see collateral if the borrower defaults on the obligation

answer

collateral note

question

method of calc. interest by computing finance charges on the original loan balance and then adding the interest to that balance

answer

add on method

question

a doc., which lenders are required to supply borrowers that states both the dollar amnt. of fin. charges and the APR applicable to a loan

answer

loan disclosure statement

question

a mortgage on personal property given as security for the payment of an obligation

answer

chattel mortgage

question

process of paying off a loan by taking out another loan

answer

loan rollover

question

loan that is repaid in a series of fixed scheduled payments rather than a lump sum

answer

installment loan

question

firm that purchases notes drawn up by sellers of certain types of merchandise, typically big ticket items

answer

sales finance company

question

legal claim permitting the lender in case the borrower defaults to liquidate the items serving a collatoeral to satisfy the obligation

answer

lien

question

method of calc. finance charges in which interest is computed and then subtracted from the principal with the remainder being disbursed to the borrower

answer

discount method

question

sales finance company that is owned by a manufacturer of big ticket merch. GMAC is a captive fin. company

answer

captive finance company

question

an accumulation of savings in an insurance policy that can be used as a source of loan collateral

answer

cash value

question

The APR on a single payment loan for 1000 dollars

answer

13 %

question

if the discount method is used to calc. a financial charge of 250.6 on a 24000 t/f

answer

false

question

with the discount method the fin. charges are calculated and then added to the amount borrowed t/f

answer

false

question

sometimes it may be better to use savings rather than borrow to make a purchase. this would be recommmended when

answer

the cost of borrowing is greater than the interest earned on the savings

question

the purchase of credit life insurance is highly recommended by most financial planning experts t/f

answer

false

question

if the add on method is used to calculate a finance charge of 100.8 on a 1800 dollar loan the amount to be repaid would be 1900.8 t/f

answer

true

question

collateral is an item of value used to secure the principal portion of a loan t/f

answer

true

question

a personal consumers loan could be used to

answer

all

question

_____ loans dont have to be repaid until after you graduate from college

answer

stafford and perkins

question

consumer fin. compaines usually charge lower rates of interest than comm. banks t/f

answer

false

question

the highest interest rate installment loans are usually made by

answer

consumer finance companies

question

consumer loans like open account credit result from a rather than informal process t/f

answer

false

STUDY

Certificate Of Deposit Economics Federal Open Market Committee Federal Reserve System Finance Personal Finance

Everfi Modules 1, 2, 3, 4, 5, 6, 7, 8, 9 Final Quiz Questions and Answers Flashcard 90 terms

Maddison Bailey

90 terms

Preview

Everfi Modules 1, 2, 3, 4, 5, 6, 7, 8, 9 Final Quiz Questions and Answers Flashcard

question

Interest is - a charge for lending money to a bank - the amount owed for borrowing money - the amount added into your savings when opening a bank account - a charge for the convenience of accessing money stored in your bank account

answer

the amount owed for borrwoing money

question

Which of the following is a type of savings vehicle? • Certificate of Deposit • Money Market Account • Checking Account • Both A &B

answer

Both A &B

question

John just opened a savings account and wants to maximize the amount of interest he earns. Which of the following actions would enable him to earn MORE interest? - Selecting an account with a high interest rate. - Leaving his money in the account for long period of time. - Transferring money into his checking account each month. - Both A & B

answer

Both A & B

question

You are opening a savings account that earns compound interest. Which compounding frequency will earn you the MOST money? - Compounding 1 time a year - Compounding 4 times a year - Compounding monthly - Compounding daily

answer

Compounding daily

question

To earn as much interest as possible, you should open a savings account that earns _______ interest and has the ______ interest rate. • compound; lowest • compound; highest • simple; lowest • simple; highest

answer

compound; highest

question

The purpose of a budget is to: • help you plan how you will spend the money you earn or receive • stop you from spending too much money • increase the balance of your savings account • tell you how much you owe the government in taxes

answer

help you plan how you will spend the money you earn or receive

question

Which of the following savings vehicles usually requires a high minimum balance? • Simple savings account • Certificate of Deposit (CD) • Checking account • All of the above

answer

Certificate of Deposit (CD)

question

Which of the following is generally true about savings vehicles? • Savings vehicles are only useful for long-‐term investments • People should evaluate different forms of savings vehicles based on their needs • Savings vehicles are never insured • All of the above

answer

People should evaluate different forms of savings vehicles based on their needs

question

Which of the following accounts will give you the LEAST access to your money? • Simple savings account • Certificate of Deposit (CD) • Checking account • Cash

answer

Certificate of Deposit (CD)

question

When it comes to saving money, what is a good rule of thumb? • Keep most of your savings in your checking account • Put aside money for savings each month • Choose the savings account with the lowest interest rate • Putting anything you can't afford on your credit card

answer

Put aside money for savings each month

question

Which of the following is a unique feature of credit unions? • Credit unions are typically owned and run by their members. • Credit unions limit membership to certain people or groups. • Credit unions offer a wide variety of banking services. • Both A & B

answer

Both A & B (correct answer)

question

The best way to ensure the accuracy and safety of your accounts is to: • Monitor your online accounts regularly • Shred your paper account statements weekly • Balance your checkbook annually • Call your customer service center daily

answer

Monitor your online accounts regularly

question

Which of the following represent typical account fees? - ATM fee - Service fee - Minimum balance fee - All of the above

answer

question

Which of the following is NOT one of the responsibilities of the Federal Reserve? • Supervising the Reserve banks • Establishing the federal budget • Maintaining a stable banking system • Setting the nation's monetary policy

answer

Establishing the federal budget

question

The three parts of the Federal Reserve System are the Reserve Banks, the Federal Open Market Committee (FOMC), and the: • Board of Governors • United States Mint • Department of the Treasury • Secretary of State

answer

Board of Governors

question

Which type of account is typically the MOST liquid? - Checking account - Savings account - Certificate of Deposit - Exchange Traded Fund

answer

question

What's the best strategy for avoiding ATM fees? - Only use ATMs close to your house - Only use ATMs to withdraw cash - Only use ATMs in your bank's network - Only use ATMs you have used before

answer

question

What's the purpose of balancing or monitoring your checking account? • To help you calculate how much money you have in your account • To keep an estimation of how many checks you write • To find out which checks you have bounced • To stop identity theft from occurring

answer

To help you calculate how much money you have in your account (

question

What part of a check is the LEAST important? • memo line • signature line • routing number • The check number

answer

memo line

question

Savings accounts usually offer _________ interest rates than checking accounts. It is _________ to access your money in a savings account than in a checking account. • lower; easier • higher; harder • lower; harder • higher; easier

answer

higher; harder

question

Which of the following statements comparing debit cards to credit cards is TRUE? • Debit cards allow you to draw funds directly from your checking account. • Debit cards typically offer greater fraud protection than credit cards. • Debit cards never require a signature to finalize a purchase like credit cards. • Debit cards charge higher interest rates on purchases than credit cards.

answer

Debit cards allow you to draw funds directly from your checking account. (correct answer)

question

Making a minimum payment: • Means you are paying a small portion of your total credit card debt • Is the same thing as making a late credit card payment • Will have a negative effect on your credit score • Will cause your credit card to be cancelled

answer

Means you are paying a small portion of your total credit card debt (correct answer)

question

What is a credit card balance? • The amount of interest you must pay the credit card company • The required minimum payment to your credit card company • A way to track your incoming and outgoing purchases • The amount of money you still owe to the credit card company

answer

The amount of money you still owe to the credit card company (correct answer)

question

Which of the following is NOT a common credit card fee? • Late fee • Annual membership fee • Balance transfer fee • Minimum payment fee

answer

Minimum payment fee (correct answer)

question

What payment type can help you stick to a budget? • Credit cards • Debit cards • Payday loans • Cash advances

answer

Debit cards (correct answer)

question

Which of the following payment types require you to pay upfront? • Money order • Cashier's check • Prepaid card • All of the above

answer

All of the above (correct answer)

question

The annual percentage rate on a credit card determines: • The amount of interest you are charged on credit card purchases • The amount your credit limit can go up within a year • How many credit cards that you can own • None of the above

answer

The amount of interest you are charged on credit card purchases (correct answer)

question

Which of the following can increase your credit card's APR? • Paying the minimum • Missing a credit card payment • Paying off the full balance • Cashing in on rewards points

answer

Missing a credit card payment (correct answer)

question

If you are planning to carry a large balance on your credit card, which of the following credit card features should you look for? • Low APR • Low annual fees • Lots of credit card rewards • A large credit limit

answer

Low APR (correct answer)

question

Which payment method typically charges the highest interest rates? • Credit cards • Cashier's checks • Prepaid cards • Payday loans

answer

Payday loans (correct answer)

question

Which of the following MOST influences your credit score? • Types of Credit Used • Payment History • Length of Credit History • Amounts Owed

answer

Payment History (correct answer)

question

Which of the following actions would IMPROVE your credit score? • Closing out old credit cards • Paying off your credit card bill • Using a large portion of your credit limit • Opening a new savings account

answer

Paying off your credit card bill (correct answer)

question

How many free credit reports are you legally entitled to each year? • One credit report each year • Three credit reports each year • One credit report from each credit bureau • Three credit reports from each credit bureau

answer

One credit report from each credit bureau (correct answer)

question

All of the following make up the big three credit reporting agencies EXCEPT: • Federal Reserve • Experian • Equifax • TransUnion

answer

Federal Reserve (correct answer)

question

Which of the following actions can NEGATIVELY impact your credit score? • You disputed an item on your credit report. • You forgot to pay the cable bill. • You pay all your bills in cash. • You use a small amount of your available credit.

answer

You forgot to pay the cable bill. (correct answer)

question

Having a low credit score can make it more difficult to: • Obtain a car loan • Open a new credit card • Secure an apartment lease • All of the above

answer

All of the above (correct answer)

question

Which of the following actions has NO impact on your credit score? • You inquire about a credit card charge. • You use a large percentage of your credit limit. • You opened several new credit cards last week. • You send in your credit card payment a couple days late.

answer

You inquire about a credit card charge. (correct answer)

question

Which of the following statements about credit scores is TRUE? • Credit scores reflect how likely individuals are to repay their debts. • Credit scores range from the low 300's to the mid 800's. • Each person has three credit scores. • All of the above.

answer

All of the above. (correct answer)

question

Having a good credit score is important because: • It can impact your ability to get a driver's license. • It can impact your ability to be approved for bank loans. • It can impact how much you will have to pay the government in taxes. • It can impact how much you will have to pay for college.

answer

It can impact your ability to be approved for bank loans. (correct answer)

question

Which action is LEAST important to maintaining a healthy credit score? • Make on‐time payments • Check your credit report annually • Know your exact credit score • Fix inaccurate information on your credit report

answer

Know your exact credit score (correct answer)

question

When referring to student loans, what is a grace period? • The time period between graduating college and starting your first job when you don't have to pay back student loans • The period after graduating or leaving school before you must begin paying back student loans • The amount of time you have to pay back your entire student loan amount - None of the above

answer

The period after graduating or leaving school before you must begin paying back student loans (correct answer)

question

Which of the following loans will typically offer the lowest interest rate? • Payday loan • Federal Student Loan • Private Loan • Both A & B

answer

Federal Student Loan (correct answer)

question

The Federal Application for Student Aid (FAFSA) form: • must be completed by your guidance counselor • can be submitted on online or by mail • can only be filled out by U.S. citizens • is used to apply for private loans

answer

can be submitted on online or by mail (correct answer)

question

You are looking for ways to pay for your higher education costs. Which of the following options will require you to pay back any money you receive? • Grants • 529 plans • Federal student loans • Scholarships

answer

Federal student loans (correct answer)

question

Your sister is starting 9th grade next year and is thinking about going to college. What step would you recommend she take first? • Fill out her FAFSA form • Sign up for college admission exams • Start applying for grants & scholarships • Look for school clubs & organizations she's interested in

answer

Look for school clubs & organizations she's interested in (correct answer)

question

After you send in your FAFSA form, what will you receive back? • Your IRS Data Retrieval Form • Your Student Aid Report • A copy of your family's tax returns • A copy of your completed FAFSA form

answer

Your Student Aid Report (correct answer)

question

Using the FAFSA form, you can apply for: • Federal student loans • The federal work-‐study program • Private loans • Both A & B

answer

Both A & B (correct answer)

question

Which of the following statements about federal student loans is TRUE? • The interest rate on your loan will be fixed over time. • The interest rates on federal loans and private loans are similar. • You can only get federal student loans if you demonstrate financial need. • You do not accumulate interest on federal loans.

answer

The interest rate on your loan will be fixed over time. (correct answer)

question

The return on investment (ROI) from education is typically the highest for: • A high school graduate • A college applicant • Someone with a 2‐year (Associate) degree • Someone with a 4‐year (Bachelor's) degree

answer

Someone with a 4‐year (Bachelor's) degree (correct answer)

question

Which loan type requires you to make loan payments while you're attending school? • Unsubsidized federal loan • Subsidized federal loan • Both A & B • Neither A nor B

answer

Neither A nor B (correct answer)

question

Jim is in the market for a car, but he'll probably only need it for a couple of years. After that, he plans on moving into the city and using public transportation. He has a short commute to work, so he won't be putting many miles on his vehicle. What's the best transportation option for Jim? • Use his savings to buy the car in full • Buy the car using an auto loan • Lease the car • Take public transportation

answer

Lease the car (correct answer)

question

All of the following components are commonly found in rental housing agreements EXCEPT: • Whether the renter can have pets in the house • How much the renter will pay • What type of renter's insurance the renter must buy • Which repair types the renter will be responsible for

answer

What type of renter's insurance the renter must buy (correct answer)

question

What is a mortgage? • A type of rent used to pay for housing • A type of loan used to buy property • A measure of the value of a home • A measure of your credit rating

answer

A type of loan used to buy property (correct answer)

question

What is a mortgage? • A type of rent used to pay for housing • A type of loan used to buy property • A measure of the value of a home • A measure of your credit rating

answer

A type of loan used to buy property (correct answer)

question

A _________ is generally considered an appreciating asset because it will _________ in value over time. • car; increase • car; decrease • house; increase • house; decrease

answer

house; increase (correct answer)

question

Renting provides _________ flexibility but can lead to _________ costs in the long-‐term. • greater; lower • greater; higher • less; lower • less; higher

answer

greater; higher (correct answer)

question

John would like to move from the suburbs into the city, but the rent in the city is very high. John has found an apartment he really likes, but he can only afford about 60% of the monthly rent. What is the best housing option for John? • Purchase a home in the city center instead. • Rent the apartment anyway. • Rent the apartment with a roommate. • Purchase a home in the suburbs instead.

answer

Rent the apartment with a roommate. (correct answer)

question

Which of the following are costs associated with owning a car? I. Fuel II. Insurance III. Repairs IV. Wear & Tear fees• I, III, and IV • I, II, and IV • I, II and III • I, II, III, and IV

answer

I, II and III (correct answer)

question

Someone may choose to own a car instead of leasing because: • The car can be resold later to make some money back. • The car can be resold later for a higher price. • The maintenance costs for a leased car are generally higher. • The insurance costs for a leased car are higher.

answer

The car can be resold later to make some money back. (correct answer)

question

One reason to buy a home instead of rent a home is: • Homes have the potential to appreciate in value over time. • Homes have few maintenance costs. • Buying a home requires less money upfront. • Buying a home is a more flexible housing option.

answer

Homes have the potential to appreciate in value over time. (correct answer)

question

Which of the following are NOT deducted on a typical paystub: • Sales tax • Social security tax • State income tax • Medicare tax

answer

Sales tax (correct answer)

question

Which of the following statements about taxes is FALSE? • Taxes are collected at the local, state and federal level • Taxes at the local, state and federal level are all equal • Some states don't collect sales tax. • Some states don't collect income tax

answer

Taxes at the local, state and federal level are all equal (correct answer)

question

Insurance can help you: • minimize monthly expenses • protect against unexpected accidents • reduce the chances of getting into an accident • cover all out‐of‐pocket costs

answer

protect against unexpected accidents (correct answer)

question

When starting a new job, the form you complete to determine how much tax to withhold from your paycheck is the _______. • 1040 EZ • 1099 • W-2 • W-4

answer

W-4 (correct answer)

question

When you purchase an item in a store, you may be charged __________. • income tax • capital gains tax • sales tax • property tax

answer

sales tax (correct answer)

question

Your auto insurance policy has a $200 monthly premium and $700 deductible. What is the maximum amount you will have to pay out-of‐pocket before your insurance covers your costs? • $200 • $500 • $700 • $900

answer

$700 (correct answer)

question

Jan pays $70 each month for her auto insurance policy. This regular payment is called a: • co-‐pay • deductible • premium • claim

answer

premium (correct answer)

question

Which of the following typically have the highest insurance premiums. • Drivers who travel long distances • Drivers who have safe driving records • Older, experienced drivers • Young, inexperienced drivers

answer

Young, inexperienced drivers (correct answer)

question

In which of the following scenarios will you be entitled to pay the least amount of money out-of‐pocket for medical expenses? • You have no insurance. • You have health insurance with a $500 deductible. • You have auto insurance with a $700 deductible. • You have health insurance with a $1,500 deductible.

answer

You have health insurance with a $500 deductible. (correct answer)

question

You have an insurance policy with the terms listed below. How much should you expect to pay the insurance company each month for coverage? YOUR INSURANCE PLAN: Premium = $300/month; Deductible = $500 • $200 • $300 • $500 • $800

answer

$300 (correct answer)

question

Consumer protection laws are meant to: • Protect consumers from spending too much money. • Prevent consumers from buying unnecessary items. • Protect businesses from consumers. • Prevent unfair or deceptive business practices.

answer

Prevent unfair or deceptive business practices. (correct answer)

question

The best way to investigate fraudulent transactions on your credit card is to: • Keep track of your monthly budget. • Review all old bank statements. • Keep a copy of your bank statements in a safe place. • Review your recent credit card statements.

answer

Review your recent credit card statements. (correct answer)

question

The safest action to take if someone claiming to be from your bank calls you to ask for account information is to: • Pull up the bank website and compare information. • Hang up and call back using the bank's official phone number. • Ask the caller to explain the account information they need in more detail. • Provide only your name and account number.

answer

Hang up and call back using the bank's official phone number. (correct answer)

question

What is the first action you should take if you suspect there has been a fraudulent charge on your credit card? • Close all bank accounts associated with that credit card. • Contact the credit card company to report the fraudulent charge. • Order your credit report to look for other fraudulent activity. • Call the store where the purchase was made and ask them to remove the charge.

answer

Contact the credit card company to report the fraudulent charge. (correct answer)

question

What is the safest way to dispose of old bank account statements? • Shred them in a paper shredder. • Throw them out in a neighbor's trash. • Keep them bundled together in a folder. • Put them in the trash unopened.

answer

Shred them in a paper shredder. (correct answer)

question

It is generally safe to provide your Social Security Number to: • Anyone who asks you for it. • Close friends and relatives who do not know it. • School personnel who want to have it on record. • Verified trusted sources that need it.

answer

Verified trusted sources that need it. (correct answer)

question

Identity thieves can use your personal information to: • Open a credit card • Sign up for electricity service • Get a cell phone contract • All of the above

answer

All of the above (correct answer)

question

Which action will be least helpful if you've been the victim of identity theft? • Withdraw your money from all accounts. • Report the fraud to each credit bureau. • Ordering your latest credit report. • Contact your bank and credit card companies.

answer

Withdraw your money from all accounts. (correct answer)

question

Which document puts you at the least risk of identity theft? • Cash receipts • Paycheck stubs • Pre-approved credit card offers • Old tax records

answer

Cash receipts (correct answer)

question

Which of the following is the BEST way to protect against identity theft? • Discard old account statements weekly. • Use only local public access Wi‐Fi. • Change online account passwords frequently. • Avoid emails from people who do not like you.

answer

Change online account passwords frequently. (correct answer)

question

When it comes to investing, what is the typical relationship between risk and return? • It depends on the investment mix in your portfolio. • The greater the potential risk, the smaller the potential return. • The greater the potential risk, the greater the potential return. • There is no relationship between risk and return.

answer

The greater the potential risk, the greater the potential return. (correct answer)

question

Diversification is important in investing because... • It helps you to balance your risk across different types of investments • It increases your overall risk, which guarantees that you will make more money • It ensures that you only make low-‐risk investments • It helps you gain the highest rate of return despite any risks.

answer

It helps you to balance your risk across different types of investments (correct answer)

question

Which best describes the difference between stocks and bonds? • Stocks allow investors to own a portion of the company; bonds are loans to the company. • Stocks are a more reliable investment; bonds tend to be more volatile. • Stocks pay interest to investors throughout the year; bonds only pay interest at fixed times during the year. • Stocks allow investors to share in profits; bonds make investors responsible for company debts.

answer

Stocks allow investors to own a portion of the company; bonds are loans to the company. (correct answer)

question

What is the primary reason to issue stock? • To help investors earn a higher rate of return • To raise money to grow the company • To distribute the risk of bankruptcy across more investors • To increase investor awareness of the company

answer

To raise money to grow the company (correct answer)

question

How can investors receive compounding returns? • By selecting a savings account that has a higher interest rate • By investing their earnings back into their original investment • By transferring their earnings into a high‐risk investment • By diversifying their investment portfolio

answer

• By investing their earnings back into their original investment (correct answer)

question

If an investment is considered "volatile", it means... • the investment will experience rapid growth over time. • the investment is high‐risk, and will its price will increase quickly. • the value of the investment may be hard to predict. • the investment is undervalued and may increase over time.

answer

• the value of the investment may be hard to predict. (correct answer)

question

Which of the following would be considered the highest risk portfolio? • A portfolio made up of 20% savings accounts, 50% mutual funds, and 30% bonds. • A portfolio made up of 40% mutual funds, 40% Treasury bonds, and 10% stocks. • A portfolio made up of 70% mutual funds, 10% stocks, and 20% Treasury bonds. • A portfolio made up of 60% stocks, 30% mutual funds, and 10% Treasury bonds.

answer

• A portfolio made up of 60% stocks, 30% mutual funds, and 10% Treasury bonds. (correct answer)

question

When you buy a ____ , you are loaning money to an organization. • Index fund • Stock • Mutual fund • Bond

answer

• Bond (correct answer)

question

Which of the following correctly orders the investments from LOWEST risk to HIGHEST risk? • Treasury bond − Stock − Diversified mutual fund • Stock − Treasury bond − Diversified mutual fund • Treasury bond − Diversified mutual fund - Stock • Diversified mutual fund − Treasury bond − Stock

answer

• Treasury bond − Diversified mutual fund - Stock (correct answer)

question

Which of the following is generally true about 401(k) and 403(b) retirement plans? • They are plans offered through employers • They offer some tax benefits • They restrict when you can withdraw your money • All of the above

answer

• All of the above (correct answer)

STUDY

Average Total Cost Economics Finance

Unit 3 AP Economics Vacab – Flashcards 1 terms

Jaxon Craft

1 terms

Preview

Unit 3 AP Economics Vacab – Flashcards

question

What is the Primary goal of most firms?

answer

Maximizing their Profit

STUDY

Finance Ford Motor Company Stocks And Bonds United States

Fin 301 Test 2 True/False – Flashcards 19 terms

Jennifer Hawkins

19 terms

Preview

Fin 301 Test 2 True/False – Flashcards

question

In the long run stocks typically have a higher rate of return than that of bonds

answer

True

question

You may reinstate your lapsed life insurance policy without answering health related questions again

answer

False

question

The cash value of a whole life insurance policy can be used as a source of loan collateral

answer

True

question

Avoiding alcoholic beverages while driving is an example of risk reduction

answer

True

question

Stafford loans may be subsidized or unsubsidized

answer

True

question

The basic purpose of insurance is to protect you from the results of accidental losses.

answer

True

question

All types of life insurance offer a cash surrender value

answer

False

question

One should typically name both primary and contingent beneficiaries for life insurance policies

answer

True

question

When you stop making premium payments on a whole life policy, the protection is immediately forfeited

answer

False

question

If a loan has a prepayment penalty, there will be an additional cost to repay the loan early

answer

True

question

Borrowing to pay for a college education is a legitimate use of credit

answer

True

question

Life insurance death benefits are not subject to income Tax

answer

True

question

Investing is considered a short term activity that involves the buying and selling of securities

answer

False

question

Whole life policies typically provide a high investment rate of return

answer

False

question

Commercial banks are generally more selective in granting loans than finance companies.

answer

True

question

Spreading risk among large number of people is a major principle of life insurance

answer

True

question

A no load, low expense mutual fund is not a smart choice for investing

answer

False

question

Term Insurance is generally the most economical form of life insurance for young families

answer

True

question

The needs approach to evaluate the right amount of life insurance is the most accurate method to determine the proper amount of death benefits.

answer

True

STUDY

Accounting Finance Financial Accounting Intermediate Accounting 1 Multiple Step Income Statement

College Accounting – A Practical Approach – 13th Edition Slater (JEG) Chapter 10 – Flashcards 17 terms

Roman Peck

17 terms

Preview

College Accounting – A Practical Approach – 13th Edition Slater (JEG) Chapter 10 – Flashcards

question

Purchases

answer

Account that records the cost of merchandise for resale. Debit Balance

question

Purchases Returns and Allowances

answer

Contra-cost (credit balance) account that records amount for defective or unacceptable merchandise returned to suppliers. (Price reduction given for defective items)

question

Purchase Discount

answer

Contra-cost (credit balance) that records discounts offered by vendors.

question

F.O.B Destination (free on board)

answer

Freight charge seller is responsible for to the purchaser's destination.

question

F.O.B Shipping Point (free on board)

answer

Freight charge purchaser is responsible for from the seller's shipping point to purchaser's location.

question

Purchase Requisition

answer

Form used in a business asking the purchase department to buy specific goods.

question

Purchase Order

answer

Form used in a business used to place an order for buying goods from a seller.

question

Purchase Invoice

answer

Sales invoice sent to purchaser from the seller.

question

Receiving Report

answer

Form used to verify the exact merchandise that was ordered and received in good condition.

question

Invoice Approval Form

answer

Form used by accounting department to check and approve for recording and payment.

question

Accounts Payable Subsidiary Ledger

answer

Book/File that contains the name of the creditor and amount owed from purchases on account. Listed in alphabetical order. Accounts Payable is the controlling account.

question

Debit Memorandum

answer

Memo issued by customer to a seller that indicates the return or allowance has occurred.

question

Controlling Account

answer

Account in the general ledger that summarizes or controls a subsidiary ledger. After postings are complete, it shows the total amount owed from purchases made on account.

question

Perpetual Inventory System

answer

Inventory system that continually monitors its levels of inventory. Records units on hand at the beginning of the accounting period, units sold, and current balance after each sale or purchase.

question

Periodic Inventory System

answer

Inventory system that, at the end of each accounting period, calculates the cost of the unsold goods on hand.

question

Merchandise Inventory

answer

Asset and perpetual inventory system account that records purchases of merchandise. Discounts and returns are recorded in this account for the buyer.

question

Costs of Goods Sold

answer

An account that records the cost of merchandise inventory used to make the sale. Used in a perpetual inventory system.

STUDY

Finance Personal Finance

Wealth Building and College Savings – Flashcards 52 terms

Marlon Riddle

52 terms

Preview

Wealth Building and College Savings – Flashcards

question

ONce the emergency fund is in place, you should begin _____ and ____ _____, which falls within long term investing for wealth building

answer

retirement; college funding

question

Baby step 1 is?

answer

$1,000 in the bank

question

Baby step 2 is?

answer

Debt snowball

question

Baby step 3 is?

answer

3-6 months of expenses in an emergency fund

question

Baby step for is?

answer

investing 15% of your household income into Roth IRAs and pre tax retirement plans

question

Tax-favored means that the investment is a _____ _____ or has a special tax treatment

answer

qualified plan

question

Four main duties of the Federal Reserve?

answer

1) carries out nation's monetary policies by managing the supply of money 2) supervises and regulates banking institutions 3) maintains the stability of the financial system 4) provides financial services to banks

question

What is the Federal Deposit Insurance Corporation responsible for?

answer

insuring or guaranteeing deposits in banks and savings institutions up to $100,000

question

What does IRA stand for?

answer

Individual Retirement Arrangement

question

What does SEPP stand for?

answer

Simplified Employee Pension Plan

question

What are the "Qualified Plans"?

answer

IRA, SEPP, 401(k), 403(b), and 457

question

What it comes to IRAs, everyone with an _____ income is eligible

answer

earned

question

the maximum annual contribution for income earners for IRA is _____

answer

$5,000

question

The Roth IRA is an _____ tax

answer

after

question

The Roth IRA has more _____

answer

choices

question

The Roth IRA has a higher _____ at retirement

answer

bracket

question

The Roth IRA has no taxes when you cash it out so it forces you to _____ more

answer

invest

question

The Roth IRA has tons of _____

answer

flexibility

question

Who is eligible for the Roth IRA?

answer

singles with income less than $95,000; married couples with income less than $150,000

question

tax-free and penalty-free withdrawals at any time equal to _____. After the emergency fund is depleted, you have a _____ _____

answer

contributions; fall back

question

After _____ years, you can make tax-free, penalty-free withdrawals for 100%

answer

question

You can make tax-free, penalty-free withdrawals for the Roth IRA based on what conditions?

answer

over 59.5, death/disability, first time home purchase ($10,000 max)

question

a _____ _____ person may deduct up to _____ of their net profit on the business by investing in a SEPP

answer

self employed; 15%

question

The maximum deductible amount is _____; all employees who have bene with the firm more than _____ of the last _____ years must receive the same percentage of their pay into a retirement plan

answer

$45,000; 3; 5

question

most companies have completely done away with traditional _____ plans

answer

pension

question

pensions have been replaced by _____ _____ and _____ plans, like the 401(k)

answer

self funded; matching

question

_____ is found in non-profit organizations such as churches, hospitals, and schools

answer

403(b)

question

the _____ is deferring compensation

answer

457

question

Do not use a _____ Investment Contract or bond funds to fund your plan

answer

Guaranteed

question

You should _____ over retirement plans to a _____ when you leave the company

answer

roll; IRA

question

Don't bring the money home, instead, move it straight into an IRA by a _____ _____

answer

direct transfer

question

Roll over to Roth IRA only if:

answer

you have over $700,000 by age 65, you can afford to pay taxes separately, not from the IRA,

question

Never _____ on your retirement plan

answer

borrow

question

_____ in the Common stock fund, _____ in the Small Company Agressive fund, and _____ in the International fund

answer

60%; 20%; 20%

question

Complete 15% of income by going back to your _____ or other company plans

answer

401(k)

question

Save for college by using _____ _____ _____, nicknamed "Education _____"

answer

Educational Savings Accounts; IRA

question

If you want to save more or if you don't meet the income limits for an ESA, use a certain type of _____ plan

answer

529

question

Never buy a plan that ____ your options and automatically changes your investments based on the _____ of the child

answer

freezes; age

question

What does UTMA/UGMA stand for?

answer

Uniform Transfer/Gift to Minor Act

question

The account is listed in the _____ name and a _____ is named

answer

child's; custodian

question

3 "Nevers" of College Savings

answer

never use insurance, never use savings bonds, never use pre-paid tuition

question

If you need money within five years, use a _____ _____ _____ _____

answer

money market mutual fund

question

Retirement for self-employed people

answer

SEPP

question

grows tax free

answer

Roth IRA

question

typical retirement plan found in most corporations

answer

401(k)

question

Used for college savings

answer

ESA

question

the typical retirement plan found in non-profit groups

answer

403(b)

question

true or false: pre tax means the gov't is letting you invest money before taxes have been taken out

answer

true

question

true or false: savings bonds are a good way to save for college

answer

false

question

true or false: never borrow money form your retirement plan unless you are trying to avoid bankruptcy

answer

true

question

what are retirement plans?

answer

401(k), 403(b), 457

question

Which is not a benefit of the Roth IRA?

answer

unlimited contributions

STUDY

Finance Financial Accounting Personal Finance Time Value Of Money

Personal Finance Test one (turner) – Flashcards 66 terms

Patrick Marsh

66 terms

Preview

Personal Finance Test one (turner) – Flashcards

question

Being Financially secure involves balancing what you earn with a. your current level of debt b. your retirement plans c. your investments d. what you spend

answer

question

In order for your financial plan to be realistic and attainable it needs to be based upon your a. income level b. budget c. number of tax deductions, exemption,exclusions, and credits d. balance sheet e. none of the above

answer

question

Which of the following is NOT one of the five basic steps in personal financial planning? a. develop a plan of action b. define your financial goals c. implement your plan d. let an accountant review your plan e. evaluate your financial health

answer

question

Which of the following steps are considered to be part of the personal financial planning process as outlined in the text? a. implement your plan b. evaluate your financial health c. develop your plan of action d. define your financial goals e. all of the above

answer

question

Suppose that you just completed your first year of college with $11000 in loans and plan to borrow the maximum each year from now until graduation. You never accounted for the way you spend your money, do not have a budget, and want to insure that you will be able to repay your loans after college. What is the most important thing you can do right now? a. ask a friend who took the Personal Finance course for advice b. visit your career counselor at school c. talk to your parents about an allowance d. immediately begin to develop a personal finance plan

answer

question

The term that considers having money readily available when you need it is the concept of a. equity b. liquidity c. flexibility d. solvency e. none of the above

answer

question

An economic condition in which rising prices reduce the purchasing power of money is termed a. inflation b. cash erosion c. deflation d. stagnation e. none of the above

answer

question

Jacob has written down his short-term goals for the next year on his goals worksheet. So far he has prioritized his goals, he has determined a feasible due date by which he wants to have achieved his goals; according to the textbook, the final step Jacob needs to complete his goals process is to a. email himself a copy of the goals worksheet in case he loses the paper copy of the worksheet b. determine an appropriate cost of each of his listed goals c. post his goals worksheet on his refrigerator so he can see it everyday d. contact his financial advisor for approval of his goals

answer

question

What is the main factor in determining your potential income level? a. age and years of employment b. education and skills you have attained c. who you know in your company administration d. the size of the company you work for

answer

question

Which of the following statements applies to obtaining an undergraduate college degree? a. it may be the single best investment you will ever make b. all of the above c. They are expensive and rarely pay off in increased earnings d. there is no relationship between personal wealth and earning a college degree

answer

question

Which of the following statements applies to obtaining an undergraduate degree? a. all of the above b. It may be the single best investment you will ever make c. There is no relationship between personal wealth and earning a college degree d. they are expensive and rarely pay off in increased earnings

answer

question

According to the Rockefeller Foundation report, which of the following issues do Americans rank as number one in terms of causing the most concern? a. retirement b. medical expenses c. debt d. unemployment

answer

question

According to your text what percentage of Americans could only go 2 weeks without experiencing financial hardships? a. 40 percent b. 30 percent c. 20 percent d. 50 percent

answer

question

Which of the following is outlined in the text as reason(s) why many people do not have an adequate financial plan? a. There is never enough time for organizing and planning b. Many of us lack the proper knowledge c. For most people it is easier to spend than save. d. procrastination can affect everyone. e. all of the above are common excuses for not planning

answer

question

Chapter 1 discusses ten principles that form the foundation of personal finance. The principle that considers that one expects to earn additional return for increasing investment risk is the ______________ principle. a. mind games and your money b. risk and return go hand in hand c. nothing happens without a plan d. the best protection is knowledge

answer

question

The concept that emphasizes that people should not put all their eggs in one basket is a. the farmers analogy b. liquidity is first c. the curse if competitive business markets d. diversification reduces risk

answer

question

What piece of advice might you give to someone for whom the act of saving is an after thought? a. Money isn't everything b. don't put all your eggs in one basket c. pay yourself first d. None of the above

answer

question

Which of the following adheres to the financial principle "just do it?" a. pay yourself last b. it's much easier to save than to spend c. the amount you can spend is what's left after you put aside your savings d. all of the above

answer

question

Which of the following falls under the category of mind games and your money? a. mental accounting b. viewing your tax refund as "mad money" c. the sunk cost effect d. all of the above

answer

question

If liquid funds are not available, an unexpected need, such as a job loss or injury may force you to a. take on unexpected debt repayments b. cash in a longer-term investment c. borrow money fast d. all of the above

answer

question

Assets that you purchase for the purpose of accumulating wealth to satisfy your financial goals are called a. investment assets b. monetary assets c. intangible assets d. all of the above are correct

answer

question

Liabilities are best described as a. intangible obligations b. financial debts and obligations that you owe c. assets that depreciate over time d. monetary items that you own e. your net worth

answer

question

Fair market value refers to a. what you paid when you purchased an asset b. what an asset could be sold for today c. how the price of an asset has changed since its original purchase d. what an asset will be worth at some point in the future

answer

question

Your net worth, or your general level of financial worth, is found by a. dividing monthly debt (less mortgage payment) by monthly income b. subtracting your liabilities from your assets c. dividing your monetary assets by your current liabilities d. subtracting your expenses from your income e. subtracting current liabilities from monetary assets

answer

question

An expenditure over which you have no control and are obligated to make is a a. fixed expenditure b. contractual expenditure c. long-term expenditure d. repeating expenditure e. constant expenditure

answer

question

An expenditure that you can control over time and that you can manage is a(n) a. adjustable expenditure b. variable expenditure c. fixed expenditure d. short-term expenditure e. constant expenditure

answer

question

How would an income statement benefit one in creating a financial plan? a. Know where one's money is going b. spot problem areas of over spending c. determine whether one is earning more than one spends d. determine if money is available for saving or investment e. all of the above

answer

question

If your liabilities are greater than the value of your assets you are considered a. bankrupt b. unbalanced c. insolvent d. unstable

answer

question

Which questions do financial ratios help you answer? a. Do I have the ability to meet my debt obligations? b. Am I saving as much as I think I am? c. Do I have adequate liquidity to meet emergencies? d. all of the above e. only a and b above

answer

question

Leroy went shopping today and used his Visa card to buy a new sweater. He wrote a personal check to pay for a new video game. He bought some snack food using cash. Which of these purchases are difficult to track and monitor on his budget? a. The video games because he did not add a budget category for electronics b. the snacks because cash transactions don't leave a paper trail. c. The sweater because it costs more than what he budgeted for clothing this month. d. all of the above

answer

question

Which of the following will be the best type of record keeping system to use in maintaining financial records? a. Any record system out there will do b. the CPA's system c. the one you will actually use d. manual method with pencil and notebook

answer

question

You have learned that a budget a. is a plan for controlling cash inflows and cash outflows b. is a process of setting spending goals for the upcoming year or month c. can be pretty simple or pretty sophisticated d. includes both actual and estimated expenses e. all of the above are true about budgets

answer

question

Which of the following financial documents would you use to create a financial plan? a. income statement b. budget c. cash budget d. balance sheet e. all of the above

answer

question

Suppose that you have been operating a marketing business out of your home. It has recently expanded beyond belief. Since you have neglected your personal finances for some time, what would you do as a first step? a. Rent a separate office for your business activities. b. separate your personal finances from the business finances c. include your personal finances with the business finances to save time d. Purchase a software program to handle both your business and personal finance at the same time

answer

question

A plan for controlling and forecasting your cash inflows and outflows is called a(n) a. balance statement b. statement of changes in financial position c. cash budget d. income statement e. none of the above

answer

question

Which of the following is a relevant question to ask a financial planner? a. Will you provide us with a written estimate of your services and their costs? b. Would you show us a similar financial plan you have done for someone else? c. Would you provide us with references? d.What are your credentials and professional designations? e. All of the above

answer

question

By allowing the interest tat you earn on an investment to stay in the investment and to earn interest you have already earned is called what? a. the power of simple interest b.the power of present value c. the power of compound interest d. the power of future value e. the power of time

answer

question

A one-time investment of $200 at a 10% Annual Rate of Return yields $242 in two years. The $242 is known as the a. present value b. compound value c. principal plus value d. annuity value e. future value

answer

question

John Madrid put 1,000 into a mutual fund yielding an 18% Annual Rate of Return. Using the Rule of 72 calculate approximately how long it will take to double in value. a. three years, four months b. three years, seven months c. four years d. four years, four months e. five years

answer

question

Which financial planning concepts should be helpful to a couple planning for how much money to start saving for their retirement? a. future value b. reinvesting c. present value d. compound interest e. all of the above

answer

question

Your money will grow or compound _____ as the number of compounding periods per year becomes___. a. slower;larger b. faster;smaller c. faster;larger d. slower;compounded e. none of the above are correct

answer

question

Is it possible to create a retirement estate of $585,000 instead of $310,000 without requiring much more to be invested every month? a. probably not with inflation working against you b. absolutely not c. depends upon the interest rte or return you earn on the investment as well as the number of years until retirement. d. there is not enough information available to answer this question

answer

question

The discount rate is the interest rate used to bring ____ back to ___. a. current dollars; present dollars b. current interest rate; present present interest rate c. future dollars; present dollars d. future interest rate; present interest rate

answer

question

A series of equal dollar payments at the end of each period for "x" number of time periods is a. an annuity b. a complex annuity c. an annuity due d. a deferred annuity e. an equal installment annuity

answer

question

A compound annuity uses the principles of a. reinvesting and present value b. compound interest and future value c. compound interest and present value d. amortization and reinvesting e. reinvesting and compound interest

answer

question

When a loan is paid off in equal installments, this is called a(n)____ loan. a. discounted b. amortized c. reverse annuity d. balloon e. none of the above

answer

question

Shawna is a single person with no dependents. She normally receives over $1800 every year for an income tax refund. She is having difficulty paying her monthly bills every month. What tax advice would you give her? a. she should pay her estimated taxes every quarter b. she needs to file as head of household c. she should increase her exemptions on her W-4 form at work d. she needs to find some more tax deductions

answer

question

The movement into a higher tax bracket as a result of inflation increasing wages is called ___. a. bracket migration b. bracket climbing c. bracket creep d. bracket shifting e. none of the above

answer

question

If you are an unmarried tax payer, with at least one child or dependent living with you, your filing status should be a. single b. surviving spouse c. head of household d. married filing separately e. none of the above

answer

question

Assets you own, including such items as stocks, bonds, or real estate, are commonly termed___. a. capital assets b.current assets c. monetary assets d. intangible assets e. none of the above

answer

question

Income on which the payment of taxes is postponed until some further date is called ___. a. tax-postponed b. tax-delayed c. tax-tardy d. tax-deferred e. none of the above

answer

question

Deduction calculated using the federal tax form "Schedule A" which are totaled and then subtracted from the taxable income are called ___. a. personal exemptions b. standard deductions c. personal expenditures d. itemized deductions e. none of the above

answer

question

An IRS-allowed reduction in your income for yourself, your spouse, and any dependents that s subtracted before you compute your taxes is called a (n) ___. a. Personal and dependency exemptions b. itemized exemptions c. dependency deduction d. personal deductions e. none of the above

answer

question

A tax system in which tax rates increase as income increases is called a(n)____ system. a. prorated tax b. regressive tax c. universal tax d. progressive tax e. none of the above

answer

question

Three years ago you purchased a share of CompUTech stock for $4, which you could sell today at the current market price of $150. What would be your capital gain on the sale, ignoring commissions? a. $154 b. $4 c. $146 d.$150 e. Cannot determine from the information provided.

answer

question

Which of the following is not an income tax filing status? a. married filing jointly and surviving spouses b. head of household c. married filing separately d. single e. all of the above are income tax filing statuses

answer

question

The amount of income taxes that you actually pay in based upon your a. taxable income b. adjusted gross income c. taxable income minus exemptions and deductions d. gross income

answer

question

FICA deductions from your paycheck are for which mandatory federal insurance programs? a. unemployment benefits b. Social security c.Medicare d. Medicaid e. both B and C

answer

question

Who must file a federal income tax return? a. individuals whose income meets federal guidelines b. all American citizens c. everyone with an earned income during the year d. only those who have to file a state income tax return e. all heads of household

answer

question

The deadline to file your income tax return is ___ although an automatic extension may be filed. a. March 15 b. April 30 c. April 15 d. March 30

answer

question

If you are unable to file your tax returns by the deadline you may file form 4868, Application for Automatic Extension of Time, and receive an extension of up to four months a. Automatically b. If you meet the IRS requirement c. Upon approval d. None of the above

answer

question

Which indicates the correct order for completing your tax returns? a. determine gross income, subtract adjustments, subtract deductions, claim exemptions, calculate total tax b. subtract deductions, calculate total tax, claim exemptions, determine gross income, subtract adjustments c. claim exemptions, calculate total tax, subtract deductions, subtract adjustments, determine gross income d. none of the above

answer

question

For the Taylors, in chapter 4, they are allowed to take a tax credit of $1,000 per dependent child off of their__ a. Adjustments retained b. exemptions counted c.total tax owed d. net income

answer

question

Which of the following is a source of tax-free income? a. child support payments b. earnings on your IRA c. federal income tax refunds d. welfare benefits e. all of the above

answer

question

Gross income is another name for____ income. a. net b. total c. value added d. expected

answer

question

Which of the following is a reason for the IRS to audit your tax return? a. you earn a lot of money b. you were randomly selected as a matter of routine audits c. there is something suspicious on your return d. you were audited in the past e. and or all of the above

answer

STUDY

Finance Personal Finance

Dave Ramsey: Unit 2 Chapter 5 – Flashcards 60 terms

Lesly Nixon

60 terms

Preview

Dave Ramsey: Unit 2 Chapter 5 – Flashcards

question

What % of college students have never discussed college funding with their parents?

answer

35%

question

What % of college-bound students have not projected the total amount of money they'll need to graduate college?

answer

80%

question

A form that is completed annually by current and prospective college students to determine their eligibility for financial aid

answer

Free Application for Federal Student Aid (FAFSA)

question

A form of federal or state financial aid that does not need to be repaid; usually given to students who demonstrate financial aid

answer

grant

question

A form of financial aid that does not need to be repaid; usually awarded on the basis of academic, athletic or other achievements

answer

Scholarship

question

A program that allows students to work part time while continuing their studies

answer

Work Study

question

What can you do now to make sure you are able to find all the career and education opportunities that exist?

answer

plan ahead

question

The best investment you will ever make is to?

answer

yourself

question

Leaders are?

answer

Readers

question

Reality TV and video games are

answer

"distractions"

question

How many nonfiction books does the average millionaire read a month?

answer

one

question

Your net worth as an adult will be the average of what?

answer

the 5 people you hang out with the most

question

The people you put in your life influence your career, your decisions, and how you?

answer

spend your money

question

In order to insure success, you should have some ___________ who have already had success

answer

mentors

question

Is student loan debt normal or "good debt?"

answer

no, no

question

your financial aid award package will include a list of different types of award like?

answer

scholarships and grants

question

Is a student loan an award?

answer

no, it'll take years to pay back

question

Owing anything to anyone for any reason is

answer

debt

question

Is there such a thing as good debt?

answer

question

What is the total estimated student load debt in our country?

answer

one trillion dollars

question

Millions of people can not afford to make what payment every month?

answer

student loan

question

What percent of college students graduate with debt?

answer

almost 70%

question

Of the total outstanding student loan debt, approximately what amount is past due?

answer

$85 billion

question

What percent of student loan borrowers paid on time without postponing the payments?

answer

onle 37 percent; meaning 63% of borrowers had a hard time paying it back

question

What % of student loan borrowers wind up dropping out of school?

answer

30%

question

What does it mean to cash flow your college education?

answer

To "cash flow" means to pay with cash as you go, instead of credit or debt

question

You need a plan. Who are two people you can get help from?

answer

parents and school counselor

question

What is one thing you can do right now to help you get free money in the form of scholarships?

answer

get good grades

question

What are two things that will set you apart from the crowd?

answer

scoring well on the ACT or SAT and good grades

question

When you are estimating the cost of college it is best to narrow your choices down to how many schools?

answer

six or less

question

What are three things you should consider when picking a school?

answer

the school's degree program; living expenses, and tuition

question

When looking at schools, does more expensive mean better quality?

answer

question

I great money saver during your first two years of college is to attend?

answer

communitee college - don't be sold on prestige

question

The first step to receiving any kind of financial aid is to fill out your

answer

FAFSA form - Free application for federal student aid

question

How often must the FAFSA Form be filled out?

answer

each year you attend college

question

The sooner you turn you FAFSA in the better because some federal funding is given on a first come first serve basis. Turn it in by?

answer

January or February

question

You'll need your parent's tax info to complete the FAFSA. It will be processed faster if you

answer

turn it in online

question

These are golden - free money?

answer

grants

question

besides the grants, another form of free money is

answer

scholarships

question

Should you pay or give out your social security number when applying for grants or scholarships?

answer

no, absolutely not

question

The average cost of tuition and fees for 2012-2013 school years was?

answer

$29,056 at private university; $8,655 for in-state residents at public university and $21,706 for out of state residents

question

Name several scholarships that are available:

answer

academic, athletic, clubs, rotary club, boys and girls club, local businesses, private donors, hobbies, talents

question

An undergraduate academic degree awarded by colleges upon completion of a course of study lasting two years

answer

Associates Degree

question

A developmental partnership through which one person shares knowledge, skills and perspective to foster the personal and professional growth of someone else

answer

Mentorship

question

A money myth that portrays student loans as the only financial option when it comes to funding one's college education

answer

"Good Debt"

question

A type of higher learning school that focuses on job skill training for specific career fields rather than academics in liberal arts.

answer

trade school

question

Our culture thinks student loan debt is normal and that it's an acceptable way to pay for college?

answer

true

question

A four-year degree is necessary regradless of what career you're pursuing?

answer

false

question

the total estimated student loan debt outstanding in the U.S. is

answer

$1 trillion

question

What are three reasons why you should avoid student loans?

answer

debt; don't earn any money; bankrupt

question

According to research, students who do this have the highest grade point averages of any type of student in college because they often develop good time management skills

answer

students who work up to 20 hours

question

Research also shows that working more than 20 hours may

answer

negatively affect grades

question

These jobs may pay you directly or pay toward your tuition bill?

answer

on campus jobs

question

The first step in building your foundation is to eastablish

answer

your emergency fund before graduation

question

Name four ways you can invest in yourself?

answer

find a mentor, read books, surround yourself with people who have similiar goals and ambitions

question

Name three good options to help pay for your education?

answer

plan ahead; get a part-time job; fill out the FAFSA

question

This is a good way to manage your money and live on less than you make?

answer

having a zero-based budget

question

In order to live on less than you make you have to plan these three things ahead of time?

answer

spend; save; give

question

You have two goals according to Ramsey. They are

answer

stay in school and stay out of debt

question

College is not for everyone. Some other options include

answer

Trade school; certifications; self-education; on-the-job-training; starting a business and the military

STUDY

Accounting Assets And Liabilities Business Finance

College Accounting 21e Ch2 – Flashcards 26 terms

William Jordan

26 terms

Preview

College Accounting 21e Ch2 – Flashcards

question

The Accounting elements

answer

Assets, Liabilities and Owners Equitty

question

Assets

answer

An accounting element, Items that are owned by a business and will provide future benefits.

question

Examples of assets

answer

cash, merchandise, furniture, fixtures, machinery, buildings and land

question

Accounts Receivable

answer

the amount of money owed to the business by its customers as a result of a sale.

question

Liabilities

answer

an Accounting element, something owed to another business entity

question

Accounts Payable

answer

A liability that represents, an unwritten promise to pay a supplier for assets purchased or services received.

question

Notes Payable

answer

a liability that is a formal written promise to pay suppliers or lenders specified sums of money at definite future times.

question

Owners equity

answer

An accounting element. The amount by which the business assets exceed the business liabilities.

question

Net worth

answer

Another term for Owners Equity

question

Capital

answer

Another term for Owners Equity

question

Accounting equation

answer

Assets = Liabilities + Equity

question

Business Transaction

answer

An economic event that has direct impact on the business.

question

Account

answer

a separate record used to summarize changes in each asset, liability and owners equity

question

Account titles

answer

provide a description of the particular type of asset, liability or owners equity.

question

Revenues

answer

The amount a business charges customers for a product sold or services performed.

question

Expense

answer

represents a decrease in assets (or increase in liability) as a result of a companies effort to produce revenues.

question

Two main purposes of recognizing an expense

answer

to keep tract of the amount and type of expenses incurred and to show the reduction in owners equity.

question

Withdrawls

answer

reduces owner equity as a result of the owner taking cash or other assets out of the business.

question

Three financial statements prepared by a business entity

answer

Income statement, Statement of owners equity and a balance sheet.

question

Income Statement

answer

reports the profitability of business operations for a specific period of time.

question

Statement of owners equity

answer

Reports beginning capital plus net income less withdrawals to compute ending capital.

question

Balance Sheet

answer

Reports a firms assets, liabilities and owners equity on a specific date.

question

Three basic phases of accounting process

answer

Input, Processing and Output.

question

Input

answer

step one in accounting process, Business transactions provide the necessary input.

question

Prosessing

answer

step two in the accounting process. Recognize the effect of these transactions on the assets, liabilities, owners equity, revenues and expenses of a business.

question

Output

answer

phase three in the basic accounting process.

STUDY

Accounting Accounting 1 Business Finance

College Accounting 21e Chapter 1 – Flashcards 23 terms

Jonathan Walsh

23 terms

Preview

College Accounting 21e Chapter 1 – Flashcards

question

Accounting

answer

A system of gathering financial information about a business, and reporting this information to users refers to:

question

FASB

answer

The private standard-setting body that establishes GAAP is the:

question

The 'recording' step of the accounting process.

answer

Entering financial information about business events into the accounting system refers to:

question

Generally Accepted Accounting Principles

answer

GAAP stands for:

question

A manufacturing business

answer

Making a product for resale is a characteristic of:

question

C. management advisory services include the application of standard review and testing procedures to be certain that proper accounting policies and practices have been followed.

answer

All of the following are true except: a. the purpose of the audit is to provide an independent opinion that the financial information about a business is fairly presented in a manner consistent with GAAP. b. forensic accounting includes fraud detection and prevention. c. management advisory services include the application of standard review and testing procedures to be certain that proper accounting policies and practices have been followed. d. public accountants advise businesses on a variety of managerial issues.

question

Business managers

answer

Detailed measures of business performance is the main concern of:

question

Balancing ledgers and preparing reports

answer

A bookkeeper's responsibilities include:

question

The purpose of Accounting

answer

Providing financial information about the current operations and financial condition of a business to individuals, agencies and organizations is:

question

Service business.

answer

A law firm would be an example of a:

question

One owner

answer

A proprietorship is owned by:

question

c. Shareholders may have little influence on business decisions made by a corporation.

answer

Which of the following is/are true? a. "Shareholders may have little influence on business decisions made by a corporation" and "Shareholders assume all risks for a corporation". b. Shareholders assume all risks for a corporation. c. Shareholders may have little influence on business decisions made by a corporation. d. A disadvantage of partnerships is that owners share risks and decision making.

question

c. a pharmacy.

answer

ll of the following are examples of a service business, except: a. a computer consultant. b. a real estate management company. c. a pharmacy. d. a physician's office.

question

"perform tasks like recording, sorting, and filing accounting information" and "specialize in cash, payroll, and purchases among other accounting areas".

answer

Accounting clerks:

question

b. All of these choices are correct.

answer

The controller of a firm: a. is the principal accounting officer of the company. b. All of these choices are correct. c. oversees the entire accounting process. d. prepares financial reports and presents recommendations to upper management.

question

a. after researching an issue.

answer

A discussion memorandum is issued by FASB a. after researching an issue. b. after receiving feedback on an issue. c. after an issue has been placed on Fabe's agenda. d. after hearings are held on an issue.

question

b. having little influence on business decisions.

answer

Being a corporate stockholder means: a. sharing management functions with the rest of the stockholders. b. having little influence on business decisions. c. assuming all risks of the business. d. personal assets can be taken to pay creditors.

question

b. makes a product to sell.

answer

A manufacturing business: a. can be a grocery store. b. makes a product to sell. c. provides a service to other businesses. d. buys a product and resells it for profit.

question

b. reporting to FASB the results of business operations.

answer

All of the following are steps in the accounting process except: a. summarizing information from similar business events. b. reporting to FASB the results of business operations. c. analyzing business events and their effect on the business. d. recording financial information in the accounting system.

question

d. the accounting concepts and techniques would be the same as if they had been performed by computers.

answer

The recording, classifying, summarizing, and reporting steps of the accounting process can be performed either by computers or manually. If done manually, a. a management consultant should be hired. b. None of these choices are correct. c. the accounting concepts and techniques would be significantly different. d. the accounting concepts and techniques would be the same as if they had been performed by computers.

question

d. the company's profitability and current financial condition.

answer

Business owners are most interested in a. how much income tax the IRS will assess. b. accounting process. c. hiring the best managers. d. the company's profitability and current financial condition.

question

a. Detailed measures of business performance.

answer

Managers are most interested in a. Detailed measures of business performance. b. Securing credit lines from creditors. c. Owning a business. d. Generally accepted accounting principles.

question

b. partners share risks and decision making.

answer

n advantage of a partnership is that: a. partners do not share risks and decision making. b. partners share risks and decision making. c. partners are not personally liable for the debts of the partnership. d. the partners may disagree about the best way to run the business.

STUDY

Accounting Accounting 1 Cash Payments Journal Finance Intermediate Accounting 1

Accounting Chapter 9 Study Guide – Flashcards 34 terms

Patrick Marsh

34 terms

Preview

Accounting Chapter 9 Study Guide – Flashcards

question

True or False: Unlike a proprietorship, a corporation exists independent of its owners

answer

True

question

True or False: A corporation can incur liabilities but cannot own property

answer

False

question

True or False: As in proprietorship, information in a corporation's accounting system is kept separate from the personal records of the owners, and this account concept application is called a Business Entity

answer

True

question

True or False: The selling price of merchandise must be greater than the cost of merchandise for a business to make a profit

answer

True

question

True or False: The cost account Purchases is used only to record the value of merchandise purchased

answer

True

question

True or False: When purchases are recorded at their cost, including any related shipping costs and taxes, the Historical Cost accounting concept is being applied

answer

True

question

True or False: Recording entries in a journal with special amount columns saves time

answer

True

question

True or False: All purchase transactions, including purchases made on account and purchases made for cash, are recorded in the purchases journal

answer

False

question

True or False: The course document for recording a purchase on account transaction is a memorandum describing the merchandise purchased

answer

False

question

True or False: By listing the quantity, the description, the price of each item, and the total amount purchased, the Objective Evidence concept is applied

answer

True

question

True or False: A purchase invoice usually lists only the total cost of the merchandise

answer

False

question

True or False: A purchase on account transaction increases the amount owed to a vendor

answer

True

question

True or False: A cash payment journal includes a special amount account for the cash account and the accounts payable account

answer

True

question

True or False: The source document for the most cash payments is the check issued

answer

True

question

True or False: When supplies are purchased for use in the business, the amount is recorded purchases account

answer

False

question

True or False: A special journal entry is made to show the amount of a trade discount

answer

False

question

True or False: A term of sale 2/15, n/30 mean that 2% of the invoice amount may be deducted if paid within 15 days of the invoice date or the total invoice amount must be paid within 30 days

answer

True

question

True or False: Purchase discounts are recorded in the general journal

answer

False

question

True or False: the contra account Purchases Discount has a normal credit balance

answer

True

question

True or False: The custodian prepares a petty cash report when the petty cash fund is to be replenished

answer

True

question

True or False: The petty cash account cash Short and Over is a permanent account

answer

False

question

True or False: A journal is proved and ruled only at the end of a fiscal period

answer

False

question

True or False: To begin a new journal page, the totals from the previous journal page are carried forward to the next journal page

answer

True

question

True or False: Buying supplies on account is recorded in the general journal

answer

True

question

True or False: When store supplies are purchased on account, the Store Supplies account balance increases and the Accounts Payable account balance increases

answer

True

question

True or False: The source document for purchases return is a check

answer

False

question

True or False: The normal account balance of Purchases Returns and Allowances is a credit

answer

True

question

True or False: The purchases account is increased by a credit and decreased by a debit

answer

False

question

True or False: When several journals are used, an abbreviation is used in the Post. Ref. column of a ledger o show the journal from which the posting is made

answer

True

question

True or False: Trade discounts normally are recorded in the purchases discount account

answer

False

question

True or False: Purchases Discount is increased by a credit entity

answer

True

question

True or False: If the actual petty cash on hand is $53.00 but the records show that $55.00 should be on hand, the petty cash fund is said to be over

answer

False

question

True or False: Purchases Returns and Allowances is a contra account to Cost of Merchandise

answer

False

question

True or False: The terms of sale 1/10, n/30 mean that the customer may deduct 1% of the invoice amount if payment is made within 30 days of the invoice date

answer

False

STUDY

Accounting Finance

Accounting Chapter 8 Study Guide and Vocab – Flashcards 20 terms

Noah Thomson

20 terms

Preview

Accounting Chapter 8 Study Guide and Vocab – Flashcards

question

Permanent Accounts (Real)

answer

Used to accumulate information from one fiscal period to the next. (p.214)

question

Temporary Accounts (Nominal)

answer

Used to accumulate information until it is transferred to the owner's capital account. (p.214)

question

Closing Entries

answer

Journal procedures used to prepare temporary accounts for a new fiscal period. (p.214)

question

Post-Closing Trial Balance `

answer

Prepared after the closing entries are posted. (Balance) (p.227)

question

Accounting Cycle

answer

The series of accounting activities included in recording financial information for a fiscal period. (p.228)

question

The Closing Entry for Sales

answer

Debit: Sales Credit Income Summary (p.217)

question

The Closing Entry for All Expense Accounts

answer

Debit: Income Summary Credit: All Expense Accounts (p.219)

question

The Closing Entry for Income Summary with a Net Income

answer

Debit: Income Summary with Net Income Amount Credit: Capital Account (p.220)

question

The Closing Entry for Income Summary with a Net Loss

answer

Debit: Loss to Capital Account Credit: Income Summary (p.220)

question

The Closing Entry for Owner's Drawing Account

answer

Debit: Capital Credit: Drawing (p.221)

question

The accounting concept that applies when a worksheet is prepared at the end of each fiscal cycle to summarize the general ledger information needed to prepare financial information.

answer

Accounting Period Cycle (p.214)

question

The ending account balances of permanent accounts for one fiscal period are...

answer

...the beginning account balances for the next fiscal period. (p.214)

question

Example of a Temporary Account

answer

Rent Expense and other expense accounts (p.214)

question

Which accounting concept applies when expenses are reported in the same fiscal period that they were used to produce revenue?

answer

Matching Expenses with Revenue (p.216)

question

When Revenue is greater than total expenses, resulting in a net income, the Income Summary account has a ________.

answer

Credit Balance (p.216)

question

Information needed for recording the closing entries is obtained from the ____.

answer

Work Sheet's Income Statement and Balance Sheet Columns (p.216)

question

Income Summary is a ____.

answer

Temporary Account (p.216)

question

After the closing entries are posted, the Sales account balance should be _______.

answer

Zero (p.218)

question

After the closing entries are posted, the owner's capital account balances should be the same as shown ________.

answer

In the work sheet's Balance Sheet Debit Column. (p.221)

question

The accounts listed on a post-closing trial balance are _____.

answer

This that appear in the work sheet's Trial Balance columns. (p.227)

STUDY

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