Accounting Final Exam Study Guide
the person or firm that issues a check is called the __________ or payor of the check
drawer
the final closing entry transfers the balance(s) of the __________ account(s) to the owner's capital account
drawing
a person who is hired by a company and who is under the control and direction of the employer is called an
employee
to transfuse ownership of a check from one party to another, it is necessary to ________ the check
endorse
at the end of the accounting period, the balances of the revenue and expense accounts are transferred to the ____________ account
income summary
When a business pays cash for salaries, assets decrease and expenses
increase
when a business sells services for cash, assets increase and revenue:
increases
a(n) ___________ is paid by the company to carry out a specific task or job but is not under the direct supervision, control, and direction of the company
independent contractor
the entry to record the receipt of a check in settlement of an interest-bearing promissory note includes a debit to cash, a credit to notes receivable and a credit to
interest income
the petty cash account ________ balance
is an asset account with a normal debit
The debts or obligations of a business are known as its
liabilities
sales tax payable is classified as a(n) ________ account
liability
creditors accounts in the accounts payable ledger are _______ balances
liability accounts with normal credit
the stock of goods on hand to sell to consumers is called
merchandise inventory
A(n) ___________ business sells goods that it purchases
merchandising
when taxable goods are sold on credit, the sale of the goods and the ___________ are recorded at the same time of the sale
sales tax
when the _________ method of depreciation is used, an equal amount of depreciation is charged to each accounting period during the asset's useful life
straight-line
Revenue and expense accounts are called __________ accounts
temporary
What would posting reference of J3 within the general ledger indicate?
that the associated journal entry is on page 3 of the general journal
an allowance from a creditor will _______ column of the creditors account
decrease the creditor's account balance and be posted to the debit
the process of allocating the cost of a long-term asset as an expense of operations during the asset's expected useful life is known as
depreciation
If assets are $17,000 and owner's equity is $10,000, liabilities are
$7,000
an employee whose regular hourly rate is $12 and whose overtime rate is 1.5 times the regular rate worked 45 hours in one week. The employer should record an overtime premium of _________ in the payroll register
30
the account used to record amounts that will be collected from charge account customers in the future is referred to as
accounts receivable
The process of updating accounts at the end of an accounting period for previously unrecorded items that belong to the period is referred to as making
adjusting entries
the freight in account is
an expense account with a normal debit balance
The property that a business owns is referred to as its
assets
The difference between the debit and credit side of a T account is called the account
balance
On a worksheet, the adjusted balance of supplies is extended from the Adjusted Trial Balance Debit column to the ___________ debit column
balance sheet
The __________ is the financial report that shows the assets, liabilities, and owner's equity of a business on a specific date
balance sheet
a(n) _______ is a form received from the bank showing all transactions recorded in the depositions account during the month
bank statement
when a sales department needs goods, it sends a form called a(n) _______ to the purchasing department
purchase requisition
_______________ is the process by which employees are investigated by an insurance company that will insure the business against losses through employee theft or mishandling of funds
bonding
accumulated depreciation is classified as a(n) ___________ account
contra-asset
the _______ is (are) the cost to the business of merchandise sold to customers
cost of goods sold
after damaged goods are returned, the supplier issues a(n) ________ memorandum
credit
the account accumulated depreciation has a normal __________ balance
credit
the right side of a T account is referred to as the __________ side of an account
credit
fees charged by the credit card company for processing sales are debited to an account called
credit card expense
the entry to record a sale of merchandise on credit that is subject to sales tax includes an __________
credit to sales tax payable
A decrease in a liability is recorded on the ___________ side of the T account
debit
Expense accounts are increased on the ___________ Side of the T account
debit
when a bank deducts any amount other than a paid check from a depositors account, it issues a form called a(n)
debit memorandum
the entry to record the deposit of federal income taxes withheld includes a _________
debit to the employee income tax payable account
When a transaction is entered in the general journal, the account to be _________ is always recorded first in the description column
debited
When equipment is purchased for cash, the cash account is credited and the ______________ account is debited
equipment
because salaries employees who hold supervisory or managerial positions generally are not subject to wage and hour laws, they are known as
exempt employees
in the closing procedure, the total of the ____________ account balances are transferred to the debit side of the income summary account
expense
a small pencil figure written at the base of an amount column showing the sum of the entries in the column is called a
footing
if a payee indicates as part of the endorsement the name of the person firm or bank to whom the check is to be payable the payee has made a(n) ___ endorsement
full
A ___________ is referred to as a record of original entry
general journal
A description should accompany each entry made in the
general journal
A permanent, classified record of all accounts used in a firm's operation is called a(n)
general ledger
Data for the first two closing entries is taken from the __________ section of the worksheet
income statement
The process of recording transactions in a journal is referred to as
journalizing
When posting, the __________ is recorded in the posting reference column of the journal
ledger account number
on the income statement, revenue minus expenses equals ___________ for a period of time
net income or net loss
the increase side of an account represents the ____________ balance of the account
normal
The balance of the Income Summary account is transferred to the __________ account
owner's capital
employees are required to pay for ________ insurance that will reimburse employees for losses suffered from job-related injuries
worker's compensation
A(n) _____________ is prepared at the end of each accounting period to organize and summarize the data needed for the preparation of the financial statements
worksheet
The supplies account had a balance of $1,200 when a physical count indicated that supplies on hand totaled $250. This means that supplies in the amount of ____________ were used during the accounting period
$950
employees of firms engaged in interstate commerce must receive overtime rate of at least 1.5 times the regular hourly rate of pay for time worked in excess of __________ hours per week
40
The __________ is referred to as the record of final entry
General ledger
if the income summary account has a debit balance before it is closed, the firm experienced _______________ from operations
a net loss
after all the closing entries are posted to the ledger, the income summary account will have _____________ balance
a zero
Separate written records called _____________ are kept for each asset and liability and for the owner's equity of a business
accounts
The account used to record amounts that are owed for goods or services purchased on credit is known as
accounts payable
the entry to record a purchase allowance granted on a credit memo includes a debit to the _________ account in the general ledger
accounts payable
the _______ ledger contains accounts for credit customers
accounts receivable
The difference between the debit balance of the Equipment account and the credit balance of the accumulated depreciation - equipment account is called the ____________ of an asset
book value
the _________ if the amount of cash available for deposit is less than the amount listed on the audit tape taken from the cash register
cash short or over account is debited
the ___________ entries transfer the results of operations to owner's equity
closing
the ____________ entries reduce the balance of revenue, expenses, and drawing accounts to zero so they are ready to record data for the next period
closing
A journal entry containing more than one debit or more than one credit is called a(n) _____________ entry
compound
after all the closing entries are posted, the __________ account reflects the results of operations for the period
owner's capital
the financial interest of the owner in a business is called
owner's equity
after payroll computations are made, the hours worked, rates, earning, and deductions are entered into a record called an
payroll register
The process of transferring data from a journal to a ledger is known as
posting
the account credited in the adjusting entry made to record the expiration of a portion of prepaid rent is the ___________ account
prepaid rent
An _____________ is a written promise to pay a specified amount of money at a specific time
promissory note
the form send to the supplier to order goods is called a(n)
purchase order
the discounts that are offered by suppliers to encourage quick payment of invoices are referred to by customers as _______ discounts
purchases
assuming a periodic inventory system is used, purchases returns and allowances are recorded in the general journal as a debit to accounts payable and a credit to
purchases returns and allowances
A(n) ________________ account is used to record increases in owner's equity from the sale of goods or services
revenue
a worker who is paid an agreed amount for each week or month or year, regardless of the actual hours worked is said to be paid on an ___________ basis
salary
the account used to record products returned by buyer on the seller's books is ________
sales returns and allowances
a business that sells services directly to individual consumers is Called and _______ business
service
FICA tax is commonly referred to as ______ tax
social security
a business pays _________ and medicare taxes at the same rate and on the same taxable wages as its employees
social security
a ledger that contains accounts of a single type is called a(n) ______ ledger
subsidiary
