question

True

answer

Accounting is defined as the process by which financial information about a business is recorded, classified, summarized, interpreted, and communicated to owners, managers, and other interested parties. True False

question

True

answer

The financial statements and the auditor's report must be made available to stockholders of publicly owned corporations. True False

question

True

answer

Most owners and managers rely heavily on the accountant's judgment and knowledge when making financial decisions. True False

question

True

answer

In a sole proprietorship, the owner is responsible for the debts of the business if the firm is unable to pay. True False

question

Tax Planning

answer

Tax accounting involves tax compliance and Tax Evaluation. Tax Planning. Tax Configuration. Tax Obfuscation.

question

The Securities & Exchange Commission

answer

The government agency that has final authority over the financial reporting of publicly owned corporations is: The Securities and Exchange Commission The Federal Trade Commission The Internal Revenue Service The Financial Accounting Standards Board

question

Private Accounting

answer

Managerial accounting is Public Accounting Government Accounting Private Accounting Tax Accounting

question

Identifying

answer

Which of the following is NOT part of the process of accounting for financial information? Recording Identifying Communicating Classifying

question

True

answer

Laws passed by Congress in 1933 and 1934 gave the Securities and Exchange Commission (SEC) final say on matters of financial reporting by publicly owned corporations. True False

question

Managerial Accounting

answer

The area of accounting that involves the preparation of internal reports for a firm's executives and the analysis of the data in these reports to aid in decision making is known as Financial Accounting Managerial Accounting Auditing. Cost Accounting

question

A Business

answer

An example of an economic entity is a town a business a nonprofit hospital a church

question

False, you can only invest in an a public corporation

answer

Anyone can invest in a closely held corporation. True False

question

False, the tax base is determined by the IRS

answer

The SEC uses financial information to determine a company's tax base. True False

question

The Corporation

answer

Owners are not personally responsible for the debts of the business if the form of business organization is the sole proprietorship the partnership the corporation the nonprofit organization

question

False

answer

Public accountants work on the staff of federal, state, or local governmental units. True False

question

Kept totally seperate

answer

The financial affairs of a business and the financial affairs of the owners should be * Combined in the firm's accounting records. * Reported in different parts of the firm's accounting records. * Combined only if the owner wants them to be. * Kept totally separate

question

False, they are developed by GAAP

answer

Currently, generally accepted accounting principles are developed by the American Institute of Certified Public Accountants (AICPA) True False

question

Developing generally accepted accounting principles

answer

The Financial Accounting Standards Board is responsible for * Auditing financial statements. * Developing generally accepted accounting principles. * Establishing accounting systems for businesses. * Making recommendations to the Securities and Exchange Commission.

question

CPA

answer

An independent accountant who provides accounting services to the public for a fee is a: CIA CFE CMA CPA

question

Auditing

answer

The review of financial statements to assess their fairness and adherence to GAAP is Accounting Preparation Compliance Auditing

question

True

answer

The Securities and Exchange Commission (SEC) requires that publicly owned corporations submit financial statements to it each year. True False

question

Suggesting actions to reduce tax liability

answer

Tax planning includes * Preparing tax returns * Auditing tax returns * Correcting tax returns * Suggesting actions to reduce tax liability

question

The types of products and services the business provides

answer

Which of the following is NOT a type of information communicated by the financial statements? * The equity, or value, of the business * The amount spent on costs (expenses) of the business * The types of products and services the business provides * The amount of revenue earned by the business

question

True

answer

The death or withdrawal of one partner ends the partnership. True False

question

LLP

answer

A form of the partnerships business entity is LLP LLC INC DBA

question

True

answer

Accountants provide financial information to various parties so they can make business decisions. True False

question

True

answer

The purpose of accounting is to provide financial information about an economic or social entity. True False

question

False, the can have as many as they declare in the forming of the entity.

answer

A business partnership can have only two partners. True False

question

Auditor Rotation

answer

The Sarbanes-Oxley Act includes rules on: Auditor Retention Auditor Reliability Auditor Rotation Auditor Reporting

question

False

answer

The owners and managers of a business are the only users of the Financial Information. True False

question

True

answer

Public accounting firms provide three major types of services: auditing, tax accounting, and management advisory services. True False

question

False, The records for each entity need to be kept completely separate.

answer

When a business is organized as a sole proprietorship, the owner may combine his/her personal financial information with the business financial information. True False

question

False

answer

An accounting system is designed to accumulate and classify data about a firm's financial affairs and summarize it in the general journal. True False

question

Publicly Owned Coprorations

answer

The corporations whose stock can be bought and sold on stock exchanges and in over-the-counter markets are referred to as * Privately owned corporations * Closely held corporations * Publicly owned corporations * Sole proprietorship

question

How long the business has been in operation

answer

Which of the following is NOT a type of information communicated by the financial statements? * Whether or not the business is profitable * What types of assets business owns * How long the business has been in operation * How much the business owes others

question

Industrial Accounting

answer

Which of the following is NOT an area in which accountants usually practice? * Public Accounting * Industrial Accounting * Governmental Accounting * Managerial (Private) Accounting

question

Sarbanes-Oxley Act

answer

An act passed in response to the wave of corporate accounting scandals is the Saxon-Ordanly Act Sarbanes-Oxley Act Sardonic-Oxone Act Sorbine-Oxide Act

question

The AAA

answer

The group of accounting educators who offer their opinions about proposed FASB statements, after research has been done to determine the possible effects on financial reporting and the economy, is the FCC. the AICPA. the SEC. the AAA.

question

$78,040

answer

"At the end of the first month of operations for SloMo Delivery Service, the business had the following accounts: Accounts Receivable, $1,170; Prepaid Insurance, $470; Equipment, $35,900 and Cash, $40,500. On the same date, SloMo owed the following creditors: Simpson Supply Company, $11,700; Allen Office Equipment, $9,350. The total assets for the SloMo Delivery Service are $78,040 $42,140 $41,670 $76,400"

question

$21,050

answer

At the end of the first month of operations for SloMo Delivery Service, the business had the following accounts: Accounts Receivable, $1,170; Prepaid Insurance, $470; Equipment, $35,900 and Cash, $40,500. On the same date, SloMo owed the following creditors: Simpson Supply Company, $11,700; Allen Office Equipment, $9,350. The total amount of Liabilities is $35,900 $21,050 $9,350 $40,500

question

$78,040

answer

At the end of the first month of operations for SloMo Delivery Service, the business had the following accounts: Accounts Receivable, $1,170; Prepaid Insurance, $470; Equipment, $35,900 and Cash, $40,500. On the same date, SloMo owed the following creditors: Simpson Supply Company, $11,700; Allen Office Equipment, $9,350. The total assets for the SloMo Delivery Service are $76,400 $78,040 $42,140 $41,670

question

$20,000

answer

Total assets of Douglas Fuhr Furniture Co. are $28,000 and the total liabilities are $8,000. What is the amount of the owner's equity? $4,000 $20,000 $28,000 $36,000

question

$85,000 increase

answer

If during the year total assets increase by $71,000 and total liabilities decrease by $14,000, by how much did owner's equity increase/decrease? $85,000 decrease $85,000 increase $57,000 decrease $71,000 increase

question

$20,200

answer

If liabilities are $4,400 and owner's equity is $15,800, assets are $20,200. $11,400. $15,800. $4,400.

question

Net Income $935

answer

During October, a firm had the following transactions involving revenue and expenses. Paid $1,000 for rent Provided services for $2,350 in cash Paid $170 for telephone service Provided services for $1,500 on credit Paid salaries of $1,475 to employees Paid $270 for office cleaning service

question

Merchandising Business

answer

A retailer is involved in a? Merchandising Business Wholesale Distribution Business Manufacturing Business None of the Above

question

A wholesale merchandising business is typically invovled in: Product Distribution Service Produce Manufacturing All of the Above

answer

Product Distribution

question

True

answer

Some business manufacture and distribute products as well as provide services to customers. True False

question

Both a Manufacturing Business & Retail Distribution

answer

A game software development company that sells its products directly to customers through its own advertising and internet website would be considered a: * Manufacturing Business * Wholesale Distribution Business * Retail Distribution Business * Service Business * Both a Manufacturing Business & Wholesale Distribution Business * Both a Manufacturing Business & Retail Distribution * All of the Above * None of the Above

question

All of the Above

answer

Successful businesses typically requre: Capital Effective Management A Product or Service that can be sold to customers at a profit All of the Above

question

False

answer

Non-profit businesses typically do not require capital. True False

question

MAP

answer

Management Advisory Services

question

GAAP

answer

Generally Accepted Accounting Principles

question

CPA

answer

Certified Public Accountant

question

Accounting

answer

The process in which financial information is recorded, classified, summarized, interpreted, and communicated to owners, managers and other interested parties.

question

Accounting System

answer

A process designed to accumulate, classify, and summarize financial data.

question

Auditing

answer

The review of financial statements to assess their fairness and adherence to generally accepted accounting principles.

question

Auditor's Report

answer

An independent accountant's review of a firm's financial statements.

question

Certified Public Accountant (CPA)

answer

An independent accountant who provides accounting services to the public for a fee.

question

Corporation

answer

A publicly or privately owned business entity that is separate from its owners and has a legal right to own property and do business in its own name; stockholders are not responsible for the debts or taxes of the business.

question

Creditor

answer

One to whom money is owed.

question

Discussion Memorandum

answer

An explanation of a topic under consideration by the Financial Accounting Standards Board.

question

Economic Entity

answer

A business or organization whose major purpose is to produce a profit for its owners.

question

Entity

answer

Anything having its own separate identity, such as an individual, a town, a university, or a business.

question

Exposure Draft

answer

Exposure Draft

question

Financial Statements

answer

Periodic reports of a firm's financial position or operating results.

question

Generally Accepted Accounting Principles (GAAP)

answer

Accounting standards developed and applied by professional accountants.

question

Governmental Accounting

answer

Accounting work performed for a federal, state, or local governmental unit.

question

International Accounting

answer

The study of accounting principles used by different countries.

question

Management Advisory Services

answer

Services designed to help clients improve their information systems or their business performance.

question

Managerial Accounting

answer

Accounting work carried on by an accountant employed by a single business in industry.

question

Partnership

answer

A business entity owned by two or more people who are legally responsible for the debts and taxes of the business.

question

Public Accountants

answer

Members of firms that perform accounting services for other companies.

question

Separate Entity Assumption

answer

The concept of keeping a firm's financial records separate from the owner's personal financial records.

question

Social Entity

answer

A nonprofit organization, such as a city, public school, or public hospital.

question

Sole Proprietorship

answer

A business entity owned by one person who is legally responsible for the debts and taxes of the business.

question

Statements of Financial Accounting Standards

answer

Accounting principles established by the Financial Accounting Standards Board.

question

Stock

answer

Certificates that represent ownership of a corporation.

question

Tax Accounting

answer

A service that involves tax compliance and tax planning.

question

Accounts Payable

answer

Accounts a business must pay in the future.

question

Accounts Receiveable

answer

Claims for future collection from customers.

question

P&L

answer

Profit & Loss Statement, also known as an income statement, or statement of income & expense.

question

Assets

answer

Property owned by a business.

question

Balance Sheet

answer

A formal report of a business's financial condition on a certain date; reports the assets, liabilities, and owner's equity of the business.

question

Break Even

answer

A point at which revenue equals expenses.

question

Business Transacation

answer

A financial event that changes the resources of a firm.

question

Capital

answer

Financial investment in a business; equity.

question

Equity

answer

An owner's financial interest in a business.

question

Expense

answer

An outflow of cash, use of other assets, or incurring of a liability.

question

Fair Market Value

answer

The current worth of an asset or the price the asset would bring if sold on the open market.

question

Fundamental Accounting Equation

answer

The relationship between assets and liabilities plus owner's equity.

question

Income Statement

answer

A formal report of business operations covering a specific period of time; also called a profit and loss statement (P&L Statement) or a statement of income & expenses.

question

Liabilities

answer

Debts or obligations of a business.

question

Net Income

answer

The result of an excess of revenue over expenses.

question

Net Loss

answer

The result of an excess of expense over revenue.

question

On Account

answer

An arrangement to allow payment at a later date; also called a charge account or open-account credit.

question

Owner's Equity

answer

The financial interest of the owner of a business; also called proprietorship or net worth.

question

Revenue

answer

An inflow of money or other assets that results from the sales of goods or services or from the use of money or property; also called income.

question

Statement of Owner's Equity

answer

A formal report of changes that occurred in the owner's financial interest during a reporting period.

question

Withdrawls

answer

Funds taken from the business by the owner for personal use.

question

True

answer

Assets always equal debts of the business plus the financial interest of the owner. True or False

question

False 8,000-2,000=6,000

answer

If assets are $8,000 and liabilities are $2,000, owner's equity is $10,000. True or False

question

"False 56,320-29,500=26,820"

answer

A company has assets of $56,320 and liabilities of $29,500. The owner's equity is $85,820. True or False

question

True

answer

A double line drawn under the figures in a money column shows that the computation is complete. True or False

question

Six-month Period Ended November 30, 2010

answer

If the income statement covered a six-month period ending on November 30, 2010, the third line of the income statement heading would read * Month Ended November 30, 2010. * November 30, 2010. * Six-month Period Ended November 30, 2010. * Month of November, 2010.

question

False Business and Personal Expenses must always be kept secret.

answer

A withdrawal of funds by the owner for personal use is considered a business expense. True or False

question

beginning capital + net income - withdrawals + additional investments = ending capital

answer

The Statement of Owner's Equity is calculated as follows: * beginning capital + net income - withdrawals + additional investments = ending capital * beginning capital + net loss + withdrawals + additional investments = ending capital * beginning capital + net loss - withdrawals + additional investments = ending capital * beginning capital + net income + withdrawals + additional investments = ending capital

question

assets and owner's equity increase

answer

assets and owner's equity increase. When the owner invests cash in a business, * assets and revenue increase. * assets increase and owner's equity decreases. * liabilities decrease and owner's equity increases. * assets and owner's equity increase.

question

one asset increases and another asset decreases

answer

When equipment is purchased for cash, * assets decrease and expenses increase. * one asset increases and another asset decreases. * assets and owner's equity increase. * assets increase and liabilities decrease.

question

a statement of revenues less withdrawals and expenses.

answer

An Income Statement is all of the following EXCEPT: * a formal report of business operations. * a profit and loss statement. * a statement of revenues less withdrawals and expenses. * a statement of income and expenses.

question

debt Cash & credit Accounts Payable

answer

A firm paid cash to apply against a debt. To record this transaction, the accountant would * debit Accounts Receivable and credit Cash. * debit Accounts Payable and credit Cash. * debit Cash and credit Accounts Payable. * credit Cash and credit Accounts Payable.

question

2

answer

If the trial balance totals are not equal, the error may have been caused by a transposition if the difference is divisible by 2 7 9 5

question

the revenue account

answer

The account used to record increases in owner's equity from the sale of goods or services is the revenue account. the Cash account. the capital account. the drawing account.

question

Statement of Owner's Equity

answer

Which of the following is NOT one of the formal financial statements that is made available to all users of the financial statements. Trial Balance Income Statement Statement of Owner's Equity Balance Sheet

question

Debit Cash; Credit Accounts Payable

answer

A business pays a creditor on account. The journal entry to record this transaction is: * Debit Accounts Payable; Credit Cash * Debit Accounts Receivable; Credit Accounts Payable * Debit Cash; Credit Accounts Payable * Debit Accounts Receivable; Credit to Cash

question

Expenses and assets

answer

Which of the following types of accounts normally have debit balances? Assets and revenue Assets, liabilities, and owner's equity Expenses and assets Liabilities and owner's equity

question

True

answer

Debit entries increase asset, drawing, expense and liability accounts. True or False

question

True

answer

Another name for temporary accounts is real accounts. True or False

question

True

answer

The modern system of accounting is called the double-entry system because a debit to one account is balanced by a credit to another account. True or False

question

Accounting Cycle

answer

A series of steps performed during each accounting period to classify, record, and summarize data for a business and to produce needed financial information. : Audit Trail = A chain of references that makes it possible to trace information, locate errors, and prevent fraud. : Balance Ledger Form = A ledger account form that shows the balance on the account after each entry is posted.

question

Chronological Order

answer

Organized in the order in which the events occur.

question

Compound Entry

answer

A journal entry with more than one debit or credit.

question

Correcting Entry

answer

A journal entry made to correct an erroneous entry.

question

Equity

answer

An owner's financial interest in a business.

question

General Journal

answer

A financial record for entering all types of business transactions; a record of original entry.

question

General Ledger

answer

A permanent, classified record of all accounts used in a firm's operation; a record of final entry.

question

Journal

answer

The record of original entry.

question

Journalizing

answer

Recording transactions in a journal.

question

Ledger

answer

The record of final entry.

question

Posting

answer

Transferring data from a journal to a ledger.

question

Stockholders

answer

The owners of corporation; also called shareholders.

question

True

answer

"A ledger account contains a complete record of the individual transaction activity in each account. True or False"

question

The total amount debited will equal the total amount credited.

answer

"If a transaction is properly analyzed and recorded; * only two accounts will be used to record the transaction. * one account balance will increase and another will decrease. * one asset account will be debited and one liability account will be credited. * the total amount debited will equal the total amount credited."

question

Debit Cash; Credit Fees Income

answer

"The journal entry to record $2,450 of revenue earned and received in cash by Agatha Panthis Landscape Architect Company is: * Debit Fees Income; Credit Accounts Receivable * Debit Cash; Credit Fees Income * Debit Fees Income; Credit Cash * Debit Accounts Receivable; Credit Fees Income"

question

False, it is the final entry.

answer

"A ledger is sometimes referred to as a record of original entry. True or False"

question

Source Documents

answer

"Business papers, such as checks, invoices, receipts, letters, and memos, that furnish proof that a transaction has taken place are called: * ledgers * source documents * debit entries * accounts"

question

Compound entries affect more than one debit and/or more than one credit.

answer

"Which of the following statements is correct? * All transactions require compound entries. * Compound entries include only debits. * Accounts being debited should always follow the accounts being credited in a compound entry. * Compound entries affect more than one debit and/or more than one credit."

question

A debit to Utilities Expense and a credit to Cash.

answer

"The journal entry to record the payment of a monthly utility bill would include: * A debit to Utilities Expense and a credit to Capital. * A debit to Capital and a credit to Cash. * A debit to Utilities Expense and a credit to Cash. * A debit to Utilities Expense and a credit to Accounts Payable."

question

Posting

answer

"The process of transferring the data from the journal into the ledgers is called: * footing * posting * transponding * journalizing"

question

Debit Accounts Receivable $1,350; credit Cash $1,350

answer

"Bertrand Inc. performed services for clients in the amount of $1,350 on credit. If this transaction had been posted in error to the Cash account instead of the Accounts Receivable account, what correcting entry would be necessary? * Debit Accounts Receivable $1,350; credit Cash $1,350 * Debit Cash $1,350; credit Accounts Receivable $1,350 * Debit Accounts Receivable $1,350; credit Fees Income $1,350 * Debit Fees Income $1,350; credit Cash $1,350"

question

Debit Office Equipment; Credit Cash

answer

"A purchase of office equipment for $380 cash is journalized as: * Debit Office Equipment; Credit Accounts Payable * Debit Office Equipment; Credit Cash * Debit Equipment Expense; Credit Cash * Debit Cash; Credit Office Equipment"

question

Diary

answer

The general journal acts as the "________" of the business.

question

Compound Entries

answer

_________ _________ contain several debits or credits for a single business transaction, creating efficiencies in journalizing.

question

General Journal

answer

The __________ __________ is similar to a diary. The general journal details, in chronological order, the economic events of the business.

question

General Journal Entry Steps

answer

"1 - Record Date; Year, Month, Day 2 - Record the Debit 3 - Indent about 1/2 inch & Record the Credit 4 - Indent again & Write the Description"

question

Step by Step Method for Analyzing Business Transactions

answer

"1. Analyze the financial event: • Identify the accounts affected. • Classify the accounts affected. • Determine the amount of increase or decrease for each account affected. 2. Apply the rules of debit and credit: a. Which account is debited? For what amount? b. Which account is credited? For what amount? 3.Make the entry in T-account form. 4. Record the complete entry in general journal form."

question

Debit

answer

In Debit/Credit Rules - Increases to asset accounts are recorded as _________.

question

Credit

answer

In Debit/Credit Rules - Decreases to asset accounts are recorded as _________.

question

"The asset account, Equipment, is increased by $6,000. The liability account, Accounts Payable, is increased by $6,000."

answer

"Wells' Consulting Services purchased office equipment on account for $6,000. How would you record the transaction? "

question

"The asset account, Supplies, is increased by $1,500. The asset account, Cash, is decreased by $1,500."

answer

"Wells' Consulting Services purchased supplies for $1,500, Check 1002. How would you record the transaction? "

question

"The asset account, Cash, is decreased by $2,500. The liability account, Accounts Payable, is decreased by $2,500."

answer

"Wells' Consulting Services purchased supplies for $1,500, Check 1002. How would you record the transaction? "

question

Debits

answer

Credits = "__________ = ___________ No matter how many accounts are affected by a transaction, total debits must equal total credits."

question

Debit

answer

"The part of the journal entry to be recorded first is the: a. asset b. credit c. debit d. liability"

question

Diary

answer

"A general journal is like a(n): a. address book. b. appointment calendar. c. diary. d. to-do list."

question

"Source Documents - To provide an audit trail to trace information through the accounting system."

answer

Why are check and invoice numbers included in the journal entry description?

question

It is the first accounting record where transactions are entered.

answer

Why is the journal referred to as the "record of original entry"?

question

No. The only requirement is that the total debits must equal the total credits.

answer

In a compound journal entry, if two accounts are debited, must two accounts be credited?

question

The audit trail will be very difficult to follow.

answer

The accountant for Quality Lawncare never includes descriptions when making journal entries. What effect will this have on the accounting system?

question

General Ledger

answer

"Post journal entries to general ledger accounts. The _______ ______ provides a permanent, classified record for a company's accounts."

question

Journal or Ledger

answer

"Correct errors made in the _______ or ______. Errors must be corrected to ensure a proper audit trail and to provide good information."

question

Record

answer

A journal contains a chronological (day-by-day) _______ of a firm's transactions.

question

Accounts & the Amounts

answer

Each journal entry shows the _______ and the _______ involved.

question

Journal

answer

Using the ______ as a guide, you can enter transaction data in the accounts.

question

T Accounts

answer

________ are used to analyze transactions quickly but are not used to maintain financial records.

question

Ledger

answer

The account forms are kept in a book or binder called a ________.

question

Master Reference

answer

Every business has a general ledger. The general ledger is the _______ reference file for the accounting system. It provides a permanent, classified record of all accounts used in a firm's operations.

question

Accounting System

answer

Every business has a general ledger. The general ledger is the _______ reference file for the accounting system. It provides a permanent, classified record of all accounts used in a firm's operations.

question

Permanent

answer

Every business has a general ledger. The general ledger is the _______ reference file for the accounting system. It provides a permanent, classified record of all accounts used in a firm's operations.

question

Account Forms

answer

There are different types of general ledger ______ ______.

question

Balance Ledger Form

answer

A ______ ______ _____ shows the balance of the account after each entry is posted.

question

Recording Transactions

answer

Business managers should be sure that their firms have efficient procedures for __________ ________.

question

Timely ; Acccurate

answer

A well-designed accounting system allows ______ and ______ posting of data to the ledger accounts.

question

Financial Statements

answer

The information that appears in the ______ ______ is taken from the general ledger.

question

Decision Making

answer

Since management uses financial information for ______ ______, it is essential that the financial statements be prepared quickly at the end of each period and that they contain the correct amounts.

question

Recording Process

answer

The promptness and accuracy of the statements depend on the efficiency of the ______ ______.

question

Audit Trail

answer

A well-designed accounting system has a strong ______ ______.

question

Trace

answer

Every business should be able to ______ amounts through the accounting records and back to the documents where the transactions were first recorded.

question

Financial Statements

answer

Since management uses financial information for Decision Making, it is essential that the ______ ______ be prepared quickly at the end of each period and that they contain the correct amounts.

question

Quickly

answer

Since management uses financial information for Decision Making, it is essential that the financial statements be prepared ______ at the end of each period and that they contain the correct amounts.

question

Each Period

answer

Since management uses financial information for Decision Making, it is essential that the financial statements be prepared quickly at the end of ______ ______ and that they contain the correct amounts.

question

The Ledger Account Number

answer

What is entered in the Posting Reference Column of the General Journal?

question

The indicate that the entry has been posted ; ensure against posting the same entry twice.

answer

Why are posting references made in ledger accounts and in the journal?

question

False, if an incorrect journal entry was posted, a correcting entry should be jouralized ; posted. To ensure honesty and provide a clear audit trail, erasures are not permitted in the journal

answer

If a journal entry that contains an error has been posted, erase the entry and change the posting in the ledger accounts. True or False?

question

False, if an incorrect journal entry was posted, a correcting entry should be jouralized ; posted. To ensure honesty and provide a clear audit trail, erasures are not permitted in the journal

answer

Once an incorrect journal entry has been posted, the incorrect amounts remain in the general ledger accounts. True or False?

question

Date Order

answer

The general journal organizes accounting information in: a. account order. b. alphabetical order. c. date order.

question

Step 1) Analyze Transactions Step 2) Journalize Transaction Step 3) Post Transactions

answer

What are the first three steps of the accounting cycle?

question

First 3 Steps of the Accounting Cycle

answer

Step 1) Analyze Transactions Step 2) Journalize Transaction Step 3) Post Transactions"

question

26,150

answer

Foot and find the balance of the Cash account. Cash. -------------------------------------------- + | - 26,000 | 10,000 18,000 | 3,000 | 2,500 | 2,350 a. 44,000 b. 29,500 c. 26,150 d. 24,100

question

Recording Transactions

answer

_______ ________ in a journal is called journalizing, the second step in the accounting cycling.

question

Second Step

answer

Recording transactions in a journal is called journalizing, the _______ _______ in the accounting cycling.

question

Transactions

answer

A journal is a daily record of _______.

question

Written Analysis

answer

A _______ _______ of each transaction is contained in a journal.

question

First

answer

The debit portion is always recorded ______.

question

Audit Trail

answer

If possible, include source document numbers in descriptions in order to create an ______ ______.

question

Source Document

answer

If possible, include ______ ______ numbers in descriptions in order to create an audit trail.

question

Compound Journal Entries

answer

A transaction might require a journal entry that contains several debits or credits.

question

Third

answer

Posting to the general ledger is the ______ step in the accounting cycle.

question

Transfer

answer

Posting is the ______ of data from journal entries to ledger accounts.

question

Accounts

answer

The individual ______ together form a ledger.

question

Accounting Cycle Steps

answer

"1. Analyze transactions 2. Journalize transactions 3. Post transactions"

question

Audit Trail

answer

To ensure honesty and to provide a clear ______ ______, erasures are not permitted in a journal.

question

Correcting Entry

answer

A ______ ______ is journalized and posted to correct a previous mistake.

question

Cross Reference

answer

Posting references in the journal and the ledger accounts ______ ______ the entries and form another part of the audit trail. They make it possible to trace or recheck any transaction.

question

Debit Accounts Payable and Credit Cash

answer

"A firm paid cash to apply against a debt. To record this transaction, the accountant would * Debit Accounts Receivable and Credit Cash * Debit Accounts Payable and Credit Cash * Debit Cash and Credit Accounts Payable * Credit Cash and Credit Accounts Payable"

question

9

answer

"If the trial balance totals are not equal, the error may have been caused by a transposition if the difference is divisible by * 2 * 7 * 9 * 5"

question

The Revenue Account

answer

"The account used to record increases in owner's equity from the sale of goods or services is * The Revenue Account * The Cash Account * The Capital Account * The Drawing Account"

question

Statement of Owner's Equity

answer

"Which of the following is not one of the formal financial statements that is made available to all users of the financial statements. * Trial Balance * Income Statement * Statement of Owner's Equity * Balance Sheet"

question

Debit Cash; Credit Accounts Payable

answer

"A business pays a creditor on account. The journal entry to record this transaction is: * Debit Accounts Payable; Credit Cash * Debit Accounts Receivable; Credit Accounts Payable * Debit Cash; Credit Accounts Payable * Debit Accounts Receivable; Credit to Cash"

question

Expenses ; Assets

answer

"Which of the following types of accounts normally have debit balances? * Assets And Revenue * Assets, Liabilities, And Owner's Equity * Expenses And Assets * Liabilities And Owner's Equity"

question

False

answer

"Debit entries increase asset, drawing, expense and liability accounts. True or False"

question

False

answer

"The modern system of accounting is called the double-entry system because a debit to one account is balanced by a credit to another account. True or False"

question

True

answer

"Another name for temporary accounts is real accounts. True or False"

question

Account Balance

answer

The difference between the amounts recorded on the two sides of an account.

question

Accounts

answer

Written records of the assets, liabilities, and owner's equity of a business.

question

Chart of Accounts

answer

A list of the accounts used by a business to record its final transactions.

question

Classification

answer

A means of identifying each account as an asset, liability, or owner's equity.

question

Credit

answer

An entry on the right side of an account.

question

Debit

answer

An entry on the left side of an account.

question

Double-Entry System

answer

An accounting system that involves recording the effects of each transaction as debits and credits.

question

Drawing Account

answer

A special type of owner's equity account set up to record the owner's withdrawal of cash from the business.

question

Footing

answer

A small pencil figure written at the base of an amount column showing the sum of the entries in the column.

question

Normal Balance

answer

The increase side of an account

question

Permanent Account

answer

An account that is kept open from one accounting period to the next.

question

Slide

answer

An accounting error involving a misplaced decimal point.

question

T-Account

answer

A type of account, resembling a T, used to analyze the effects of a business transaction.

question

Temporary Account

answer

An account whose balance is transferred to another account at the end of an accounting period.

question

Transposition

answer

An accounging error involving misplaced digits in a number.

question

Trail Balance

answer

A statement to test the accuracy of total debits and credits after transactions have been recorded.

question

T-Accounts

answer

Set up T accounts for assets, liabilities, and owner's equity.

question

Visual Tool

answer

The T account is an important visual tool used as an alternative to the fundamental accounting equation.

question

Accounts

answer

Analyze business transactions and enter them in the ______.

question

Analyze & Classify

answer

Accountants often use T accounts to help ______ and ______ business transactions.

question

Balances

answer

Accurate account ______ contribute to a reliable accounting system.

question

Accounting Equation

answer

Assets = Liabilities

question

Assets

answer

Liabilities

question

Owner's Equity

answer

What is the Accounting Equation?

question

Transactions

answer

Analyze business _______ and enter them in the accounts.

question

Owes

answer

Liabilities are amounts a business owes its creditors.

question

Right

answer

Liabilities appear on the _______ side of the accounting equation (Assets = Liabilities

question

Right

answer

Increases in liabilities are on the _______ side of liability T accounts.

question

Left

answer

Decreases in liabilities are on the _______ side of liability T accounts.

question

Increases

answer

"For liability T accounts • right side shows ______ • left side shows decreases."

question

Decreases

answer

"For liability T accounts • right side shows increases, • left side shows _______"

question

Normal Balance

answer

Usually account balances appear on the increase side of the account. The increase side of the account is the _______ _______ of the account.

question

Increases in asset accounts are recorded on the left side. Increases in liability and owner's equity accounts are recorded on the right side.

answer

Increases are recorded on which side of asset, liability, and owner's equity accounts?

question

The sum of several entries on either side of an account that is entered in small pencil figures.

answer

What is a footing?

question

The increase side of an account. The normal balance of an asset account is on the left side. The normal balance of liability and owner's equity accounts is on the right side.

answer

What is meant by the "normal balance" of an account? What is the normal balance side for asset, liability, and owner's equity accounts?

question

Equipment is increased by $10,800. Accounts Payable is increased by $10,800.

answer

"The Wilson Company purchased new computers for $10,800 from Office Supplies, Inc., to be paid in 30 days. Which of the following is correct? a. Equipment is increased by $10,800. Accounts Payable is decreased by $10,800. b. Equipment is increased by $10,800. Accounts Payable is increased by $10,800. c. Equipment is decreased by $10,800. Accounts Payable is increased by $10,800. d. Equipment is increased by $10,800. Cash is decreased by $10,800. "

question

"Assets

answer

Liabilities

question

Owner's Equity 40,000

answer

10,000

question

30,000"

answer

"From the following accounts, show that the fundamental accounting equation is in balance. All accounts have normal balances. Cash—$15,400 Accounts Payable—$10,000 David Jenkins, Capital—$30,000 Equipment—$20,000 Supplies—$4,600"

question

Accounting Cycle

answer

A series of steps performed during each accounting period to classify, record, and summarize data for a business and to produce needed financial information.

question

Audit Trail

answer

A chain of references that makes it possible to trace information, locate errors, and prevent fraud.

question

Balance Ledger Form

answer

A ledger account form that shows the balance of the account after each entry is posted.

question

Chronological Order

answer

Organized in the order in which the events occur.

question

Compound Entry

answer

A journal entry with more than one debit or credit.

question

Correcting Entry

answer

A journal entry made to correct an erroneous entry.

question

General Journal

answer

A financial record for entering all types of business transactions; a record of original entry.

question

General Ledger

answer

A permanent, classified record of all accounts used in a firm's operation; a record of final entry.

question

Journal

answer

The record of original entry.

question

Journalizing Recording transactions in a journal. Ledger

answer

The record of final entry.

question

Posting

answer

Transferring data from a journal to a ledger.

question

Account Form Balance Sheet

answer

A balance sheet that lists assets on the left and liabilities and owner's equity on the right (see Report form balance sheet)

question

Adjusting Entries

answer

A journal entries made to update accounts for items that were not recorded during the accounting period.

question

Adjustments

answer

A journal entries made to update accounts for items that were not recorded during the accounting period.

question

Book Value

answer

That portion of an asset's original cost that has not yet been depreciated.

question

Contra Account

answer

An account with a normal balance that is opposite that of a related account.

question

Contra Asset Account

answer

An asset account with a credit balance, which is contrary to the normal balance of an asset account.

question

Depreciation

answer

Allocation of the cost of a long-term asset to operations during its expected useful life.

question

Prepaid Expenses

answer

Expense items acquired, recorded, and paid for in advance of their use.

question

Report Form Balance Sheet

answer

A balance sheet that lists the asset accounts first, followed by liabilities and owner's equity.

question

Salvage Value

answer

An estimate of the amount that could be received by selling or disposing of an asset at the end of its useful life.

question

Straight-Line Depreciation

answer

Allocation of an asset's cost in equal amounts to each accounting period of the asset's useful life.

question

Worksheet

answer

A form used to gather all data needed at the end of an accounting period to prepare financial statements.

question

Worksheet

answer

You complete a trial balance on a _______.

question

Trial Balance

answer

You complete a ______ ______ balance on a worksheet.

question

Time ; Effort

answer

______ and ______ can be saved when the trial balance is prepared directly on the worksheet. Amounts can be easily transferred to other sections of the worksheet.

question

Business

answer

Not all business transactions occur between separate business entities. Some financial events occur within a business and need to be recorded.

question

Trial Balance

answer

If total debits do not equal total credits, there is an error in the financial records. The error must be found and corrected.

question

Steps to Prepare the Trial Balance Section of the Worksheet

answer

"1) Enter the general ledger account names. 2) Transfer the general ledger account balances to the Debit & Credit columns of the Trail Balance section. 3) Total the Debit & Credit columns to prove that the trial balance is in balance. 4) Place a double rule under each Trial Balance column to show that the work in that column is complete. "

question

Prepaid Expenses

answer

Prepaid rent is recorded as an asset at the time it is paid. As time elapses, the asset is used up. An adjustment is made to reduce the asset and to recognize rent expense

question

Depreciation

answer

(Cost - Salvage Value)/(Estimated Useful Life)

question

Accumulated Depreciation

answer

_______ _________ is a contra asset account. The normal balance of an asset account is a debit. The normal balance of a contra asset account is a credit.

question

Contra Accounts

answer

The normal balance for a contra account is the opposite of the related account.

question

Entries made to update accounts at the end of an accounting period to include previously unrecorded items that belong to the period.

answer

What are adjustments?

question

So that the financial statements can be prepared more efficiently.

answer

Why is the worksheet prepared?

question

Because prepayments they are not yet incurred, they are not recorded as expenses. Rather, they are classified as current assets. Prepaid expenses may need to be adjusted at the end of the accounting period. The adjusting entry for prepaid expense depends upon the journal entry made when it was initially recorded.

answer

Why are prepaid expenses adjusted at the end of an accounting period?

question

Rent Expense is debited for $3,600. Prepaid Rent is credited for $3,600.

answer

"On January 1, a firm paid $21,600 for six months' rent, January through June. What is the adjustment for rent expense at the end of January? a. Rent Expense is debited for $21,600 and Prepaid Rent is credited for $21,600. b. Rent Expense is debited for $3,600 and Prepaid Rent is credited for $3,600. c. Prepaid Rent is debited for $3,600 and Rent Expense is credited for $3,600. d. No adjustment is made until the end of June."

question

Supplies Expense is debited for $900. Supplies is credited for $900.

answer

"A firm paid $1,200 for supplies during the accounting period. At the end of the accounting period, the firm had $300 of supplies on hand. What adjustment is entered on the worksheet? a. Supplies Expense is debited for $900 and Supplies is credited for $900. b. Supplies is debited for $300 and Supplies Expense is credited for $300. c. Supplies Expense is debited for $300 and Supplies is credited for $300. d. Supplies is debited for $900 and Supplies Expense is credited for $900."

question

28,000

answer

Three years ago, HB Delivery bought a delivery truck for $70,000. The truck has no salvage value and a five-year useful life. What is the book value of the truck at the end of three years?

question

Worksheet

answer

The ________ summarizes both internal and external financial events of a period.

question

Saves Time

answer

Using a worksheet ______ ______ in preparing the financial statements.

question

Update

answer

Adjusting entries _______ the financial records of the business.

question

Locating Errors

answer

If total debits do not equal total credits, find the difference between total debits and total credits. If the difference is divisible by 9, there could be a transposition error. If the difference is divisible by 2, an amount could be entered in the wrong (Debit or Credit) column.

question

Net Income

answer

The difference between the Debit and Credit columns of the Income Statement section represents net income. The difference between the Debit and Credit columns of the Balance Sheet section should equal the net income amount.

question

$3,120.00

answer

"Equipment costing $13,500 with an estimated salvage value of $1,020 and an estimated life of 4 years was purchased on November 1, 2013. Using the straight-line depreciation method, what is the amount of depreciation expense to be recorded at December 31, 2013? $260 $520 $3,120 $1,020"

question

The Income Statement Credit Column

answer

"On a worksheet, the adjusted balance of the revenue account Fees Income would be extended to: * The Income Statement Debit Column. * The Balance Sheet Credit Column. * The Balance Sheet Debit Column. * The Income Statement Credit Column"

question

The Income Statement Credit Column

answer

"On a worksheet, the adjusted balance of the Accumulated Depreciation account is extended to: * The Income Statement Debit Column. * The Income Statement Credit Column. * The Balance Sheet Debit Column. * The Balance Sheet Credit Column."

question

True

answer

"Land is a long-term asset that is not subject to depreciation. True or False"

question

True

answer

"If an adjustment is not recorded for supplies used, the firm's assets will be overstated. True or False"

question

Not Appear On Any Financial Statement.

answer

"The balance in the account Accumulated Depreciation, Equipment will * Be Reported On The Income Statement. * Be Reported On The Statement Of Owner's Equity. * Will Be Reported On The Balance Sheet. * Not Appear On Any Financial Statement."

question

The cost of supplies used represents an operating expense of the business.

answer

"Which of the following statements is correct? * The cost of supplies used is reported on the statement of owner's equity. * The cost of supplies used represents an operating expense of the business. * Accumulated Depreciation--Equipment is presented in the Liabilities section of a balance sheet. * At the time of their acquisition, prepaid expenses are recorded in expense accounts."

question

* Recorded In The Balance Sheet Debit Column.

answer

"On a worksheet, a net loss is * Recorded In The Income Statement Debit Column. * Recorded In The Balance Sheet Debit Column. * Recorded In The Balance Sheet Credit Column. * Not Recorded."

question

" • Service Business • Manufacturing Business • Merchandising Business"

answer

What are the 3 types of business?

question

B) $4,968

answer

"On Deck Sports Memorabilia store sells a Babe Ruth rookie card for $4,600 on account. If the sales tax on the sale is 8%, what is the amount debited to Accounts Receivable? A) $4,232 B) $4,968 C) $4,600 D) $4,592"

question

c. increases credit sales

answer

" Which of the following is not a reason to use a sales journal? a. increases efficiency b. allows division of work c. increases credit sales d. improves audit trail"

question

c. service, merchandising, manufacturing.

answer

" Types of business operations are: a. service, merchandising, corporation. b. sole proprietorship, merchandising, manufacturing. c. service, merchandising, manufacturing."

question

"1. Sales Journals 2. Cash Receipts Journals 3. Purchases Journals 4. Cash Payments Journals."

answer

4 Types of Special Journals

question

3 Types of Business

answer

" • Service Business • Manufacturing Business • Merchandising Business"

question

A sales journal is used to record only sales of merchandise on credit.

answer

What type of transaction is recorded in the sales journal?

question

A sales return results when a customer returns goods and the firm takes them back. A sales allowance results when the firm gives a customer a reduction in the price of the good or service.

answer

What is a sales return? What is a sales allowance?

question

"A special journal is a journal that is used to record only one type of transaction. 1) Sales Journal 2) Expense Journal 3) Cash Receipts Journal 4) Cash Payments Journal"

answer

What is a special journal? Give four examples of special journals.

question

A) Balance Sheet

answer

"Which financial statement shows the results of operations for a given period? A) Balance Sheet B) Statement of Owner's Equity C) Income Statement D) Statement of Annual profits"

question

A) Cash

answer

"Which account is used to close revenue and expense accounts? A) Cash B) Income Summary C) Liability D) Capital"

question

A) cash receipts journal.

answer

"In a firm that uses special journals, an additional cash investment received from the owner is recorded in the: A) cash receipts journal. B) sales journal. C) cash payments journal. D) general journal."

question

A) Debit Cash $5,000 ---- Credit Wages Expense $5,000

answer

"A corporation paid$5,000 for the current month's payroll. Which entry is needed? A) Debit Cash $5,000 ---- Credit Wages Expense $5,000 B) Debit Wages Expense $5,000 ---- Credit Wages Payable $5,000 C) Debit Capital $5,000 ---- Credit Cash $5,000 D) Debit Wages Expense $5,000 ---- Credit Cash $5,000 "

question

"A) Interest Expense B) Interest Payable"

answer

"Which two accounts will have adjusting Journal Entries to record the interest that has been incurred but not paid on a note payable? (Choose 2 Answers) A) Interest Expense B) Interest Payable C) Notes Payable D) Cash"

question

A) Journal entry description

answer

"What information does an accountant enter the general ledger? A) Journal entry description B) Computation of debit balance C) Credit Amount D) Date of Posting"

question

A) Owners ; Managers

answer

"Which group should make use of accounting information when determining whether to open an additional store location? A) Owners and Managers B) Supplies C) Customers D) Employees and Unions"

question

a.Sales Returns and Allowances, Sales Tax Payable, Accounts Receivable

answer

"Which of the following general ledger accounts would appear in a sales returns and allowances journal? a. Sales Returns and Allowances, Sales Tax Payable, Accounts Receivable b. Sales Returns and Allowances, Sales, Accounts Receivable c. Sales Returns, Sales Allowances, Sales"

question

Account Receivable Ledger

answer

A subsidiarysidiary Ledger that contains credit customer accounts

question

Accounting Information Systems

answer

_______ _______ _______ collect and process data from transactions and events, organize them in useful reports, and communicate results to decision makers.

question

Accounting System Components

answer

"Source Documents Input Devices Processors Storage Output Devices"

question

Accounting System Principles

answer

"Control Relevance Compatibility Flexibility Cost-Benefit"

question

Accounting System Technology

answer

"Computers Data Processing Networks Enterprise Resource Planning (ERP)"

question

ACCOUNTS PAYABLE Type of Ledger's Content

answer

Accounts for Creditors

question

ACCOUNTS RECEIVABLE Type of Ledger's Content

answer

Accounts for Credit Customers

question

Adjust, Adapt, Enviornment, Needs, Technnological Advances, Competive Pressures, Consumer Tastes, Regulations, Activiteis, Evolve

answer

Accounting information systems must be able to ______ to changes. The flexibility principle prescribes that an accounting information system be able to ______ to changes in the company, business ______, and ______ of decision makers. ______ ______, ______ ______, ______ ______, ______, and company ______ constantly ______. A system must be designed to adapt to these changes.

question

ASSET Master Account

answer

ACCOUNTS RECEIVABLE is a subsidiary account for what Master Account?

question

ASSET Master Account

answer

ACCUMLATED DEPRECTION - STORE EQUIPMENT is a subsidiary account for what Master Account?

question

ASSET Master Account

answer

ACCUMULATED DEPRECIATION - OFFICE EQUIPMENT is a subsidiary account for what Master Account?

question

ASSET Master Account

answer

ALLOWANCE FOR DOUBTFUL ACCOUNTS is a subsidiary account for what Master Account?

question

ASSET Master Account

answer

CASH is a subsidiary account for what Master Account?

question

ASSET Master Account

answer

INTERTERST RECEIVABLE is a subsidiary account for what Master Account?

question

ASSET Master Account

answer

MERCHANDISE INVENTORY is a subsidiary account for what Master Account?

question

ASSET Master Account

answer

NOTES RECEIVABLE is a subsidiary account for what Master Account?

question

ASSET Master Account

answer

OFFICE EQUIPMENT is a subsidiary account for what Master Account?

question

ASSET Master Account

answer

PETTY CASH FUND is a subsidiary account for what Master Account?

question

ASSET Master Account

answer

PREPAID INSURANCE is a subsidiary account for what Master Account?

question

ASSET Master Account

answer

PREPAID INTEREST is a subsidiary account for what Master Account?

question

ASSET Master Account

answer

STORE EQUIPMENT is a subsidiary account for what Master Account?

question

ASSET Master Account

answer

SUPPLIES is a subsidiary account for what Master Account?

question

B) $540.00

answer

"A wholesale business sells goods with a list price of $900 and a trade discount of 40 percent. The net price is A) $360.00. B) $540.00. C) $900.00. D) $940.00."

question

B) Cash Receipts Journal

answer

"In a firm that uses special journals, the sale of merchandise for cash is recorded in the A) Cash Payments Journal. B) Cash Receipts Journal. C) Sales Journal. D) Purchases Journal."

question

B) Credit to Utilities Payable

answer

"A corporation did not yet receive the September electric bill, so it decides to accrue an estimate of $1,000. What is the appropriate journal entry? A) Debit to Prepaid Insurance B) Credit to Utilities Payable C) Credit to Cash D) Debit to Entertainment Expense"

question

B) Fees Income

answer

"From the adjusted trial balance, which account balance is entered in the balance sheet columns? A) Depreciation Expense B) Fees Income C) Rent Expense D) Owner, Capital"

question

B) on the income statement as a deduction from Sales.

answer

"The Sales Returns and Allowances account is presented A) on the balance sheet as a deduction from Accounts Receivable. B) on the income statement as a deduction from Sales. C) on the income statement as an addition to Sales. D) on the balance sheet as a deduction from Capital."

question

B) To reduce the risk of illegal or unethical behavior by low level firm employees.

answer

"What is the one reason for honest and ethical accounting practices? A) To ensure clarity of accounting data for all interested parties B) To reduce the risk of illegal or unethical behavior by low level firm employees C) To follow through on an investor mandate of maximizing shareholder value D) To reduce net income as a result of higher costs "

question

C) Debit Rent Expense $3,000 ---- Credit Prepaid Rent $3,000

answer

"On November 30, 2014, Company A paid $6,000 rent for December & January. What would be the correct adjusting entry at the end of December to show the expiration of one month's rent? A) Debit Cash $3,000 ---- Credit Prepaid Rent $3,000 B) Debit Rent Expense $3,000 ---- Credit Cash $3,000 C) Debit Rent Expense $3,000 ---- Credit Prepaid Rent $3,000 D) Debit Cash $3,000 ---- Credit Rent Expenses $3,000"

question

C) Sales Journal.

answer

"In a firm that uses special journals, a sale of merchandise on credit is recorded in the A) Cash Payments Journal. B) Cash Receipts Journal. C) Sales Journal. D) Purchases Journal."

question

C) the net price.

answer

"The amount used by wholesalers to record sales in its sales journal is A) the retail price. B) the list price. C) the net price. D) the original price."

question

c. income statement

answer

"Where would you report net sales? a. sales general ledger account b. general journal c. income statement d. sales journal"

question

CASH PAYMENTS Type of Journal's Purpose

answer

To record all disbursements of cash

question

CASH RECEIPTS Type of Journal's Purpose

answer

To record cash received from all sources

question

Charge-Account Sales

answer

Sales made through the use of open-account credit or one of carious types of credit cards

question

Compatibility Principle

answer

Accounting information systems must be consistent with the aims of a company. The ______ ______ prescribes that an accounting information system conform with a company's activities, personnel, and structure. It also must adapt to a company's unique characteristics. The system must not be intrusive but must work in harmony with and be driven by company goals

question

"Computers Data Processing Networks Enterprise Resource Planning (ERP) "

answer

What is needed for the Accounting System Technology?

question

Consistent, Actvities, Personnel, Structure, Adapt, Unique Characteristics, Intrusive, Harmony, Driven

answer

Accounting information systems must be ______ with the aims of a company. The Combaility Principle prescribes that an accounting information system conform with a company's ______, ______, and ______. It also must ______ to a company's ______ ______. The system must not be ______ but must work in ______ with and be ______ by company goals

question

Contra Revenue Account

answer

an account with a debit balance, which is contray to the normal balance for a revenue account

question

Contra, Few, General

answer

"Record sales returns and allowances in the general journal. Sales returns and allowances are usually debited to a ______ revenue account. A firm with relatively ______ sales returns and allowances could use the ______ journal to record these transactions."

question

Control Account

answer

An account that links a subsidiarysidiary ledger and the general ledger since its balance summarizes the balances of the accounts in the subsidiarysidiary ledger

question

Control Principle

answer

The _______ _______ prescribes that an accounting information system have internal controls.

question

"Control Relevance Compatibility Flexibility Cost-Benefit"

answer

What are the Accounting System Principles?

question

Control, Relevance, Compatibility, Flexibility

answer

Decisions regarding other systems principles (______, ______, ______, and ______) are also affected by the cost-benefit principle.

question

COST OF GOODS SOLD Master Account

answer

FREIGHT is a subsidiary account for what Master Account?

question

COST OF GOODS SOLD Master Account

answer

PURCHASES DISCOUNTS is a subsidiary account for what Master Account?

question

COST OF GOODS SOLD Master Account

answer

PURCHASES is a subsidiary account for what Master Account?

question

COST OF GOODS SOLD Master Account

answer

PURCHASES RETURNS ; ALLOWANCES is a subsidiary account for what Master Account?

question

Cost-Benefit Principle

answer

The ______-______ ______ prescribes that the benefits from an activity in an accounting information system outweigh the costs of that activity. The costs and benefits of an activity such as producing a specific report will impact the decisions of both external and internal users.

question

Credit Memorandum

answer

A note verifying that a customer's account is being reduced by the amount of sales return or sales allowance plus any sales tax that may have been invovlevd.

question

Credit Sales, Daily Basis, Time of Sale, Reflect, Appropriate, Liability

answer

"Record credit sales in a sales journal. The sales journal is used to record ______ ______ transactions, usually on a ______ ______. For sales transactions that include sales tax, the sales tax liability is recorded at the ______ of the ______ to ensure that company records ______ the appropriate amount of sales tax ______."

question

Credit, Credit, Transactions, Credit, Transaction, Debiting, Accounts Receivable, Crediting, Cash

answer

"Record credit card sales in appropriate journals. ______ sales are common, and different ______ arrangements are used. Businesses that have few ______ with ______ card companies normally record these ______ in the sales journal by ______ the usual ______ ______ account in the general ledger and ______ the same Sales account that is used for ______ sales."

question

D) General Journal.

answer

"In a firm that uses special journals, an allowance given for damaged merchandise is recorded in the A) Cash Payments Journal. B) Cash Receipts Journal. C) Purchases Journal. D) General Journal."

question

D) General Journal.

answer

"In a firm that uses special journals, the acceptance of a return of merchandise from a credit customer is recorded in the A) Cash Receipts Journal. B) Sales Journal. C) Cash Payments Journal. D) General Journal."

question

D) sales recorded net of trade discounts.

answer

"The amount of the trade discount taken by the customer is recorded as a(n) A) asset. B) liability. C) expense. D) sales recorded net of trade discounts."

question

Decision Makers, Accounting Information Systems

answer

All _______ _______ need to have a basic knowledge of how _______ _______ _______ work.

question

Difference, Decisions, Decision Makers, Relevant Information

answer

The relevance principle prescribes that an accounting information system report useful, understandable, timely, and pertinent information for effective decision making. The system must be designed to capture data that make a ________ in ________. To ensure this, we must consider all ________ ________ when identifying ________ ________ for disclosure.

question

EXPENSES Master Account

answer

ADVERTISING EXPENSE is a subsidiary account for what Master Account?

question

EXPENSES Master Account

answer

BANK FEES EXPENSE is a subsidiary account for what Master Account?

question

EXPENSES Master Account

answer

CASH SHORT OR OVER EXPENSE is a subsidiary account for what Master Account?

question

EXPENSES Master Account

answer

DELIVERY EXPENSE is a subsidiary account for what Master Account?

question

EXPENSES Master Account

answer

DEPRECITION EXPENSE - STORE EQUIPMENT is a subsidiary account for what Master Account?

question

EXPENSES Master Account

answer

DEPRECITION EXPENSE - STORE EQUIPMENT is a subsidiary account for what Master Account?

question

EXPENSES Master Account

answer

INSURANCE EXPENSE is a subsidiary account for what Master Account?

question

EXPENSES Master Account

answer

INTEREST EXPENSE is a subsidiary account for what Master Account?

question

EXPENSES Master Account

answer

MICELLANEOUS EXPENSE is a subsidiary account for what Master Account?

question

EXPENSES Master Account

answer

PAYROLL TAXES EXPENSE is a subsidiary account for what Master Account?

question

EXPENSES Master Account

answer

RENT EXPENSE is a subsidiary account for what Master Account?

question

EXPENSES Master Account

answer

SALARIES EXPENSE - OFFICE is a subsidiary account for what Master Account?

question

EXPENSES Master Account

answer

SALARIES EXPENSE - SALES is a subsidiary account for what Master Account?

question

EXPENSES Master Account

answer

SUPPLIES EXPENSE is a subsidiary account for what Master Account?

question

EXPENSES Master Account

answer

TELEPHONE EXPENSE is a subsidiary account for what Master Account?

question

EXPENSES Master Account

answer

UNCOLLECTIBLE ACCOUNTS EXPENSE is a subsidiary account for what Master Account?

question

EXPENSES Master Account

answer

UTILITIES EXPENSE is a subsidiary account for what Master Account?

question

False

answer

"When a business makes a sale on a bank credit card, the business is responsible for collecting from the customer. True or False"

question

Felxibility Principle

answer

Accounting information systems must be able to adjust to changes. The ______ ______ prescribes that an accounting information system be able to adapt to changes in the company, business environment, and needs of decision makers. Technological advances, competitive pressures, consumer tastes, regulations, and company activities constantly evolve. A system must be designed to adapt to these changes.

question

GENERAL Type of Journal's Purpose

answer

To record all transactions that are not recorded in another special journal and all adjusting and closing entries

question

GENERAL Type of Ledger's Content

answer

Assets, Liabilities, Owner's Equity, Revenue, and Extra Expense

question

Impact

answer

The cost-benefit principle prescribes that the benefits from an activity in an accounting information system Outweigh the costs of that activity. The costs and benefits of an activity such as producing a specific report will ______ the decisions of both external and internal users.

question

Individual accounts for all credit customers.

answer

Which accounts are kept in the accounts receivable ledger?

question

Internal Controls

answer

________ ________ are methods and procedures allowing managers to control and monitor business activities.

question

Invoice

answer

A customer billing for merchandise bought on credit

question

Left to Right

answer

When posting from the sales journal, post information moving from _______ to _______ across the ledger form.

question

LIABILTIES Master Account

answer

ACCOUNTS PAYABLE is a subsidiary account for what Master Account?

question

LIABILTIES Master Account

answer

EMPLOYEE INCOME TAX PAYABLE is a subsidiary account for what Master Account?

question

LIABILTIES Master Account

answer

FEDERAL UNEMPLOYMENT TAX PAYABLE is a subsidiary account for what Master Account?

question

LIABILTIES Master Account

answer

INTEREST PAYABLE is a subsidiary account for what Master Account?

question

LIABILTIES Master Account

answer

MEDICARE TAX PAYABLE is a subsidiary account for what Master Account?

question

LIABILTIES Master Account

answer

NOTES PAYABLE - BANK is a subsidiary account for what Master Account?

question

LIABILTIES Master Account

answer

NOTES PAYABLE - TRADE is a subsidiary account for what Master Account?

question

LIABILTIES Master Account

answer

SALARIES PAYABLE is a subsidiary account for what Master Account?

question

LIABILTIES Master Account

answer

SALES TAX PAYABLE is a subsidiary account for what Master Account?

question

LIABILTIES Master Account

answer

SOCIAL SECURITY TAX PAYABLE is a subsidiary account for what Master Account?

question

LIABILTIES Master Account

answer

STATE UNEMPLOYMENT TAX PAYABLE is a subsidiary account for what Master Account?

question

List Pirce

answer

an estabilished retail price

question

Manufacturing Business

answer

A business that sells goods that it has produced.

question

Merchandise Business

answer

A business that sells goods purchased for resale

question

Merchandise Inventory

answer

The stock of goods a merchandising business keeps on hand.

question

Net Price

answer

The list price less all trade discounts

question

Net Sales

answer

The difference between the balance in the sales account and the balance in the sales returns and allowances account

question

Open Account Credit

answer

a system that allows the sale of services or goods with the understanding that payment will be made at a later date.

question

Outweigh

answer

The cost-benefit principle prescribes that the benefits from an activity in an accounting information system ______ the costs of that activity. The costs and benefits of an activity such as producing a specific report will impact the decisions of both external and internal users.

question

OWNER'S EQUITY Master Account

answer

INCOME SUMMARY is a subsidiary account for what Master Account?

question

OWNER'S EQUITY Master Account

answer

OWNER CAPITAL is a subsidiary account for what Master Account?

question

OWNER'S EQUITY Master Account

answer

OWNER DRAWING is a subsidiary account for what Master Account?

question

Policies, Direct Operations, Goals, Reports, Assets, Methods, Regulations

answer

"Internal Controls include ________ to ________ ________ toward common ________ , procedures to ensure reliable financial ________, safeguards to protect company ________, and ________ to achieve compliance with laws and ________ ."

question

PURCHASES Type of Journal's Purpose

answer

To record purchases of merchandise on credit

question

Retail Business

answer

A business that sells directly to individual consumers

question

Revelance Principle

answer

The ________ ________ prescribes that an accounting information system report useful, understandable, timely, and pertinent information for effective decision making. The system must be designed to capture data that make a difference in decisions. To ensure this, we must consider all decision makers when identifying relevant information for disclosure.

question

REVENUE Master Account

answer

INTEREST INCOME is a subsidiary account for what Master Account?

question

REVENUE Master Account

answer

MISCELLANEOUS INCOME is a subsidiary account for what Master Account?

question

REVENUE Master Account

answer

SALES is a subsidiary account for what Master Account?

question

REVENUE Master Account

answer

SALES RETURNS ; ALLOWANCES is a subsidiary account for what Master Account?

question

sales allowances

answer

A reduction in the price originally charged to customers for goods or services

question

Sales Journal

answer

A _______ _______ is used to record only sales of merchandise on credit.

question

Sales Journal

answer

A special journal used to record sales of merchandise on credit

question

Sales minus sales returns.

answer

What are net sales?

question

Sales Return

answer

A firm's acceptance of a return of goods from a cutomer

question

SALES Type of Journal's Purpose

answer

To record sales of merchindise on credit

question

Saltes Returns ; Allowances

answer

A cotnra revenue account where sales returns and sales allowances are recorded; sales returns and allowances are subsidiarytracted from sales to determine net sales.

question

Schedule of Accounts Receivable

answer

A listing of all balances of the accoutns in the accounts receivable subsidiarysidiary ledger

question

Schedule, Prepared, Prove, Against, Reports, Due, Credit

answer

"Prepare a schedule of accounts receivable. Each month a ______ of accounts receivable is ______. It is used to ______ the subsidiary ledger ______ the Accounts Receivable account. It also ______ the amounts ______ from ______ customers."

question

Sevice Business

answer

A busienss that sells services

question

"Source Documents Input Devices Processors Storage Output Devices"

answer

What are the Accounting System Components?

question

Special Journal

answer

A _______ _______ is used to record only one type of transaction.

question

Special Journal

answer

A journal used to record only one type of transaction

question

Special Journals

answer

_________ _________ are designed as a simple way to record the most frequently occurring transactions. There are four types of Special Journals that are frequently used by merchandising businesses: Sales journals, Cash receipts journals, Purchases journals, and Cash payments journals.

question

Special Journals

answer

"1. Sales Journals 2. Cash Receipts Journals 3. Purchases Journals 4. Cash Payments Journals."

question

States, Cities, Sales Tax, Retailer, Return, Tax Collected, Taxing Authority

answer

"Prepare the state sales tax return. In ______ and ______ that have a ______ ______, the ______ must prepare a sales tax ______ and send the total tax ______ to the taxing ______."

question

"Subsidaiary Ledger is a ledger that contains accounts of a single type. 1) Accounts Receivable Ledger 2) Accounts Payable Ledger"

answer

What is a subsidiarysidiary ledger? Give two examples of subsidiarysidiary ledgers

question

Subsidiary Ledger

answer

A _______ _______ is a ledger that contains accounts of a single type.

question

Subsidiary Ledger

answer

A ledger dedicated to accounts of a single type of showing details to support a general ledger account

question

Subsidiary, Accounts Receivable, Sales, Cash Receipts, General, Allowances, Balance, Each, Known

answer

"Post from the sales journal to the customers' accounts in the accounts receivable subsidiary ledger. The accounts of individual credit customers are kept in a ______ ledger called the ______ ______ ledger. Daily postings are made to this ledger from the ______ journal, the ______ ______ journal, and the ______ journal or the sales returns and ______ journal. The current ______ of a customer's account is computed after ______ posting so that the amount owed is ______ at all times."

question

Trade Discount

answer

A reduction from list price

question

Transactions, General, Accounts, Ledgers, Balance, Subtrracted, Net, Income

answer

"Post sales returns and allowances. Sales returns and allowances ______ must be posted to the ______ ledger and to the appropriate ______ receivable subsidiary ______. The ______ of the Sales Returns and Allowances account is ______ from the balance of the Sales account to show ______ sales on the ______ statement."

question

Transactions, Organize, Reports, results

answer

Accounting Information System collect and process data from _______ and events, _______ them in useful _______ , and communicate _______ to decision makers.

question

True

answer

"In some states, a firm receives a discount for paying the amount of sales tax due on time. True or False"

question

True

answer

"The abbreviation S1 in the Posting Reference column of an account shows that the data was posted from page 1 of the sales journal. True or False"

question

True

answer

"The individual amounts in the Accounts Receivable Debit column of a sales journal should be posted to the accounts receivable subsidiarysidiary ledger, and the column total should be posted to the Accounts Receivable account in the general ledger. True or False"

question

Useful, Understandable, Timely, Pertinent

answer

The relevance principle prescribes that an accounting information system report ________, ________, ________, and ________ information for effective decision making. The system must be designed to capture data that make a difference in decisions. To ensure this, we must consider all decision makers when identifying relevant information for disclosure.

question

Wholesale Business

answer

A business that manufactures or distrubutes goods to retail business or large consumers such as hotels and hospitals and costco

question

Wholesale, Goods, Trade, Percentage Off, List, Mulitply, List, Discount, Compute

answer

"Compute trade discounts. ______ businesses often offer ______ to ______ customers at less than retail prices. Trade discounts are expressed as a ______ ______ the ______ price. ______ the ______ price by the percentage trade ______ offered to ______ the dollar amount."

question

C) No entry should be made, since it is not the end of the quarter. At which point, the entry should be: Debit Prepaid Rent Credit Rent Expense. Remember Prepaid expenses are considered assets

answer

"A company has a lease which requires that it pays its annual office space rent in advance on December 31st 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? A) Debit Prepaid Rent for $10,000, Credit Cash for $10,000 B) Debit Cash for $10,000, Credit Prepaid Rent for $10,000 C) No entry should be made D) Debit Unearned Revenue for $10,000, credit Prepaid Rent for $10,000"

question

C) Debit Depreciation Expense for $2,000 ---- Credit Accumulated Depreciation for $2,000

answer

"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? A) Debit Truck for $10,000 ---- Credit Cash for $10,000 B) Debit Depreciation Expense for $2,000 ---- Credit Cash for $2,000 C) Debit Depreciation Expense for $2,000 ---- Credit Accumulated Depreciation for $2,000 D) Debit Truck for $10,000 ---- Credit Depreciation Expense for $2,000 ---- Credit Accumulated Depreciation for $8,000."

question

A) Supplies Expense

answer

"A company writes a check to purchase printer cartridges. Which account would be debited in the journal entry to record this purchase? A) Supplies Expense B) Accounts Payable C) Office Supplies D) Cash"

question

D) When payment for the good or service has been received

answer

"According to GAAP, when is the earliest instance that revenue should be recorded? A) When the good or service has been provided B) When the good or service has been ordered C) When a down payment has been received D) When payment for the good or service has been received"

question

D) Journalize the Transactions

answer

"After analyzing source documents to determine their effects on the basic accounting equation which step should an accountant perform next? A) Prepare a trial balance B) Post the journal entries C) Prepare T-Accounts D) Journalize the Transactions

question

C) Interpret the financial information

answer

"During which accounting cycle step do managers compare revenues, expenses, and profit from one accounting period to another? A) Analyze the transactions B) Prepare Financial statements C) Interpret the financial information D) Prepare a worksheet"

question

A) -$5,000

answer

"Examination of Company A's finances show assets of $50,000 and owner's equity of $45,000. What are liabilities for company A? A) -$5,000 B) $5,000 C) $95,000 D) $55,000"

question

Objective: Post from the sales journal to the general ledger accounts.

answer

At the end of each month, the sales journal is totaled, proved, and ruled. Column totals are then posted to the general ledger. Using a sales journal rather than a general journal to record sales saves the time and effort of posting individual entries to the general ledger during the month."

question

D) The totals do not match

answer

"The accountant for a firm is preparing the post-closing trial balance and has the following figures which represent all debit & credit accounts • Cash 100,000 • Accounts Receivable 20,000 • Accounts Payable 50,000 • Accumulated Depreciation 20,000 • Prepaid Rent 10,000 • Equipment 40,000 • Firm Capital 100,000 What should the matching totals in the debit & credit columns be when the trial balance is prepared? A) 100,000 B) 150,000 C) 170,000 D) The totals do not match

question

I can't figure it out! Help

answer

"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? A) $7000 Cash payment for property tax to County of Main ---- $700 debit to property tax expense and $700 credit to cash B) $500 cash collection from billed customers ---- $550 debit to cash and $550 credit to accounts receivable C) $600 insurance bill received & paid in the same month ---- $600 debit to insurance expense and $60 credit to cash D) $800 cash refund received for over-payment to a vendor ---- $80 debit to supplies expense and $80 credit to supplies "

question

C) Assets = Liabilities + Owners Equity

answer

"The balance sheet is a reflection of which fundamental accounting equation? A) Revenue + Expenses = Net Income B) Assets + Liabilities = Owners Equity C) Assets = Liabilities + Owners Equity D) Revenue - Expenses = Net Income "

question

B) Prepare the balance sheet C) Prepare the income statement

answer

"The worksheet pulls together certain information. What is this information needed for? (Choose 2 answers) A) Enter correcting entries B) Prepare the balance sheet C) Prepare the income statement D) Prepare the statement of cashflows"

question

A) Debit Cash, Credit Supplies

answer

"Using the cash basis method of accounting, which of the following journal entries would be correct when the company is paying for supplies? A) Debit Cash, Credit Supplies+C112 B) Debit supplies Expense, Credit Cash C) No entry is made D) Debit Supplies, Credit Cash "

question

C) At least one debit entry and at least one credit entry

answer

"What are the key components of every double-entry bookkeeping record? A) One general journal entry and one general ledger entry B) At least one asset entry and at least one liability entry C) At least one debit entry and at least one credit entry D) One revenue account entry and one expense account entry"

question

B) A summary of operations from the point of view of the owner

answer

"What information does an income summary account provide? A) A summary of costs from the point of view of the owner B) A summary of operations from the point of view of the owner C) A summary of revenues from the point of view of the owner D) A summary of liabilities from the point of view of the owner"

question

"Revenue is documented in the credit account on the income statement while expenses are recorded as debits. The balance sheet provides a snapshot of the company's finances. It reports three items: assets, liabilities and owners' equity." A) The balance sheet contains assets, liabilities, and owner's equity and the income statement contains the general ledger

answer

"What information is contained in the balance sheet and the income statement? A) The balance sheet contains assets, liabilities, and owner's equity and the income statement contains the general ledger B) The balance sheet contains the general journal and the income statement contains revenues, expense, and net profit/loss C) The balance sheet contains revenues, expenses, and net profit/loss and the income statement contains assets, liabilities, and owner's equity D) The balance sheet contains assets, liabilities, and the income statement contains revenues expenses and net profit/loss "

question

B) $520

answer

"Equipment costing $13,500 with an estimated salvage value of $1,020 and an estimated life of 4 years was purchased on November 1, 2013. Using the straight-line depreciation method, what is the amount of depreciation expense to be recorded at December 31, 2013? A) $260 B) $520 C) $3,120 D) $1,020"

question

D) the Income Statement Credit column.

answer

"On a worksheet, the adjusted balance of the revenue account Fees Income would be extended to: A) the Income Statement Debit column. B) the Balance Sheet Credit column. C) the Balance Sheet Debit column. D) the Income Statement Credit column."

question

D) the Balance Sheet Credit column.

answer

"On a worksheet, the adjusted balance of the Accumulated Depreciation account is extended to: A) the Income Statement Debit column. B) the Income Statement Credit column. C) the Balance Sheet Debit column. D) the Balance Sheet Credit column."

question

TRUE

answer

"Land is a long-term asset that is not subject to depreciation. True or False "

question

TRUE

answer

"If an adjustment is not recorded for supplies used, the firm's assets will be overstated. True or False"

question

C) will be reported on the Balance Sheet.

answer

"The balance in the account Accumulated Depreciation, Equipment will A) be reported on the Income Statement. B) be reported on the Statement of Owner's Equity. C) will be reported on the Balance Sheet. D) not appear on any financial statement."

question

B) The cost of supplies used represents an operating expense of the business.

answer

"Which of the following statements is correct? A) The cost of supplies used is reported on the statement of owner's equity. B) The cost of supplies used represents an operating expense of the business. C) Accumulated Depreciation--Equipment is presented in the Liabilities section of a balance sheet. D) At the time of their acquisition, prepaid expenses are recorded in expense accounts."

question

Straight-Line Depreciation

answer

Depreciation = (Cost)/(Useful Life Years)/(Months)

question

B) recorded in the Balance Sheet Debit column.

answer

"On a worksheet, a net loss is A) recorded in the Income Statement Debit column. B) recorded in the Balance Sheet Debit column. C) recorded in the Balance Sheet Credit column. D) not recorded."

question

FALSE

answer

"The normal balance of a contra asset account is a debit. True or False"

question

B) Needed For Expenses That Were Paid For Before Or After They

answer

"Adjusting Entries are A) Corrections Of Errors. B) Needed For Expenses That Were Paid For Before Or After They Were Used. C) Not Required. D) Will Always Affect Cash."

question

B) Will Be Understated.

answer

"If long-term assets are not adjusted, expenses on the income statement A) Will Be Overstated. B) Will Be Understated. C) Will Not Be Affected. D) May Be Either Overstated Or Understated."

question

D) the Balance Sheet Credit column.

answer

"On a worksheet, the adjusted balance of the Accumulated Depreciation account is extended to: A) the Income Statement Debit column. B) the Income Statement Credit column. C) the Balance Sheet Debit column. D) the Balance Sheet Credit column."

question

C) A Contra Asset On The Balance Sheet

answer

"Accumulated Depreciation, Equipment, is shown as: A) A Liability On The Balance Sheet B) A Reduction Of Capital On The Statement Of Owner's Equity C) A Contra Asset On The Balance Sheet D) An Expense On The Income Statement"

question

A) As A Deduction From The Cost Of The Equipment.

answer

"On a balance sheet, Accumulated Depreciation—Equipment is reported A) As A Deduction From The Cost Of The Equipment. B) As A Liability. C) As An Expense. D) As A Deduction From The Total Of The Assets"

question

TRUE

answer

"The temporary owner's equity accounts are closed because they apply to only one accounting period. True or False "

question

B) At the end of each accounting period, asset and liability account balances are reduced to zero.

answer

"Which of the following statements is not correct? A) After closing entries are posted, the revenue, expense, and drawing accounts will have zero balances. B) At the end of each accounting period, asset and liability account balances are reduced to zero. C) A postclosing trial balance will not contain revenue and expense account balances. D) Adjusting entries must be journalized and posted before the closing entries are journalized and posted."

question

B) At the end of each accounting period, asset and liability account balances are reduced to zero.

answer

"Which of the following statements is not correct? A) After closing entries are posted, the revenue, expense, and drawing accounts will have zero balances. B) At the end of each accounting period, asset and liability account balances are reduced to zero. C) A postclosing trial balance will not contain revenue and expense account balances. D) Adjusting entries must be journalized and posted before the closing entries are journalized and posted."

question

A) transfer the results of operations to owner's equity.

answer

"One purpose of closing entries is to A) transfer the results of operations to owner's equity. B) reduce the owner's capital account balance to zero so that the account is ready for the next period. C) adjust the ledger account balances to provide complete and accurate figures for use on financial statements. D) close all accounts so that the ledger is ready for the next accounting period."

question

A) Supplies

answer

"Which of the following accounts is a permanent account? A) Supplies B) Supplies Expense C) Owner's drawing D) Fees Income"

question

TRUE

answer

"The heading ""Closing Entries"" is usually written in the Description column of the general journal above the first closing entry. True or False"

question

A) the Income Summary account and a credit to the Depreciation Expense account.

answer

"The entry to close the Depreciation Expense account would include a debit to A) the Income Summary account and a credit to the Depreciation Expense account. B) the Income Summary and a credit to Cash. C) Cash and a credit to the Income Summary account. D) the Depreciation Expense account and a credit to the Income Summary account."

question

C) Supplies Expense

answer

"Which of the following accounts would be closed? A) Accounts Receivable B) Accumulated Depreciation C) Supplies Expense D) Joan Wilson, Capital"

question

TRUE

answer

"""Closing"" is written in the Description column of the individual revenue and expense accounts in the general ledger. True or False"

question

Closing Entries

answer

Journal entries that transfer the results of operations (net income or net loss) to owner's equity and reduced the revenue, expense, and drawing account balances to zero.

question

Income Summary Account

answer

A pecial owner's equity account that is used only in the closing process to summarize the results of operations

question

Interpret

answer

To understand and explain the meaning and importance of something (such as financial statements)

question

Postclosing Trial Balance

answer

A statement that is prepared to prove the equality of total debits and credits after the closing process is completed.

question

The worksheet is only a tool that aids in the preparation of financial statements. Any changes in account balances recorded on the worksheet are not shown in the general journal and the general ledger until the adjusting entries have been journalized and posted

answer

Why is it necessary to journalize and post adjusting entries even though the data are already recorded on the worksheet?

question

"(a) Beginning owner's equity. (b) Net income or net loss for the period. (c) Additional investments by the owner for the period. (d) Withdrawals by the owner for the period. (e) Ending balance of owner's equity."

answer

What amounts appear on the statement of owner's equity?

question

On a report form balance sheet, the liabilities and owner's equity are listed under the assets. On the account form, they are listed to the right of the assets.

answer

What is the difference between a report form balance sheet and an account form balance sheet?

question

B) contra asset account.

answer

"Accumulated Depreciation—Equipment is a(n): A) asset account. B) contra asset account. C) liability account. D) contra liability account."

question

B) Balance Sheet Debit column.

answer

"On a worksheet, the adjusted balance of the Supplies account is extended to the: A) Income Statement Debit column. B) Balance Sheet Debit column. C) Income Statement Credit column. D) Balance Sheet Credit column."

question

$28,000. The adjustment for equipment depreciation is a debit to Depreciation Expense and a credit to Accumulated Depreciation-Equipment. The Equipment account is not changed.

answer

Willis Repair Shop purchased equipment for $28,000. Depreciation Expense for the month is $500. What is the balance of the Equipment account after posting the depreciation entry? Why?

question

Complete a trial balance on a worksheet

answer

A worksheet is normally used to save time in preparing the financial statements. Preparation of the worksheet is the fourth step in the accounting cycle. The trial balance is the first section of the worksheet to be prepared.

question

Prepare adjustements for unrecordded business transactions

answer

Some changes arise from the internal operations of the firm itself. Adjusting entries are made to record these changes. Any adjustments to account balances should be entered in the Adjustments section of the worksheet.

question

Complete the worksheet

answer

An adjusted trial balance is prepared to prove the equality of the debits and credits after adjustments have been entered on the worksheet. Once the Debit and Credit columns have been totaled and ruled, the Income Statement and Balance Sheet columns of the worksheet are completed. The net income or net loss for the period is determined, and the worksheet is completed.

question

" Prepare an income statement, statement of owner's equity, and balance sheet from the completed worksheet."

answer

All figures needed to prepare the financial statements are properly reflected on the completed worksheet. The accounts are arranged in the order in which they must appear on the income statement and balance sheet. Preparation of the financial statements is the fifth step of the accounting cycle.

question

Journalize & post the adjusting entries

answer

" Journalize and post the adjusting entries. After the financial statements have been prepared, the accountant must make permanent entries in the accounting records for the adjustments shown on the worksheet. The adjusting entries are then posted to the general ledger. Journalizing and posting the adjusting entries is the sixth step in the accounting cycle."

question

Steps of Accounting Cycle

answer

"1. Analyze transactions. 2. Journalize transactions. 3. Post the journal entries. 4. Prepare a worksheet. 5. Prepare financial statements. 6. Record adjusting entries."

question

"1. Analyze transactions. 2. Journalize transactions. 3. Post the journal entries. 4. Prepare a worksheet. 5. Prepare financial statements. 6. Record adjusting entries."

answer

What are the steps of the Accounting Cycle?

question

Debit column of the Balance Sheet section.

answer

The Drawing account is extended to which column of the worksheet?

question

Credit Balance

answer

Is the normal balance for Accumulated Depreciation a debit or credit balance?

question

Net income causes a net increase in owner's equity.

answer

Why is the net income for a period recorded in the Balance Sheet section of the worksheet as well as the Income Statement section?

question

$4,250. Debit column of the Balance Sheet section.

answer

The Supplies account has a debit balance of $6,000 in the Trial Balance column. The Credit column in the Adjustments section is $1,750. What is the new balance? The new balance will be extended to which column of the worksheet?

question

To allocate the cost of the asset to operations during its expected useful life.

answer

Why are assets depreciated?

question

Identifying ; analyzing transactions ; events

answer

What is the first step in the accounting process?

question

Recording in the Journals

answer

What is the next step in the accounting process after 1st Step Identifying ; analyzing transactions ; events?

question

Posting to the Ledger

answer

What is the next step in the accounting process after Step 2-Recording in the Journals?

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Unadjusted Trial Blance

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What is the next step in the accounting process after Step 3-Posting to the Ledger?

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Adjusting Entries

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What is the next step in the accounting process after Step 4-Unadjusted Trial Blance?

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Adjusted Trial Balance

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What is the next step in the accounting process after Step 5-Adjusting Entries?

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Financial Statements

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What is the next step in the accounting process after Step 6-Adjusted Trial Balance?

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Closing Entries

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What is the next step in the accounting process after Step 7-Financial Statements?

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Post-Closing Trial Balance

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What is the next step in the accounting process after Step 8-Closing Entries?

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Optional Double Check - Go backwards

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What is the next step in the accounting process after Step 9-Post-Closing Trial Balance?

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