question

Which group should make use of accounting information when determining whether to open an additional store location?

answer

Owners and Managers

question

What is one reason for honest and ethical accounting practices?

answer

To ensure clarity of accounting data for all interested parties.

question

Which group is an organization focused on developing GAAP within the United States?

answer

FASB- Financial Accounting Standards Board

question

Which financial statement shows the results of operations for a given period?

answer

Income Statement shows given period Balance Sheet shows given point

question

From the adjusted trial balance, which account is entered in the balance sheet columns?

answer

Owners Capital

question

What information does an accountant enter into the general ledger?

answer

Credit amount

question

A corporation paid $5,000 for the current month's payroll. Which entry is needed?

answer

Debit Wages Expense $5,000 Credit Cash $5,000

question

The accounting supervisor is reviewing a junior accountant's journal entries prior to posting to the general ledger. Which journal entry would cause the trial balance to be imbalanced?

answer

$600 insurance bill received and paid in the same month. $600 debit to insurance expense and $60 credit to cash.

question

A corporation did not yet receive the September electric bill, so it decided to accrue an estimate of $1,000. What is the appropriate journal entry?

answer

Credit to Utilities Payable

question

Which account is used to close revenue and expense accounts?

answer

Income Summary

question

On November 30, 2014, Company A paid $6,000 rent for December and January. What would be the correct adjusting entry at the end of December to show the expiration of one month's rent?

answer

Debit Rent Expense $3,000 Credit to Prepaid Rent $3,000

question

A company recently purchased a truck for $11,000 with a $1,000 salvage value. What is the proper adjusting entry to recognize $2,000 worth of depreciation on the truck for this year?

answer

Debit Depreciation Expense for $2,000 Credit Accumulated Depreciation for $2,000

question

A company paid $1,800 for supplies during the accounting period. At the end of the accounting period, the company had $500 of supplies on hand. What adjustment should be entered on the worksheet?

answer

Debit Supplies Expense $1,300 Credit Supplies $1,300

question

Which list includes assets held by a local small business?

answer

Office equipment, company vehicles, and cash

question

Which account is on the income statement?

answer

Sales revenue

question

The balance sheet is a reflection of which fundamental accounting equation?

answer

Assets= liabilities + owners equity

question

What information is contained in the balance sheet and the income statement?

answer

The balance sheet contains assets, liabilities, and owner's equity and the income statement contains revenues, expenses, and net profit/ loss.

question

Which financial statement shows all the expenses of doing business over a specific period of time?

answer

Income Statement

question

Examination of Company A's finances show assets of $50,000 and owner's equity of $45,000. What are liabilities for Company A?

answer

$5,000

question

Examination of Company A's finances show liabilities of $50,000 and owner's equity of $45,000. What are the assets for Company A?

answer

Assets=Liability+Owner's Equity $95,000

question

What would a bookkeeper debit to record the purchase of machinery with a long-term loan?

answer

Debit Machinery Credit Accounts Payable

question

What are the key components of every double-entry bookkeeping record?

answer

At least one debit entry and at least one credit entry.

question

What is the next step if the trial balance debit and credit columns are not equal?

answer

Analyze the trial balance and financial records to find the error.

question

A company has just purchased a new computer system for $100,000 in cash. How should this transaction be recorded?

answer

Debit Equipment $100,000 Credit Cash $100,000

question

A company writes a check to purchase printer cartridges. Which account would be debited in the journal entry to record this purchase?

answer

Debit Office Supplies Credit Cash

question

Which two accounts will have adjusting journal entries to record the interest that has been incurred but not paid on a note payable?

answer

Interest Expense Interest Payable

question

Which adjusting entry is required to reflect a change in the supplies account balance?

answer

A debit to supplies expense and a credit to supplies.

question

According to GAAP, when is the earliest instance that revenue should be recorded?

answer

When the good or service has been provided

question

Which statement is true about the accrual basis accounting?

answer

Revenue is recognized when earned, and expenses are recognized when incurred.

question

Using the cash basis method of accounting, which of the following journal entries would be correct when the company is paying for supplies?

answer

Debit Supplies Expense Credit Cash

question

A company has a lease which requires that it pays its annual office space rent in advance on December 31 of each year. On a quarterly basis this expense totals $10,000. To account for this transaction how should the rent expense be recorded on the firm's books on January 1?

answer

It should be recorded as a decrease of $10,000 in the asset accounts under prepaid rent.

question

Smith's Consulting Services issued a check for $10,000 on December 1 to prepay the rent for the months of Dec and Jan. What Journal entry should they make?

answer

Debit Prepaid rent for $10,000 Credit Cash for $10,000

question

After analyzing source documents to determine their effects on the basic accounting equation, which step should an accountant perform next?

answer

Journalize the transactions

question

During which accounting cycle step do managers compare revenues, expenses, and profit from one accounting period to another?

answer

Interpret the financial information ??

question

The worksheet pulls together certain information. What is this information needed for?

answer

Enter correcting entries Prepare the income statement ??

question

What information does an income summary account provide?

answer

A summary of revenue and expenses from the point of view of the owner

question

Cash: 100,000 Accts Rec: 20,000 Accts Pay: 50,000 Accum. Depreciation: 20,000 Prepaid Rent: 10,000 Equp: 40,000 Firm Capital: 100,000

answer

Cash, Acct Rec, Prepaid Rent, Equip=170,000 Acct Pay, Accum Dep, Firm Capital=170,000

question

Cash: 100,000 Accts Rec: 20,000 Accts Pay: 40,000 Accum Dep: 20,000 Prepaid Rent: 10,000 Equip: 40,000 Firm Capital: ???

answer

Cash, Accts Rec, Prepaid Rent, Equip=170,000 Accts Pay and Accum Dep=60,000 170,000-60,000=110,000 Firm Capital=110,000

question

Cash: 10,500 Accts Rec: 35,000 Allowance for Double Accts: 2,000 Inventory: 12,500 Property, Plant, and Equip: 41,000 Taxes Payable: 15,000 Accts Pay: 8,000 Salaries Payable: 7,000

answer

Assets: Cash, Accts Rec, Allowance, Inventory, PPE=97,000 Liabilities: Taxes Pay, Salaries Pay, Accts Pay=30,000 **Contra Accts are subtracted

question

Using numbers above, what will the owner's equity be?

answer

$67,000

question

An accountant is preparing financial statements for a firm and realizes that adjustments need to be made to the financial statements based on equipment depreciation for the quarter. How will the financial statements be affected by this type of adjustment?

answer

Depreciation expense is increased on the income statement and accumulated depreciation is increased on the balance sheet

question

An accountant is preparing financial statements for a firm and realizes that adjustments need to be made to the financial statements based on supplies used for the quarter. How will the financial statements be affected by this type of adjustment?

answer

Supplies expense is increased on the income statement and supplies is decreased on the balance sheet

question

An accountant is preparing financial statements for a firm and realizes that adjustments need to be made to the financial statements based on increased allowances for questionable accounts receivable. How will this affect the firm's bottom line for the period?

answer

The increased allowances for bad debt will lower the firm's net income for the period. ??

question

Which statement reflects effective internal controls?

answer

Each check should be matched to an approved invoice or payment authorization. ??

question

Which situation is an improper use of petty cash?

answer

$450 airline ticket for next month's travel to a conference.

question

What is an appropriate control over cash receipts?

answer

Bonding Employees

question

While completing the bank reconciliation, two items need attention. A check that was written to pay for electricity in the amount of $180 was mistakenly recorded in the cash disbursements journal for $108. Utilities expense matched cash disbursement. Interest was earned on the account in the amount of $15.

answer

Increase in utilities expense: $72 Increase in interest income: $15 Decrease in cash: $72

question

While completing a bank reconciliation, an accountant determines that there are $3,500 of outstanding checks and $6,000 of deposits in transit. If the unadjusted bank balance is $20,000, what is the adjust bank balance?

answer

$17,500

question

Which concept dictates that a company must make adjustments to accounts receivable because each period there is a risk that not all customers will pay their account in full?

answer

Allowance method

question

Which method is used when calculating uncollectible accounts expense using the income statement approach?

answer

Percentage of net credit sales is the income statement approach. Percentage of receivables is the balance sheet approach.

question

What is the required adjustments to reflect allowance for doubtful accounts?

answer

Debit Uncollectible Accounts Expense, Credit Allowance for Doubtful Accounts

question

A company allows established the company posted Sales of $245,000 including $125,000 on credit. What adjusting entry should be made at year end to record the estimated expense from uncollectible accounts using the percent of net credit sales method?

answer

Debit $6,250 Uncollectible Accounts Expense, credit $6,250 to Allowance for Doubtful Accounts

question

A firm sells a truck to a customer for $35,000 and the customer is required to pay for the vehicle within 90 days. How is this purchase entered on the accounts receivable ledger?

answer

$35,000 Debit

question

A firm accepts returns of $2,000 worth of merchandise from a customer. How should the return be entered on the firm's accounts receivable ledger?

answer

$2,000 Credit

question

A store sells a large number of goods to a customer using credit cards. Which journal should the store use to minimize the recording of these purchases?

answer

Sales journal- Credit card companies **For companies who do a large number of credit card sales, if not they would use accounts receivable and sales accounts that already exist.

question

A customer returns damaged merchandise to the seller. The selling price was $150, cost of goods sold was $100, and the sales tax charged was $18. In the seller's general journal, what is the amount debited to Sales Returns and Allowances?

answer

$100

question

For a purchase return, which statement is true regarding the Purchase Account?

answer

The Purchase Account would be directly credited to provide accurate purchase numbers

question

A firm receives an allowance of $300 for damaged merchandise received from a vendor. The firm is not required to return the damaged goods. How should the firm enter this into their general journal?

answer

Debit accounts payable $300 Credit purchase returns and allowances $300

question

In the accounts payable ledger, a supplier's account has a beginning balance of $2,400. A transaction of $800 is posted from the purchases journal. What is the balance of the supplier's account?

answer

$3,200 Credit

question

When a company purchases inventory on account, what should the journal entry include?

answer

An increase in liabilities

question

Which three pieces of information are employers required to collect and maintain as part of employee payroll records?

answer

Proof of US Employment Eligibility Cumulative Wages Paid During the Year Amount of Income Tax Withheld from the Employee's Pay in a Given Year

question

A person owns a small business and has one employee. The employee is full-time, working 40 hours per week at an hourly rate of $12. Assume a 20% federal income tax rate, 6.2% FICA rate and 1.45% Medicare tax rate. What are the wages payable for one week for the full-time employee?

answer

Wages: $480 Federal: $96 FICA: $29.76 Medicare: $6.96 Total: $347.28

question

A company employs 10 individuals. The employees are all paid piece rate $0.10 per label completed. The employees completed 4,000 pieces each this week. Assume a 15% federal income tax rate, 6.2% FICA rate, and 1.45% Medicare tax rate. What are the wages payable for this week for each employee?

answer

Wages: $400 Federal: $60 FICA: $24.80 Medicare: $5.80 Total: $309.40

question

A company has two salaried employees that are paid weekly. Employee 1: $400 per week Employee 2: $425 per week Based on their W-4 forms, the following Federal Income taxes should be withheld for each employee. Employee 1: $13 Employee 2: $32 The only withholdings that are required for the employees are Federal Income Tax, FICA, and Medicare. Calculate the payroll for the week and assume that the employees will be paid immediately. Indicate which amounts go with each journal entry description.

answer

Decrease in Assets: Increase in expense: Increase in Liabilities:

question

A company has a gross pay for January of $10,000.

answer

FICA: $620 Medicare: $145 Federal: $500 SUTA: $270 FUTA: $620 Wages Payable: $8,735

question

To which two government agencies would a large company that is operating at a loss have to make payments?

answer

State Government for State income taxes Federal Government for federal taxes

question

Which fundamental principal requires an accounting information system to work and be consistent with the overall goals of the company?

answer

Compatibility Principal

VYC1 – Flashcards

Unlock all answers in this set

Haven't found what you were looking for?

Search for samples, answers to your questions and flashcards