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Double entry basic accounting theory is based on Assets and expenses the group of accounts which you debit when increased are Liabilities and capital the group of accounts which you credit when increased are Debit casket coach and credit accounts payable when a funeral director buys a casket coach on credit, he would Debit rent expense and credit cash the payment of rent by cash is recorded debit office supplies and credit accounts payable purchase of office supplies on credit is recorded by Accounts a ledger is a book of Decreased an entry on the debit side of a liability account indicates the account has been Decreased an entry made on the debit side of the proprietorship account indicates that the account has been Increased an entry made on the debit side of an expense account indicates that the account has been $1100 the beginning balance in the supplies account is $600. During the month an additional $800 worth of supplies were purchased. At the end of the month, an inventory of the supplies found that only $300 remained on hand. What would be the amount of the adjusting entry for the supplies account? Increased an entry made on the debit side of an asset account indicates that the account has been Assets the things of value owned by a business are Fiscal year an accounting year ending on some date other than December 31st is called Creditor a person who whom a debt is owed is called a $2,000 A plant asset was purchased by the funeral home costing $8,000. It has a useful life of 3 years and a salvage value of $2,000. Using the straightline method of depreciation, what would be the yearly amount of depreciation? Expenses which of these does not appear on the balance sheet? Owes liabilities are all things a funeral director At any time a profit and loss statement can be prepared Increased an entry on the credit side of a revenue account indicates the account has been Not affected when cash is spent in the acquisition of an asset the net worth of a business is Posting the process of recording information in the ledger is called Asset account accounts receivable is a/an Income statement another term for profit and loss statement is Profit and Loss Statement the amount of revenue from the sale of funeral services would be shown on the Credit side the right side of a standard account is called the Footing the totaling of a column in a journal or ledger account is called Income statement advertising expense wold be reflected on the Balance sheet the accounts payable account would be shown on the Ledger a group of accounts constitutes a/an Net profit if the total of the operating expenses section of the income statement is smaller than the total of the income section, the difference is Decrease in owner's equity expense means a/an Accumulated depreciation which of the following accounts would be used to assist the accountant in an an adjusting entry involving depreciation Account balance the difference between the two sides of an account is called the Accounts payable The title of an account which would normally have a credit balance is Income an increase in proprietorship as the result of a business transaction is a/an Chart of Accounts a list of accounts that shows the arrangement of the accounts in the ledger is called debit and credit double entry bookkeeping means an entry is made as a/an Net income and investment of assets in the business by the owner the proprietorship of a business may be increased by Expenses and withdrawals of assets from the business by the owner the proprietorship of a business may be decreased by Debit petty cash and credit cash to establish a petty cash fund, one would Dr. the abbreviation for debit is Cr. the abbreviation for credit is Drawer a person who signs a check or draft ordering payment to be made is called the Drawee a person or concern, usually a bank, that has been ordered to make payment on a check or draft is called the Payee a person or company who will receive payment on a promissory note, check, draft or money order is called the Social security F.I.C.A refers to Fixed asset property of a relatively permanent nature used in the operation of a business and not intended for resale is called Fixed liabilities debts that are not due and payable within a year are called Gross profit the difference between cost of goods sold and their selling price is called Working capital the excess of current assets over current liabilities is called Note receivable a written promise of a customer to pay the business a sum of money at a future date is called a/an Land which of these does not qualify as a current asset? Depreciation a synonym for fair wear and tear of a durable asset is Accounting a language of business employed to communicate financial information based upon the recording, classification, summarization, and interpretation of financial data is called Accounting equation assets = liabilities + owner's equity is the Profit the increase in net worth due to the excess of income over costs and expenses is called Interest money paid for the use of money is called Gross margin the difference between net sales and cost of goods sold Merchandise goods purchased for resale at a profit Payment a disbursement is a Debit revenue, credit expense and revenue summary what would be the closing entry to close the revenue account? Deferred income income received but not yet earned is Invoice a paper showing quantity, description, prices of items, total amount of purchase, and terms of payment is a/an Vendor one who has made a sale is called a/an Budget an estimate of revenue and probably expense for a given period of time is a Consignee the person or business concern to whom a shipment is made is a Dividend a distribution of profits of a corporation to its stockholders as declared by the board of directors is Endorser the person who orders the bank to make payment of a financial instrument is properly termed a/an Proprietor the sole owner of a business is a Petty cash a fund of currency and coin established for the payment of small amounts of money is Net sales the difference between total sales and sales returns and allowances is Mark-up the amount added to the cost of an article to determine the selling price of that article is the Footing a total, written in small pencil figures, under the last entry in a column is the The entry is complete a double line under the last entry on a T-account means Income increases in the owner's equity resulting from business operations is known as Scrap value that portion of a plant assets original cost that cannot be depreciated is called Loss a decrease in net worth due to excess of costs and expenses over income is Inventory the merchandise that a business keeps on hand for sale is the Owner's equity, net worth, capital which of the following represents the difference between the total assets and the total liabilities Stockholder the holder or person owning stock in a corporation is the Owner's equity = $30,000, net income = $2,000 at the end of the month, a funeral home's assets totaled $50,000; the liabilities totaled $20,000; revenue for the month totaled $6,000; and the total of the expenses amounted to $4,000. Double entry the basic accounting theory is based on Closing temporary accounts the acronym REID is used when The normal operating cycle the period of time required to purchse goods and services and turn them back into cash is called Accounts a ledger is a book of Decreased an entry on the debit side of the owners equity indicates that the account has been Closed an entry on the credit side of an expense account indicates the account has been Chronological order the book of original entry is in Liabilities the debts one owes are Assets the things one owns are Gross profit sales minus cost of goods sold equals Depreciation expense the amount of depreciation taken during the current fiscal year is properly termed Depreciation the decrease in the value of a fixed asset is called Posting the process of recording information in the ledger is called Profit the primary purpose of a business is Closing entries the only time the debit side of the revenue account is used is when you make The asset cash is credited when cash is spent in the acquisition of an asset the impact on the accounting equation is Increased an entry on the credit side of a liability account indicates that the account has been Liability account accounts payable is a/an Intangible asset Goodwill is classified as a/an Income statement Another name for Profit and Loss Statement is Profit and Loss Statement The amount of income from the sale of funeral services would be shown on which formal financial statement? Debit side the left side of a standard account is called the Deferred income Income earned but not received is called. Footing the totaling of a column of a journal or ledger is called Overhead the cost of operating a business is called Liquidity Working capital is a measure of Left side The debit side of the T-account is the Journal A book in which the daily transactions of a business are first written is the Right side The credit side of a T-account is the Expense A decrease in owners equity resulting from a business transaction is a/an Client Fees An increase to which of the accounts will increase owner's equity? Overhead A term which is used synonymously with operating expenses is Assets Accounts receivable are examples of Canceled checks Checks returned to the depositor that have been paid by the bank are Outstanding check A check that has been issued but not presented for payment to a bank is called a Bad debts Accounts receivable which are uncollectable are All accounts A ledger must contain A mortgage payable A loan from a bank secured by property is An operating expense Salary expense is considered to be Transfer of figures from the journal to the ledger Posting is a/an Accounts receivable increases; revenues increases When delivery revenue is earned on account, which accounts increase and decrease? Petty cash fund A special fund for use in disbursing small sums of money is called a/an Special journal A journal designed for recording a particular type of transaction is known as a/an Debit accounts receivable; credit sales If a funeral home sells a funeral service on a 30 day account, the entry to record the transaction would be to Debit cash; credit accounts receivable If a funeral director receives payment from a client who had purchased a service on a 30 day account, he would make which of the following entries in his journal Debit purchases; credit accounts receivable If a funeral director purchases caskets from a casket manufacturer on a 30 day account, he would record the transaction as follows $5,000 A funeral car is purchased by a funeral home for $30,000. The vehicle will be used for five years and then replaced. If the estimated salvage value will be $5,000, what will be the amount of yearly depreciation using the straightline method of depreciation for computation? $779.14 David O'Dell is an employee of Mid-Cities Embalming Service and is paid a salary of $1,850 per month. He is also paid time and a half for all hours worked in excess of forty hours per week. If Mr. O'Dell worked 62 hours last week, his gross earnings for the period would be. $294.00 John Smith is employed at a local funeral home and is paid on an hourly rate of $5.00 per hour. He is also paid time and a half for any hours worked in excess of 40 hours per week. For the current pay period, he worked a total of 60 hours. If his FICA tax is 6%, and his withholding tax is 10%, what is his take-home pay for the week? Payable Liability accounts are identified by the account title followed by the word Profit and Loss Statement; Income Statement Expenses are listed on which of the following reports? Statement of Financial Condition; Balance Sheet The report that shows the financial condition of the business at a point in time is called the assets = liabilities + owners equity; assets - liabilities = owners equity The accounting equation may be stated as Accrual basis of accounting When you recognize revenue when it is earned, and expenses when they are incurred you are operating under the An asset account The account that provides a current or future benefit to the business is properly termed Double declining balance; Sum of the years digits Methods of depreciation that allow the business to recover the cost early in the life of the asset include