Accounting final

If the sum of the debit column equals the sum of the credit column in a trial balance, it indicates

the mathematical equality of the total debits and total credits

The assumption that the economic life of a business can be divided into artificial time periods is knows as the

time period assumption

Expense recognition is tied to revenue recognition

true

Gross profit represents the merchandising profit of a company

true

Sales revenue minus cost of goods sold equals gross profit

true

The accounting cycle begins at the start of a new accounting period

true

The expense recognition principle requires that expenses be matched with revenues

true

The purpose of the adjusted trail balance is to prove the equality of debits and credits in the ledger accounts after adjusting entries are posted

true

Recording a cash sale requires

two entries, one of which includes a debit to Cost of Goods Sold

If a company determines cost of goods sold each time a sale occurs, it

uses a perpetual inventory system

The revenues recognition principles dictates that revenue should be recognized in the accounting records

when the performance obligation is satisfied

In a service-type business, the performance obligation is considered to be satisfied

when the services have been performed

In a perpetual inventory system, cost of goods sold is recorded

with each sale

The journal entry to record a credit sale is

Accounts Receivable Sales Revenue

Which of the terms below could be used when describing a cash purchase?

FOB destination

Which of the following would not be considered a merchandising company?

Jones & Jones, CPAs

Which of these steps of the accounting cycle occur at year-end only (as opposed to during the accounting period, or at the end of the accounting period)

Journalize and post closing entries

In Yani's Gyros trail balance, which type of the balance should Yani not expect for the type of account indicated

Revenues-debit

A credit granted to a customer for returned goods requires a debit to

Sales Returns and Allowances and a credit to Accounts Receivable

The entry to record the remittance of sales tax to the taxing authority includes a debit to

Sales Tax Payable

The heading for a post-closing trail balance has a date line that is similar to the one found on

a balance sheet

As an incentive for customers to pay their accounts promptly, a business may offer its customers

a sales discount

For the Chicago Huskies, the debit total in the trial balance differs from the credit total. This could be caused by (like the accountant puts 15.00 instead of 1,500)

a slide error

A trial balance may balance even when each of the following occurs except when

a transposition error is made (like they accidentally put 65 instead of 56)

Which is true?

a trial balance is prepared after posting to ledger accounts

Posting

accumulates the effects of journalized transactions in the individual accounts

The adjusted trail balance is prepared

after adjusting entries have been journalized and posted

A post-closing trail balance should be prepared

after closing entries are posted to the ledger accounts

When using a worksheet, adjusting entries are journalized

after the worksheet is completed and after financial statements have been prepared

If a customer agrees to retain merchandise that is defective because the seller is willing to reduce the selling price, this transaction is known as sales

allowance

The first step in the recording process is to

analyze each transaction for its effect on the accounts

The first required step in the accounting cycle is

analyzing transactions

The post-closing trail balance contains only

balance sheet accounts

Gross profit for a merchandiser is sales revenue minus

cost of goods sold

The respective normal account balances of Sales Revenue, Sales Returns and Allowances, and Sales Discounts are

credit, debit, debit

Under a perpetual inventory system, the entry to record a credit purchase of inventory is

debit inventory, credit Accounts Payable

In High Country Ski Rental's trial balance, which type of balance should the company's accounts expect for the type of account indicated?

equipment-debit

If a company fails to make an adjusting entry to record the expiration of prepaid insurance, then

expense will be understated

If the adjusting entry to accrue salaries and wages expense is not made

expenses will be understated

A physical count of inventory is the only needed if a periodic inventory system is used

false

A worksheet is a mandatory from that must be prepared along with an income statement and balance sheet

false

Accounting time periods that are one year in length are referred to as interim periods

false

Closing entries are unnecessary if the business plans to continue operating in the future and issue financial statement each year

false

In the making a journal entry, the credit account and amount should be listed first and indented

false

Posting is the process of proving the equality of debits and credits in the trial balance

false

Sales returns and allowances and sales discounts are both designated to encourage customers to pay their accounts promptly

false

The Sales Returns and Allowances account and the Sales Discounts account are both classified as expense accounts

false

The buyer's entry for a purchase return does not include a credit to inventory when the perpetual inventory system is used

false

The operating cycle for a service business is generally longer than that of a merchandising business

false

The revenue recognition principle dictates that revenue be recognized in the accounting period in which cash is received

false

Transactions are entered in the ledger first and then they are analyzed in terms of their effect on the accounts

false

When the seller grants a sales allowance, two journal entries are required

false

In a credit purchase of inventory, the Cash account is credited

false accs payable is credited (liability)

An accounting record of the balances of all assets, liabilities, and the owner's equity accounts is called a

general ledger

Sales Returns and Allowances is increased when

goods that were sold on credit are returned

The number of accounts in the adjusted trail balance is usually

greater than the number of accounts in the unadjusted trail balance

An accumulated depreciation account

has a normal credit balance

Without inclusion of the period's net income, debits do not equal credits in which section of the worksheet

income statement columns

Under a perpetual inventory system, cash purchases and credit purchases are debited to

inventory

Which of the following statements related to the adjusted trail balance is incorrect?

it is prepared before the adjusting entries have been made * adjusted entries come after the adjusted trial balance

The usual sequence of steps in the recording process is to analyze each transaction, enter the transaction in the

journal, and transfer the information to the ledger accounts

The final step in the recording process is to transfer the journal information to the

ledger

After a business transaction has been analyzed and entered in the book of original entry, the next step in the recording process is to transfer the information to

ledger accounts

Under a perpetual inventory system, the inventory account is adjusted for each of the following transactions except the entry to record

payment of freight on goods sold

Balance sheet accounts are considered to be

permanent accounts

Which of the following steps in the accounting cycle may be performed most frequently?

prepare a trial balance

Which of the following depicts the proper sequence in the accounting cycle

prepare a trial balance, prepare adjusting entries, prepare financial statements

Which one of the following is an optional step in the accounting cycle of a business enterprise

prepare a worksheet

The last step in preparing a trial balance is

prove the equality of the two columns

An adjusted trial balance

proves the equality of the total debit balances and the total credit balances of ledger accounts after all adjustments have been made

A sales invoice is a source document that

providers evidence of credit sales

The primary source of revenue for a wholesaler is

sale of merchandise

The term FOB shipping point means

the buyer pays freight and debits inventory

The credit terms offered to a customer by a business firm are 3/10, n/30, which means that

the customer can deduct a 3% discount if the bill is paid within 10 days of the invoice date

Which of the following would not be classified as a contra account?

Inventory