Accounting Final

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Sales Tax Payable

Credit

Merchandise Inventory

Debit

Delivery Expense

Debit

Cost of Merchandise Sold

Debit

Sales Returns and Allowance

Debit

Sales Discounts

Debit

Sales

Credit

An ___________ is a claim against a customer arising from a sale on account.

account receivable

The Income Statement will include the following accounts

Revenues less Expenses (ordered largest to smallest amount) with Miscellaneous Expense listed last

A business pays weekly salaries of $44,483 on Friday for a five-day week ending on that day. Determine the adjusting entry necessary at the end of the fiscal period ending on Thursday

debit Salary Expense, $35,586; credit Salaries Payable, $35,586

The Statement of Owner's Equity begins with the beginning balance followed by

plus investments plus Net Income (loss) less withdrawals

The balance in the office supplies account on June 1 was $5,256, supplies purchased during June were $3,704, and the supplies on hand at June 30 were $2,433. Determine the amount to be recorded as supplies expense for the June 30 adjusting entry.

$6,527

When preparing the statement of owner's equity, the beginning capital balance can always be found

in the general ledger

The classified Balance Sheet will subsection the assets section as follows

Current Assets and Property, Plant, and Equipment

As time passes, fixed assets other than land lose their capacity to provide useful services. To account for this decrease in usefulness, the cost of fixed assets is systematically allocated to expense through a process called

depreciation

There are four closing entries. The first one is to close ____, the second one is to close ____, the third one is to close ____, and the last one is to close ____.

Revenues, expenses, income summary, drawing account

The balance in the prepaid rent account before adjustment at the end of the year is $17,220, which represents 9 months' rent paid on December 1. Determine the adjusting entry required on December 31.

debit Rent Expense, $1,913, credit Prepaid Rent, $1,913

The type of account and normal balance of Accumulated Depreciation is

contra asset, credit

Accumulated Depreciation appears on the

balance sheet in the property, plant and equipment section

The type of account and normal balance of Unearned Rent is

liability, credit

After posting the second closing entry to the income summary account, the balance will be equal to

the net income or (loss) for the period.

On which financial statement will Income Summary be shown?

No financial statement

Adjusting entries are

needed to bring accounts up to date and match revenue and expense

Notes Receivable due in 350 days appear on the

balance sheet in the current assets section

By matching revenues and expenses in the same period in which they incur

net income or loss will be properly reported on the income statement.

The adjusting entry for rent earned that is currently recorded in the unearned rent account is

debit Unearned Rent; credit Rent Revenue

The classified Balance Sheet will divide its Liabilities Section as the following subsections

Current Liabilities and Long-Term Liabilities

Unearned Fees appear on the

balance sheet as a current liability

Depreciation Expense and Accumulated Depreciation are classified, respectively, as

expense, contra asset

Prepaid insurance is reported on the balance sheet as a

current asset

Adjusting entries affect at least one

income statement account and one balance sheet account

Which of the following accounts will be closed to the Capital account at the end of the fiscal year?

Income Summary

Comprises 70% of business entities in the United States

Proprietorship

Generates 90% of business revenues

Corporation

Owned by two or more individuals

Partnership

Organized as a separate legal taxable entity

Corporation

Easy and cheap to organize

Proprietorship

Often used as an alternative to a partnership

limited liability company (LLC)

Used by large business

Corporation

Has the ability to obtain large amounts of resources

Corporation

Offers tax and legal liability advantages for owners

limited liability company (LLC)

A tax preparation firm

Service Firm

A law firm

Service Firm

A health club and spa

Service Firm

An automobile dealer

Merchandising firm

A book publisher

Manufacturing firm

A hospital

Service Firm

A supermarket

Merchandising firm

A modular homebuilder

Manufacturing firm

A men's clothing store

Merchandising firm

A dressmaking company

Manufacturing firm

The assets and liabilities of the company are $85,155 and $46,820 respectfully. Owner's equity should equal

$38,335

Revenue is earned when

...

__________ are assets that are used up during the process of earning revenue

Expenses

The initials GAAP stand for

Generally Accepted Accounting Principles

Which of the following is a manufacturing business?

Ford Motors

______ are increased with debits and decreased with credits

Assets

True or False The balance sheet represents the accounting equation.

True

A financial statement user would determine if a company was profitable or not during a specific period of time by reviewing

the Income Statement.

Which of the following accounts is an owner's equity account?

Ross Morris, Capital

The asset created by a business when it makes a sale on account is termed

accounts receivable

True or False The rights or claims to the assets of a business may be subdivided into rights of creditors and rights of owners

True

The monetary value charged to customers for the performance of services sold is called a(n)

revenue

The debt created by a business when it makes a purchase on account is referred to as an

account payable

The assets and liabilities of the company are $85,155 and $46,820 respectfully. Owner's equity should equal

$38,335

The classification and normal balance of the accounts payable account is

a liability with a credit balance

Consuming goods and services in the process of generating revenues results in ________ .

expenses

Which of the following entries records the acquisition of office supplies on account?

Office Supplies, debit; Accounts Payable, credit

Which of the following describes the classification and normal balance of the fees earned account?

revenue, credit

Reports as of a specific date

Balance Sheet

The first statement prepared

Income Statement

Reports only revenues and expenses

Income Statement

The second statement prepared

Statement of Owner's Equity

The connecting link between the income statement and balance sheet

Statement of Owner's Equity

Revenue accounts are increased by

Credits.

_________ are debts owed by the business entity.

Liabilities

The increase side of all accounts is the ___________

Normal balance.

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