Accounting I Final Exam

The accounting equation may be expressed as

Transactions affecting owner's equity include

Which of the following is not a business transaction? receive cash for services to be rendered later make a sales offer sell goods for cash pay for supplies

Which of the following is not a business transaction? Erin deposits $15,000 in a bank account in the name of Erin's Lawn Service. Erin pays her monthly personal credit card bill. Erin purchased hedge trimmers for her lawn service agreeing to pay the supplier next month. Erin provided services to customers earning fees of $600.

Which of the following is a business transaction? purchase inventory on account plan advertising for upcoming sale submit estimate for construction project give employees a raise beginning next month

The financial statement that presents a summary of the revenues and expenses of a business for a specific period of time, such as a month or year, is called a(n)

Which of the following financial statements reports information as of a specific date? statement of cash flows income statement balance sheet statement of owner's equity

Four financial statements are usually prepared for a business. The statement of cash flows is usually prepared last. The statement of owner's equity (OE), the balance sheet (B), and the income statement (I) are prepared in a certain order to obtain information needed for the next statement. In what order are these three statements prepared?

The year-end balance of the owner's capital account appears in

Which of the following applications of the rules of debit and credit is true? increase Accounts Payable with a credit and the normal balance is a debit decrease Cash with a debit and the normal balance is a credit decrease Prepaid Insurance with a credit and the normal balance is a credit increase Equipment with a debit and the normal balance is a debit

The process of initially recording a business transaction is called

Which of the following is not a correct rule of debits and credits? Liabilities, revenues, and owner's equity are increased by credits. Assets are decreased by credits and have a normal debit balance. Assets, expenses, and withdrawals are increased by debits. The normal balance for revenues and expenses is a credit.

The ____ is where a transaction can first be found in the accounting records.

The process of recording a transaction in the journal is called

Which of the following is not true with a double-entry accounting system? Each business transaction will have two debits. Every transaction affects at least two accounts. The accounting equation remains in balance. The sum of all debits is always equal to the sum of all credits in each journal entry.

The process of transferring the debits and credits from the journal entries to the accounts is called

A trial balance is prepared to

The revenue recognition concept

The matching concept

Using accrual accounting, revenue is recorded and reported only

Using accrual accounting, expenses are recorded and reported only

Prior to the adjusting process, accrued expenses have

Prior to the adjusting process, accrued revenue has

Deferred expenses is

Deferred revenue is revenue that is

Adjusting entries are

Adjusting entries affect at least one

Generally accepted accounting principles require that companies use the ____ of accounting.

Adjusting entries always include

Which of the following is considered to be unearned revenue? theater tickets sold last month for yesterday's performance theater tickets that were not sold for the current performance theater tickets sold for next month's performance theater tickets sold yesterday on credit for yesterday's performance

Which of the following is an example of accrued revenue? snow removal services that have been provided but have not been billed or paid snow removal services that have been paid for three months in advance snow removal services that has been provided and paid on the same day an agreement that has been signed for snow removal services for the next three months

Which of the following is considered to be an accrued expense? a computer technician has just signed an agreement with you regarding pricing for future work a computer technician has installed the latest software updates, but you have not received an invoice or made payment a computer technician has installed the latest software updates and was paid on the same day a computer technician has been paid in advance to install software updates as they become available

Which account would normally not require an adjusting entry? Cash Accumulated Depreciation Wages Expense Accounts Receivable

Which one of the accounts below would likely be included in an accrual adjusting entry? Insurance Expense Interest Expense Unearned Rent Prepaid Rent

Which of the following accounts would likely be included in a deferral adjusting entry? Interest Revenue Unearned Revenue Salaries Payable Accounts Receivable

Notes receivable due in 390 days appear on the

The balance sheet should be prepared

The classified balance sheet will show which asset subsections?

The post-closing trial balance differs from the adjusted trial balance in that it does not take into account closing entries include balance sheet accounts take into account adjusting entries include income statement accounts

A summary of selected ledger accounts appear below for Alberto's Plumbing Services for the current calendar year-end.

The phase of accounting system installation in which the information needs of people in the organization are taken into account is

The subsidiary ledger that includes customer account activity is called the

At the end of the month, the total of the amount column of the revenue journal is posted as a

Which of the following is recorded in the cash receipts journal?

Some of the more common subsidiary ledgers are

Which of the following is not considered a special journal? purchases journal cash payments journal general journal cash receipts journal

What is the term applied to the excess of net revenue from sales over the cost of merchandise sold?

The primary difference between a periodic and perpetual inventory system is that a

Pierce Company sold to Stanton Company merchandise on account FOB shipping point, 2/10, net 30, for $20,000. Pierce prepaid the $500 shipping charge. Which of the following entries does Pierce make to record this sale?

Who is responsible for the freight costs when the terms are FOB shipping point?

The Corbit Corp. sold merchandise for $10,000 cash. The cost of the merchandise sold was $7,590. The journal entries to record this transaction under the perpetual inventory system would be

The primary objectives of control over inventory are

The inventory method that assigns the most recent costs to cost of merchandise sold is

When using a perpetual inventory system, the journal entry to record the cost of merchandise sold is:

What is the major difference between the unadjusted trial balance and the adjusted trial balance?

When does an account become uncollectible?

If the direct write-off method of accounting for uncollectible receivables is used, what general ledger account is credited to write off a customer's account as uncollectible?

Other receivables includes all of the following except taxes receivable interest receivable notes receivable receivables from employees

Notes or accounts receivables that result from sales transactions are often called

The direct write-off method of accounting for uncollectible accounts

The Lowery Co. uses the direct write-off method of accounting for uncollectible accounts receivable. Lowery has a customer whose accounts receivable balance has been determined to likely be uncollectible. The entry to write off this account would be which of the following?

If the direct write-off method of accounting for uncollectible receivables is used, what general ledger account is debited to write off a customer's account as uncollectible?

If the allowance method of accounting for uncollectible receivables is used, what general ledger account is debited to write off a customer's account as uncollectible?

On the balance sheet, the amount shown for the Allowance for Doubtful Accounts is equal to the

A debit balance in the Allowance for Doubtful Accounts

The collection of an account that had been previously written off under the allowance method of accounting for uncollectibles

A 60-day, 9% note for $10,000, dated May 1, is received from a customer on account. The maturity value of the note is

A characteristic of a fixed asset is that it is

Which of the following should be included in the acquisition cost of a piece of equipment? testing costs prior to placing the equipment into production installation costs transportation costs All of these choices are correct.

Accumulated Depreciation

Expenditures that add to the utility of fixed assets for more than one accounting period are

A fixed asset's estimated value at the time it is to be retired from service is called

The most widely used depreciation method is

The depreciation method that does not use residual value in calculating the first year's depreciation expense is

Expected useful life is

The calculation for annual depreciation using the units-of-output method is

The accumulated depletion account is

The process of transferring the cost of metal ores and other minerals removed from the earth to an expense account is called

The term applied to the amount of cost to transfer to expense resulting from a decline in the utility of intangible assets is

On June 8, Smith Technologies issued a $75,000, 6%, 140-day note payable to Johnson Company. What is the due date of the note?

On June 8, Williams Company issued an $80,000, 5%, 120-day note payable to Brown Industries. Assuming a 360-day year, what is the maturity value of the note?

When a borrower receives the face amount of a discounted note less the discount, the amount is known as

Assuming a 360-day year, the interest charged by the bank, at the rate of 6%, on a 90-day, discounted note payable of $100,000 is

Assuming a 360-day year, when a $50,000, 90-day, 9% interest-bearing note payable matures, total payment will be

Which of the following are criteria for determining whether to record an asset as a fixed asset? must be long lived and used by the company in its normal operations must be short lived and tangible must be an investment and long lived must be tangible and an investment

Anderson Co. issued a $50,000, 60-day, discounted note to National Bank. The discount rate is 6%. At maturity, assuming a 360-day year, the borrower will pay

The current portion of long-term debt should

The amount of federal income taxes withheld from an employee's gross pay is recorded as a(n)

Which of the following taxes would be deducted in determining an employee's net pay? FICA taxes FUTA taxes SUTA taxes All of these choices are correct.

Which of the following taxes are employers required to withhold from employees? FICA tax federal unemployment tax state unemployment tax FICA tax, state, and federal unemployment tax

Which of the following will have no effect on an employee's take-home pay? unemployment tax social security tax number of exemptions claimed marital status

Which of the following are included in the employer's payroll taxes? social security taxes all are included in employer taxes SUTA taxes FUTA taxes

Which of the following is required to be withheld from employee's gross pay? only state unemployment compensation tax only federal unemployment compensation tax only federal income tax both federal and state unemployment compensation taxes

Payroll entries are made with data from the