Accounting Exam Review

Created by jmteague 

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accouting equation

an equation showing the re;ationship among assets, liabilities, and owner's equity.

source document

a business paper from which information is obtained for a journal entry

service business

a business that performs an activity for a fee

work sheet

a columnar accounting form used to summarize the getneral ledger information needed to prepare financial statements

closing entries

journal entries used to prepare temporary accounts for a new fiscal period

posting

transferring information from a ournal entry to a ledger account

trial balance

a proof of the equality of debits and credits in a general ledger

proprietorship

a business owned by one person

post-closing trial balance

a trial balance prepared after the clsing entries are posted

temporary accounts

Accounts used to accumulate information until it is transferred to the owner's capital account.

T account

an accounting device used to analyze transactions

balance sheet

a financial statement that reports assets, liablities, and owner's equity on a specific date

chart of accounts

a list of accounts used by a business

revenue

an increase in owners equity resulting from the operations of a business

adjusting entries

journal entries recorded to update general ledger accounts at the end of a fiscal peirod

False

The posting reference should always be recorded int he journal's Post. Ref. column before amounts are recorded in the ledger.

False

Blank endorsements should be used when sending checks through the mail

False

When the petty cash fund is replenished, the balance of the petty cash account increases.

True

Making adjustments to general ledger accounts is an application of the Matching Expenses with Reveue accounting concept.

True

The value of the prepaed insurance coverage used during a fiscal period is an expense.

False

Net income on a work sheet is calculated by subtracting the Income Statement Credit column total from the Income Statement Debit column total.

True

The formula for calculating the toal expenses compenet percentage is total expenses divided by total sales equals total expenses component percentage.

False

The current capital to be reporte don abalance sheet is calulated as the capital account balance plus net income equals current capital.

True

Temporary accounts must start each fiscal period with a zero balance

True

The blances of the expense accounts must be reduced to zero to prepare the accounts for the next fiscal period.

the post reference number in the Post Ref column of the Journal

The last step in the posting procedure is writing

The account to which an amount is posted

An account number in the journal's Post. Ref. Column shows

Always placed in account's Pos. Ref. column

Posting references in a journal are

At the end of the month

a petty cash fund is always replenished

$5,300

The bank statement shows an account balance of $5,500. There are outstanding checks totaling $600 and an outstanding deposit of $400. The adjusted bank balance should be

Income Statement Credit Column

On a work sheet, the balance of the Sales account is extended to the

Income Statement Credit and Balance sheet Debit columns

A net loss is entered int he work sheet's

Accounting Period Cycle

Prepareing financial statements at the end of each monthly fiscal period is an application of the accounting concept

debit Supplies Expense; credit Supplies

The journal entry to adjust Supplies is

value of supplies used during the fiscal period

after the adjusting entry for Supplies has been psoted, Supplies Expense has an up-to-date balance that is the

value of insurance premiums used during the fiscal period

After the adjusting entry for Prepaid Insurance has been posted, Insurance Expanese has an up-to-date balance that is the

debit Sales; credit Income Summary

The journal entry to close Sales is

debit Income Summary for the total expenses; credit each expense account

The journal entry to close the expense accounts is

restrictive endorsement

An endorsement on the back of a check indicating that the check is to be accepted for deposit only is a

debit Petty Cash, $200; credit Cash, $200

The entry to establish a $200 petty cash fund is

Net cinome divided by total sales equals net income component percentage

The formula for calculating the net income component percentage is

Consistent Reporting

Follwing the same acccounting procedures int he same way in each accoutning period is an application of the accounting concept

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