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Acct 1 Midterm

Terms in this set (50)

Fees payable would appear on the balance sheet as a(n)
liability
Which of the following is most likely to obtain large amounts of resources by issuing stock?
corporation
In which of the following types of accounts are decreases recorded by debits?
liabilities
The classification and normal balance of the drawing account are
owner's equity, debit balance
Which of the following entries records the payment of an account payable?
debit Accounts Payable; credit Cash
In the chart of accounts, the balance sheet accounts are normally listed in which order?
assets, liabilities, owner's equity
Balance sheet accounts
are called real accounts
A summary of selected ledger accounts appears as follows for Alberto's Plumbing Services for the current calendar year-end.
Alberto, Capital
12/31 Clos.7,606 1/1 Bal.5,139 12/31 Clos.11,138
Alberto, Drawing
6/30 2,000 12/31 Clos.7,606 11/30 5,606
Net income for the period is
$11,138
The arrangements between buyer and seller as to when payments for merchandise are to be made are called
credit terms
The debit side of an account
is the left side of the account
Which of the following is an example of accrued revenue?
snow removal services that have been provided and paid on the same day
Use the adjusted trial balance for Stockton Company to answer the question that follows.
Cash116,861 Accounts Receivable122,123 Prepaid Expenses13628 Equipment1815,357 Accumulated Depreciation19 1,305Accounts Payable21 1,515Notes Payable22 4,460Bob Steely, Capital31 13,838Bob Steely, Drawing32796 Fees Earned41 8,971Wages Expense512,854 Rent Expense52713 Utilities Expense53472 Depreciation Expense54168 Miscellaneous Expense59117 Totals 30,08930,089
Determine the total assets.
$23,664
Which of the following is a guideline for behaving ethically?
I. Identify the consequences of a decision and its effect on others.
II. Consider your obligations and responsibilities to those affected by the decision.
III. Identify your decision based on personal standards of honesty and fairness.
I, II, and III
Which of the following is not true of accounting principles?
A new accounting principle can be adopted with stockholders' approval.
Using a perpetual inventory system, the entry to journalize the purchase of $30,000 of merchandise on account would include a
debit to Merchandise Inventory
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Merchandise is sold for cash. The selling price of the merchandise is $3,000, and the sale is subject to a 6% state sales tax. The journal entry for the sale would include a credit to
Sales Tax Payable for $180
The following accounts appear in the ledger of Monroe Entertainment Co. All accounts have normal balances.
Accounts Payable$407 Fees Earned$1,905Accounts Receivable937 Insurance Expense496Prepaid Insurance4,050 Land1,706Cash1,291 Wages Expense785Drawing350 Capital7,303
Total assets are
$7,984
Cumberland Co. sells $1,107 of merchandise to Hancock Co. for cash. Cumberland paid $635 for the merchandise. Under a perpetual inventory system, which of the following is the correct journal entry(ies)?
debit Cash, $1,107; credit Sales, $1,107; and debit Cost of Merchandise Sold, $635; credit Merchandise Inventory, $635
Sales to customers who use bank credit cards, such as MasterCard and VISA, are generally treated as
cash sales
Which of the following is not a business entity?
entrepreneurship
Merchandise Inventory is classified on the balance sheet as a
current asset
The income statement should be prepared
before the statement of owner's equity and balance sheet
The income statement will present
Revenues less Expenses (ordered largest to smallest amount) with Miscellaneous Expense listed last
There are two closing entries. The first one is to close _____; the second one is to close _____.
revenues and expenses; the drawing account
Unearned fees appear on the
balance sheet as a current liability
Norfolk Sporting Goods purchases merchandise with a catalog list price of $15,900. The retailer receives a 30% trade discount and credit terms of 2/10, n/30. What amount should Norfolk debit to the merchandise inventory account?
$10,907
(15900 x 30% = 11130 x 2% = 10907
Deferred revenue is revenue that is
not earned but the cash has been received
If total liabilities decreased by $23,314 during a period of time and owner's equity increased by $30,102 during the same period, the amount and direction (increase or decrease) of the period's change in total assets would be a
$6,788 increase
Which of the following accounts will be debited in the closing entry at the end of the year?
Fees Earned
Which of the following entries records the acquisition of office supplies on account?
Office Supplies, debit; Accounts Payable, credit
The balance in the prepaid rent account before adjustment at the end of the year is $14,072, which represents 9 months' rent paid on December 1. The adjusting entry required on December 31 is
debit Rent Expense, $1,564; credit Prepaid Rent, $1,564
The business entity concept means that
the entity is an individual economic unit for which data are recorded, analyzed, and reported
In accordance with the debit and credit rules, which of the following is true?
c.Debits increase assets.
Which of the following is considered to be unearned revenue?
a.theater tickets sold for next month's performance
Smokey Company purchases a one-year insurance policy on July 1 for $2,340. The adjusting entry on December 31 is
debit Insurance Expense, $1,170; credit Prepaid Insurance, $1,170
Managerial accountants would be responsible for providing information regarding
expansion of a product line report to management
Which term is applied to the excess of revenue from sales over the cost of merchandise sold?
gross profit
Merchandise with a sales price of $5,900 is sold on account with terms 2/10, n/30. The journal entry for the sale would include a
credit to Sales for $5,782
Equipment with an estimated market value of $30,000 is offered for sale at $45,000. The equipment is acquired for $15,000 in cash and a note payable of $20,000 due in 30 days. The amount used in the buyer's accounting records to record this acquisition is
$35,000
Two common areas of accounting that respectively provide information to internal and external users are
managerial accounting and financial accounting
Using accrual accounting, revenue is recorded and reported only
when the services are rendered without regard to when cash is received
Financial reports are used by
all of these choices
Which of the following is not considered to be a liability?
accounts Receivable
Of the following steps of the accounting cycle, which step should be completed first?
Transactions are posted to the ledger.
Gently Laser Clinic purchased laser equipment for $4,136 and paid $765 down, with the remainder to be paid later. The correct entry would be
(Debit)Equipment4,136
(Credit)Accounts Payable3,371
(Credit)Cash765
The cash basis of accounting records revenues and expenses when the cash is exchanged, while the accrual basis of accounting
records revenues and expenses when they are incurred
Buster Industries pays weekly salaries of $44,600 on Friday for a five-day week ending on that day. The adjusting entry necessary at the end of the fiscal period ending on Tuesday is
debit Salary Expense, $17,840; credit Salaries Payable, $17,840
Use the following end-of-period spreadsheet to answer the question that follow.
Fees Earned155,000
Wages Expense 63,000
Rent Expense 27,000 Depreciation Expense 15,000
C. Finley, Capital 50,000
The general term used to indicate delaying the recognition of an expense already paid or of a revenue already received is
deferral
Which of the following accounts has a normal debit balance?
Merchandise Inventory
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