Accounting 101 Final example #23894

Managerial accounting provides information to:

The field of accounting that focuses on providing information for external decision makers is:

____ are professional accountants who serve the general public, not one particular company

Which of the following organizations is responsible for the creation and governance of accounting standards in the United States?

GAAP refers to guidelines for accounting information in the United States. The acronym GAAP in this statement refers to:

Corporations pay their own income tax on corporate income. Stockholders pay personal income tax on the dividends received from corporations. This is an example of:

According to the _____, acquired assets should be recorded at the amount actually paid rather than the estimated market value.

As per the _____, the entity will remain in operation for the foreseeable future.

Which of the following is the correct accounting equation?

The equity of Alliance company is $170,000, and the total liabilities are $30,000. The total assets are:

Spring company has assets and equity that amount to $220,000 and $20,000, respectively. Liabilities total ____.

The assets of Star Company are $120,000 and the total liabilities are $10,000. The equity is _____.

The economic resources of a business such as furniture, building, and land are its ___

A debt that a business owes is called ___

Maxwell Plumbing Services earned $500 by completing a job for Smith Company. The $500 earned by Maxwell Plumbing services is its ____

Which of the following events is NOT recorded by accountants?

Mars Electronic Company receives cash from a stockholder, John Tilden, and issues common stock to him. The two accounts involved in this transaction are:

____ represent the right to receive cash in the future from customers for goods sold or services performed.

____ represents a short-term liability created by purchasing "on account"

Which of the following is the correct order of preparation of financial statements?

Which of the following financial statements reports expenses in decreasing order of their amounts, by stating the largest expense first?

The amount of net income is transferred from ____ to ____.

which of the following appears on both the income statement and statement of retained earnings?

which of the following financial statements shows the dividends distributed to stockholders?

Which of the following is included on the balance sheet?

which financial statement includes a specific date in its heading?

which of the following financial statements reports that total assets are equal to total liabilities plus total stockholders equity?

which of the following appears on both the statement of retained earnings and the balance sheet?

financial statements are prepared after an entity's transactions are analyzed and recorded. which of the following reports is one of the financial statements: a. statement of return on assets b. statement of dividends c. statement of cash flows d. expense statement

which of the following financial statements reports cash receipts and cash payments during a period of time? a. cash receipts budget b. statement of cash flows c. statement of retained earnings d. balance sheet

which of the following financial statements is used to report cash receipts for services provided?

the account title used for recording the payment of rent in advance for an office building is:

the account title used for recording a written promise that a customer will pay the business a fixed amount of money and interest by a certain date in the future is ____

which of the following is an asset account? a. wages payable b. notes payable c. accounts receivable d. unearned revenue

which of the following accounts is an asset? a. prepaid expense b. salaries expense c. service revenue d. accounts payable

____ represents a debt owed for renting a building.

which of the following is a liability account? a. unearned rent b. prepaid advertising c. building d. cash

which of the following is a liability account? a. accounts payable b. salaries expense c. prepaid expense d. service revenue

Saturn, Inc. paid the rent for the current month in cash. Which of the following accounts will be used to record the transaction? a. rent expense b. prepaid rent c. rent revenue d. rent payable

amounts earned from delivering goods services to customers are called

which of the following is provided in a typical chart of accounts? a. account balance b. transaction amounts c. account number d. dates of transactions

A listing of all accounts in numerical is called a(n)

Regarding T-accounts, which of the following statements is correct?

Which of the following accounts decreases with a debit? a. notes payable b. rent expense c. accounts receivable d. cash

Which of the following accounts increases with a credit? a. dividends b. prepaid expense c. common stock d. accounts receivable

which of the following accounts decreases with a credit? a. unearned revenue b. accounts payable c. cash d. common stock

which of the following accounts increases with a debit? a. accounts payable b. common stock c. interest payable d. prepaid rent

which one of the following account groups will decrease with a debit? a. revenues and expenses b. assets and liabilities c. liabilities and revenues d. assets and expenses

which one of the following account groups normally has a debit balance? a. liabilities and revenues b. assets and liabilities c. liabilities and revenues d. assets and expenses

which one of the following account groups normally has a debit balance? a. revenues and expenses b. assets and expenses c. liabilities and revenues d. assets and liabilities

The accounting process of transferring data from the journal to the ledger is called ___

which of the following is used by both internal and external users?

Which of the following statements is true of a trial balance? a. a trial balance presents data in a credit and debit format b. a trial balance has the same format as a balance sheet c. a trial balance shows the total amounts of assets and liabilities, but not equity d. a trial balance is prepared after the balance sheet

which of the following sequences states the order in which accounts are listed on a trial balance?

which of the following statements is true of a trial balance? a. a trial balance is also known as a balance sheet b. a trial balance is the first step in the accounting cycle c. a trial balance is a list of all accounts with their balances d. a trial balance is also known as a chart of accounts

which of the following is a financial statement that presents a business's accounting equation?

The following are the current month's balances for selected accounts of Sandlin Marketing Company. What is the net income for Sandlin marketing for the current month? revenue- 8,000 expenses- 1,100

If a company is using accrual basis accounting, when should it record revenue?

When does a company account for revenue if it uses cash basis accounting?

which of the following statements is true of accrual basis accounting?

Which of the following is considered a fiscal year?

which of the following accounting terms assumes that a business's activities can be divided into small segments and financial statements can be prepared for specific periods, such as a month, quarter, or year.

the revenue recognition principle guides accountants in:

an adjusting entry is completed:

Dynamic Services, Inc. purchased computers that are to be used in its consulting services. Based on the matching principle, the related account that should appear on the income statement for the year ended December 31. 2018 is:

Princeton financial services, Inc. purchased computers that are to be used in its consulting services. based on the matching principle, what account, other than computers, should appear on the balance sheet as of December 31, 2018?

the entry needed to record depreciation includes a debit to the ___ account.

The entry to record depreciation includes a credit to the ___ account.

The expected value of a depreciable asset at the end of its useful life is called:

a depreciable asset's cost minus accumulated depreciation is called:

which of the following is the correct formula for calculating depreciation under the straight-line method?

Which of the following is a contra account?

the accumulated depreciation account is:

Accumulated depreciation is a(n) ___ account and carries a normal ___ balance

what type of account is Prepaid rent, and what is its normal balance?

what is the term used for the difference between the equipment account and the accumulated depreciation- equipment account?

unearned revenue is classified as a(n) ___ account

unearned revenue is a(n) ___ account and carries a normal ___ balance

a company received 5,000 for 100 one-year subscriptions on July 1. The journal entry to record this cash receipt would include a ___. The company uses a liability account for revenue received in advance.

the employees of sinclair services inc. worked the last two weeks of december. they received their paychecks on Janurary 2. which of the following accounts should appear on the balance sheet as of December 31?

financial statements are prepared from the balances in a(n)

which financial statement is prepared last? a. balance sheet b. statement of retained earnings c. income statement d. the financial statements can be prepared in any order

The financial statement that report assets liabilities, and stockholders equity as of the last day of the period is called the ___

the financial statements are prepared from the ___

Assets that are expected to be converted to cash, sold, or used up during the next 12 months, or within the normal operation cycle if the cycle is longer than a year are called ___ assets.

all assets that will not be converted to cash or used up within the business's operation cycle or one year, whichever is greater are called:

property, land, and equipment are:

patents, copyrights, and trademarks are examples of:

Salaries payable, accounts payable, and unearned revenue are examples of:

which of the following is a measure of how quickly an item can be converted into cash?

which of the following is the most liquid asset?

which of the following is a current asset that is expected to be converted into cash, sold, or consumed during the next year (or the normal operating cycle, if longer) a. building b. equipment c. land d. accounts receivable

under which of the following categories would accounts payable appear?

notes payable due within two years are classified as:

assets with no physical form are:

which of the following is an example of an intangible asset?

buildings, land, and equipment are classified as:

liquidity is a measure of:

regarding a classified balance sheet, which of the following statements are correct? a. assets are listed in alphabetical order b. account balances are listed from highest to lowest amount c. assets are listed in order of their liquidity d. accounts are classified by their purchase dates

an account that is not closed at the end of the period is called:

the entries that transfer the revenue, expense, and dividends balances to the retained earnings account to prepare the companies books for the next period are called ___ entries

revenues and expenses may be transferred to the ___ account before their final transfer to the retained earnings account

which of the following is a permanent account? a. service revenue b. wages expense c. salaries payable d. utilities expense

which of the following are temporary accounts that are closed at the end of the year?

to which of the following accounts should the balance in the income summary account be closed?

which of the following accounts will have an ending balance after the closing process is complete? a. accumulated depreciation b. service revenue c. dividends d. rent expense

which of the following are NOT included in a post-closing trial balance? a. retained earnings and assets b. common stock and liabilities c. revenues and expenses d. assets and liabilities

a list of the accounts and their balances at the end of the period, after journalizing and posting the closing entries is called ___

which of the following accounts will not be included in a post-closing trial balance a. common stock b. salaries expense c. supplies expense d. dividends

closing entries are journalized and posted when?

which of the following line items will appear on the income statement of a merchandiser but not of a service company? a. salaries expense b. depreciation expense c. supplies inventory d. cost of goods sold

gross profit is calculated as the difference between sales revenue and:

the main expense of a merchandiser is usually

operating expenses include:

merchandise inventory accounting systems can be broadly categorized into two types. they are:

which of the following entries would be made to record the purchase of inventory on account, if a company uses the perpetual inventory system? a. debit to accts payable and credit to merch inventory b. debit to merch inventory and credit to accts payable c. debit to accts payable and credit to purchases d. debit to purchases adn credit to accts payable

what does 2/10 mean, with respect to "credit terms of 2/10, n/30?

an invoice of 600 for merchandise purchased is showing 2/15, n/30 as terms of credit. if the invoice is paid on or before the 15th day after the invoice date. the amount to be paid is:

on january 21, 2019, Cresent inc. received merchandise from neptune Inc. On that date, cressent found a few of these goods to be damaged. On january 22, Cressent returned thes damaged goods to the seller. Such returns will be treated as ___ by Cressent.

if goods are sold on terms FOB shipping point, the

the merchandise inventory account balance is 52,000. A physical count of inventory reveals the actual inventory balance is 41,000. Which of the following would be included in the adjusting entry? (perpetual) a. 52,000 debit to COGS b. 41,000 credit to merch inventory c. 11,000 credit to merch inventory d. 11,000 credit to COGS

which of the following is subtracted from net sales revenue to arrive at gross profit on a multi-step income statement a. sales discounts b. selling expense c. cost of goods sold d. all of the above

Which of the following is the correct order of subtotals that appear on a multi-step income statement? a. gross profit, operation income, net income b. net income, operating income, net income c. operating income, gross profit, net income d. gross profit, net sales revenue, net income

net sales revenue is calculated by

which of the following states that the business should use the same accounting methods from period to period?

which of the following states that a company must perform strictly proper accounting only for items that are significant to the business's financial statements?

a company decides to ignore a very small error in its inventory balance. This is an example of the application of the ___

changing the method of valuing inventory ignores the principle of:

which of the following principles states that a business's financial statements must report enough information for outsiders to make knowledgeable decisions about the company

the goal of reporting realistic and never overstating assets or net income applies to the ___

the tracking of inventory shrinkage due to theft, damage, or errors done with the help of a(n) ___ of inventory

which of the following inventory valuation methods should be used for unique items

which of the following inventory costing methods requires the calculation of a new average cost after each purchase?

which of the following assets may be reported at the lower-of-cost-or-market value?

which of the following amounts would be reported as merchandise inventory on the balance sheet of a company if the cost of an item is 110 and the current replacement cost is 70

which of the following is true of internal control? a. internal controls are only necessary for public companies b. one of the major purposes of internal control is to ensure that the assets are safeguarded c. internal control procedures tend to diminish the importance of operational efficiency d. a company's outside auditor is responsible for the company's internal control system

which of the following is an objective of internal control? a. to guarantee that a business makes a profit b. to ensure timely collection of accounts receivable c. to ensure timely payment of accounts payable d. to encourage employees to follow company policies

two or more people working together to circumvent internal controls and defraud a company is known as

a company which sells merchandise or services can receive cash from customers a. through the mail b. by electronic funds transfer c. over the counter d. in any of the above forms

which of the following is described as a system where customers send their checks directly to a post office box that belongs to the bank

a company check for payment must be signed by

which is the most liquid form of an asset?

A way to account for petty cash by maintaining a constant balance in the petty cash account and which at any time requires that cash plus petty cash tickets must total the amount allocated to the petty cash fund, is known as the

the petty cash fund had an initial imprest balance of 230. It currently has 15 in cash, 3 in miscellanious petty cash tickets, and an additional 207 in specific petty cash tickets. The debit to cash short & over would be ___

which of the following is true of a signature card?

when a check is issued, the party who is paying the cash is referred to as the ___

the bank's routing number:

a ___ is a document explaining the reasons for the differences between a depositor's cash account in the ledger and the depositor's cash balance in its bank account

which of the following statements is true? a. accounts receivable are liabilities b. accounts receivable are more liquid than cash c. notes receivable usually have longer collection terms than accounts receivable d. notes receivable are always classified as current assets

notes receivable___ a. are supported by a promissory note b. are included in a misc. category called other receivables c. represent an oral promise to pay amount + principle d. are due within 12 months or operating cycle

which of the following would be classified as a long-term asset? a. interest receivable b. notes receivable, due in 5 years c. accounts receivable d. cash equivalents

which of the following is a disadvantage when a business accepts debit or credit cards from customers?

the two methods of accounting for uncollectible accounts receivable are

under the direct write-off method, the entry to write off an uncollectible amount will include

for a company with significant uncollectible receivables, the direct write-off method is unsuitable because:

which of the following statements is true of the direct write-off method? a. it provides better matching of revenues with expenses b. it is only suitable for small companies with very few uncollectible receivables c. GAAP requires public companies to follow the direct write-off method d. it results in more accurate net income than any other method

which of the following is true of the balance sheet presentation of the allowance for bad debts? a. it is reported as a separate, independent line item under assets b. it is reported as a current liability c. it is shown as a contra account related to accts receivable d. it is reported as an operating expense

The allowance for bad debts account a. increases with a debit b. is added to accts receivable c. holds the pool of unknown uncollectible accts d. is a liability account

two methods of estimating uncollectible receivables are:

GAAP requires companies to___ method to record bad debts expense

Under GAAP, which of the following is NOT an acceptable method of estimating the amount of bad debt expense at the end of the accounting period?

when comparing the direct write-off and allowance methods, the major difference is

A company issues a 120-day 14% note for 16,000. What is the principle amount of the note?

on july 7, A-1 credit union loaned 440,000 to bridal retail shop on a 90 day, 8% note. what is the maturity date of the note?

On august 14, second street bank lent 210,000 to city restuarant on a 75 day 4% note. what is the maturity date on the note?

The maturity date for a 6 month note issued on january 15 would be

on july 7, university bank leny 560,000 to jazz music shop on a 60 day 7% note. What is the maturity value of the note?

The maturity value of a note is the ___

which of the following is included in the cost of a plant asset

masonry construction group paid 10,000 for a plant asset that had a market value of 14,500. at which of the following amounts should the plant asset be recorded?

which of the following is included in the cost of land? a. outdoor lighting b. fencing c. paving d. brokerage comission

which of the following asset categories would include the cost of clearing land and removing unwanted buildings? a. land improvements b. buildings c. machinery and equipment d. land

which of the following should be included in the cost of land? a. installing fences b. build sidewalks c. clear land of old buildings d. installing signage

which of the following should NOT be included in the cost of a building? a. contractor charges b. fencing c. building permits d. installing garage

freeman, inc. owns a delivery truck. which of the following costs will be capitalized and depreciated? a. normal engine repair b. replacement of tires c. modification for new use d. oil change and lubrication

westin delivery service Inc. owns a delivery truck. which costs will be treated as a revenue expenditure? a. modification for new use b. oil change adn lubrication c. addition to storage capacity d. major engine overhaul

an asset is considered to be obsolete

the expected value of an asset at the end of its useful life is known as

which of the following depreciation methods allocate a varying amount of depreciation to expense each year based on asset's usage?

which of the following depreciation methods always allocates a higher amount of depreciation in earlier years than later years?

on january 1, 2018, jordan inc. acquired a machine for 1,100,000. the estimated full useful life of the asset is 5 years. residual value at the end of 5 years is expected to be 61,000. calculate the depreciation expense per year using the straight-line method

when a plant asset is disposed, a business must a. bring the depreciation up to date b. ensure the plant asset is obsolete or worn out c. comply with conservation principle and record losses but not gains d. immediately replace it

a photocopier costs 105,000 when new and has accumulated depreciation of 96000. If the business discards the plant asset, the result is:

which of the following is an expense that results from the usage of a natural resource

a coal mine cost 1,001,000 and is estimated to hold 58,000 tons of coal. there is no residual value. during the first year of operations, 5000 tons are extracted and sold. Calculate depletion per unit

which of the following is an intangible asset?

businesses record goodwill

which of the following items should be amortized?

which of the following accounting methods is generally sed to compute amortization expense?

which of the following is true of goodwill

which of the following is an intangible asset