Accounting EHS

Which of the following is NOT one of the four main financial statements?

the adjusted trial balance

Statement of financial position and statement of income are derived from:

the general ledger

Today accounting is called:

the language of business

The income statement is also known as:

the profit and loss statement

In bookkeeping, what does the word credit indicate?

the right side of the ledger

Accounting, bookkeeping and auditing represent:

the three divisions of accountancy

If a company is assumed to continue trading normally for the foreseeable future it is a:

Going concern

If a business makes a purchase on credit, what account is increased?

Accounts payable

Receiving payment for goods or services increases the cash account and decreases this account:

Accounts receivable

Which of the following is the correct definition of the accounting equation?

Assets= liabilities + Owner's equity

If a business borrows money from a bank, how is this transaction reflected in the accounting equation?

Increase an asset and increase a liability

Which of the following is a non-operating expense?

Interest expense

The result after all revenue and expenses are accounted for is known as:

Net profit or net loss

which of the following is NOT one of the four basic GAAP principles?

Revenue should be recorded when realized or realizable and when cash is received

Which one of these is NOT an organization that would review the financial reports of a business?

Rival Companies

What time period is represented on the balance sheet?

The close of business on the date of the balance sheet

what role does the Financial Accounting Standards Board play?

They set accounting standards for public companies in the US

in a double-entry bookkeeping system ever debit transaction must have

a corresponding credit transaction

since accounts receivable are usually collected within two months they are classified as:

a current asset

An asset account is increased by making what type of entry?

a debit entry

What does the income statement represent?

a period of time

Banks are an excellent internal cash control because they offer:

a physical barrier to the cash

money owed to the company from delivery of a good or service on credit represents

a receivable

Revenue is recorded when the sale is made in what method of accounting?

accrual basis method

Which of the following occurs at the end of an accounting period in order to allocate income and expenditure to the appropriate year?

adjusting entry

Which of the following is a noncash item that would be included on the income statement?

all of these answeredd

Generally accepted accounting principles give businesses:

all of these answers

Which of the following is a limitation associated with income statements?

all of these answers

What is the definition of an asset?

anything capable of being owned or controlled to produce value

How are sales recorded in the general journal?

as a credit to the sales account and a debit to the cash account/accounts receivable

how is formal promissory note in acknowledgment of a customer's debt classified?

as a note receivable

Items that a business can use of exchange to produce products of the business are known as:

assets

Receivables are shown on what financial statement?

balance sheet

Which of these is NOT part of the balance sheet equation

cash flow

Which of the following is a matter of ensuring that transactions that take place after the business's financial period are not included in the financial statements?

closing the books

What should a company do with their monthly statement from the bank?

compare it to their internal records to see if there are any discrepancies

If a journal entry is "unbalanced", what does it mean?

debits do NOT equal credits

In the revenue recognition principle revenue is recognized when:

goods and services are rendered

What happens if a legitimate transaction is found on the bank statement, but doesn't appear on the books?

it must be added to the books via a journal entry

A signature card serves what purpose?

it tells the bank who is authorized to withdraw money from the business account.

Debts owed by the business to others are classified as:

liabilities

In order for a government bond to be considered a cash equivalent it must:

mature within three months of the financial statements

book balance and bank balance are two columns that appear where?

on the bank reconciliation

Which of these is not a common internal cash control?

petty cash log

The International Financial reporting standards were developed to:

provide a common global language for business affairs

Financial Reporting should:

provide information that is useful in making business and economic decisions

A company's equity represents what items?

retained earnings and shareholder funds

All these accounts appear on the balance sheet EXCEPT:

revenue

Determining whether the business keeps a large amount of cash on hand that is easily accessible is what element of the internal control?

risk assessment

The journal entry to record the sale of goods on account that includes a debit to what account

sales allowance

Which of the following accounts has a normal debit balance?

sales returns and allowances

Which of the following is not reported on the balance sheet?

sales revenue

What is the foundation of the double entry bookkeeping system?

The basic accounting equation

Which of these is an example of a other receivable/

all of these answers

What are the two major asset classes?

tangible and intangible

Which of the following is a noncash item that would be included on the income statement?

All of these answers

Which one of these is an example of when employees would use a company's financial statements?

All of these answers

What do we mean when we say a double-entry bookkeeping entry must be in balance?

Total debits must equal total credits

in order to be included in the cash account on the financial statement, the currency must be:

all of these answers

What does a company's income statement help investors and creditors determine?

all these answers

The most common way to communicate financial information about business entities is with;

Financial Statements