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77 terms

Accounting Final

STUDY
PLAY
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.