accounting exam
a balance sheet must be prepared in account form only
false
a cash sale in which a credit card is used for the total amount of the sale at the time of the transaction
false
a purchase invoice lists only the total cost of the merchandise
false
accounts receivable is a contra account to its related asset account, allowance for uncollectible accounts
false
entries in a cash receipts journal affect account balances in the accounts payable ledger and the general ledger
false
errors found in the process of totaling and proving a journal page do not need to be corrected until the end of the fiscal period
false
for a merchandising business, every sale dollar reported on the income statement includes only two components; total expenses and net income
false
no employees are exempt from having federal income taxes withheld
false
the contra account purchases discount has a normal debit balance
false
the heading of the balance column of an account in the accounts payable ledger is titiled debit balance
false
the last journal to be posted should be the general journal
false
the prepaid insurance account is adjusted to show the value of insurance that has been prepaid
false
the report that summarizes the cash and credit card sales of a point-of-sale terminal is called a batch report
false
the source document for journalizing employer payroll taxes is a check
false
the total amount of the purchases journal is posted to the purchases and accounts receivable accounts
false
the total of all customer account balances in the accounts receivable ledger equals the balance of the general ledger controlling account accounts payable
false
the totals of the general columns of the cash payments journal are posted
false
all employees must report their withholding allowances on a
form w-4
special amount columns are used for transactions that occur
frequently
the useful life of a planet asset is affected by
functional depreciation, and physical depreciation
the revenue remaining after cost of merchandise sold has been deducted is
gross profit on sales
medicare is for people who
have reached retirement age
federal income tax is withheld from employee earnings
in all 50 states
a journal used to record only one kind of transaction
is a special journal
each entry in the purchases journal is an amount that
is to be paid to a vendor
employeers are required to furnish each employee an annual statement of earnings and withholdings before
january 31 on the following year
until the amounts withheld from employee salaries are paid by the employer, they are recorded as
liabilities
the retail price listed in a catalog or on an internet site is called the
list price
liabilities owed for more than a year are called
long-term liabilities
the amount added to the cost of merchandise to establish the selling price is known as the
markup
using a sales invoice as a source document for recording a sale on account is an application of the accounting concept
objective evidence
a cash payments journal is used to journalize
only cash payment transactions
in the entry to journalize employeer payroll taxes expenses for a semimonthly period, the account debited would be
payroll taxes expense
a work sheet is used to
plan adjustments, and summarize information necessary to prepare financial statements
computers, sales display cases, furniture, and cash registers are examples of
planet assets
a business may decide to pay employee salaires every week, every two weeks, twice a month, or once a month
true
a corporation's board of directors is elected by the stockholders
true
a major difference between balance sheets of a corporation and a proprietorship is the owner's equity section
true
a payroll system must include an accurate record of the time each employee has worked
true
a reduction in the list price granted to customers is called a trade discount
true
a sale of merchandise may be for cash or on account
true
a stockholder is an owner of one or more shares of a coroporation
true
accounts receivable is an asset account with a normal debit balance
true
businesses must withhold federal income tax from employee total earnings
true
cost of merchandise sold is also known as cost of goods sold
true
each amount in the general columns of the cash payments journal is posted to a general ledger account
true
each amount in the sales journal's accounts receivable debit column is posted to the accounts receivable ledger
true
each entry in the accounts receivable credit column of the cash receipts journal affect the customer names in the account title column
true
employee total earnings are calculated as regular hours x regular rate, plus overtime hours x overtime rate
true
a business form used to record details affecting payments made to an employee is
an employee earnings record
sometimes increasing the markup to improve an unacceptable component percentage for gross profit on sales is a bad decision because`
an increase in markup may actually cause a decrease in sales revenue
a financial statement that reports a corporations assets, liabilities, and stockholders equity on a specific date is
a balance sheet
to indicate that column totals are not to be posted
a check mark is placed in parentheses under the total
until payment is made, payroll taxes for an employer are
a liability
to record the payment of federal unemployment tax, the account debited is
a liability account
the amount of goods on hand for sale to customers is
a merchandise inventory
a business form used to payroll information is
a payroll register
when cash is received on account, the balacne of the
accounts receivable account decreases
preparing financial statements that provide information about a businesses financial condition, changes in this financial condition, and the progress of operations is an application of the accounting concept
adequate disclosure
information to be recorded in the accounts payable ledger is
all of the above
a subsidiary ledger containing only accounts for vendors from whom items are purchased or bought on account is
an accounts payable ledger
the distribution of dividens only by formal action of a corporations board of directors is an application of the accounting concept
business entity
the journal entry for a cash and credit card sales transaction is
debit cash; credit sales; credit sales tax payable
the entry to adjust prepaid insurance at the end of a fiscal period when the balance of the prepaid insurance account is $3,600 and the value of the prepaid insurance is $1,600
debit insurance expense, $2,000; credit prepaid insurance, $2,000
the amount of net income after federal income tax belonging to a single share of stock is called
earnings per share
the total earnings column total is journalized as a debit to
salary expense
in a cash sales transaction with sales tax the
sales tax amount collected is a liability
the amount of sales tax collected is recorded in a
separate liability account
a vendor number is written in the post. ref. column of the journal as the last posting step to
show that posting of this line to the accounts payable ledger is complete
to record the employer payroll taxes expense, the following accounts are credited
social security tax payable, medicare tax payable, unemployment tax payable-federal, and unemployment tax payable-state
an agreement between a buyer and a seller about payment for merchandise is the
terms of sale
the total of the schedule of accounts receivable should equal
the accounts receivable account balance in the general ledger
when a customer account balance is changed
the balance of the controlling accounts receivable is also changed
to prepare the corporations balance sheet use the information from
the balance sheet columns of a work sheet, and the owners equity statement
each account in a subsidiary ledger has
three amount columns
what is the formula for calculating the invoice amount
total list price-trade discount=invoice amount
employee withheld income tax, employee social security and medicare tax, and employer social security and medicare tax are paid periodically to the federal government in a combined payment
true
employers must pay to the government the taxes withheld from employee earnings
true
every business collecting a sales tax needs accurate records of the amount of total sales and total sales tax collected
true
form w-3, transmittal of income and tax statements, is sent to the social security administration by feburary 28 each year
true
information from a completed work sheet is used to prepare the income statement
true
payroll taxes are based on employee total earnings
true
sales for cash and credit cards are recorded as a single cash sales transaction
true
sales tax is a tax on sale of merchandise or services
true
sales tax rates are usually stated as a percentage of sales
true
some income may be distributed as dividends to provide stockholders with a return on their investments
true
the amount of sales tax collected is recorded in a seperate liability account titled sales tax payable
true
the beginning balance of the capital stock account is the amount of capital stock issued at the beginning of the year
true
the money paid for employee services is a salary
true
the petty cash account cash short and over is a temporary account
true
the realization of revenue accounting concept is applied when a sale is recorded at the same time the sale is made
true
the source document for a purchases return is a debit memorandum
true
the total amount of the purchases journal is posted to two general ledger accounts, purchases and accounts payable
true
total earnings are sometimes referred to as gross pay
true
when purchases are recorded at their cost, including any related shipping costs and taxes, the historical cost accounting concept is being applied
true
the form used for the transmittial of the previous years earnings and payroll taxes withheld for all employees is form
w-3
a deduction from total earnings of each person legally supported by a taxpayer is a
witholding allowance
