The classification and normal balance of the accounts payable account is
a liability with a credit balance
In which of the following types of accounts are increases recorded by credits?
Which of the following entries records the acquisition of office supplies on account?
Office Supplies, debit; Accounts Payable, credit
The business entity concept means that
the entity is an individual economic unit for which data are recorded, analyzed, and reported
Select the type of business that is most likely to obtain large amounts of resources by issuing stock.
Two common areas of accounting that respectively provide information to internal and external users are
managerial accounting and financial accounting
If stockholders wanted to know how money flowed into and out of the company, what financial statement would they use?
statement of cash flows
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)
The objectivity concept requires that
amounts recorded in the financial statements must be based on independently verifiable evidence
Which of the following is not a characteristic of a corporation?
A corporation's resources are limited to its individual owners' resources.
Which of the following best describes accounting?
is an information system that provides reports to users regarding economic activities and condition of a business.
A financial statement user would determine if a company was profitable or not during a specific period of time by reviewing
the income statement
The debt created by a business when it makes a purchase on account is referred to as an
The arrangements between buyer and seller as to when payments for merchandise are to be made are called
Office salaries, depreciation of office equipment, and office supplies are examples of what type of expense?
The inventory system employing accounting records that continuously disclose the amount of inventory is called
The term "inventory" can indicate
merchandise held for sale in the normal course of business
When comparing a retail business to a service business, the financial statement that changes the most is the
If the buyer is to pay the freight costs of delivering merchandise, delivery terms are stated as
FOB shipping point
If merchandise sold on account is returned to the seller, the seller may inform the customer of the details by issuing a
Expenses that are incurred directly or entirely in connection with the sale of merchandise are classified as
Which of the following accounts will only be found in the chart of accounts of a merchandising company?
Control of inventory should begin as soon as the inventory is received. Which of the following internal control steps is not done to meet this goal?
check the invoice with the person who specifically purchased the item
Under a perpetual inventory system, the amount of each type of merchandise on hand is available in the
When merchandise sold is assumed to be in the order in which the purchases were made, the company is using
If a manufacturer ships merchandise to a retailer on consignment, the unsold merchandise should be included in the inventory of the
Damaged merchandise that can be sold only at prices below cost should be valued at
net realizable value
The method of computing inventory that uses records of the selling prices of the merchandise is called
Which of the following companies would be more likely to use the specific identification inventory costing method?
Which of the following is not an example for safeguarding inventory?
Returning inventory that is defective or broken.
Under the _________ inventory method, accounting records maintain a continuously updated inventory value.