Accounting Final Review

Jacqueline earns 18% commission on sales. Her sales for three months were: $2,870, $3,150, and $3,940. What was her total commission for the three months?

$1,792.80

Revenue and expense accounts are listed in the Trial Balance section of the work sheet and in the _______ of the work sheet.

income statement

Closing entries are used to transfer the net income or net loss for the accounting period to the ___

income summary account and capital account

If an invoice dated September 9 and received on September 12 shows terms 2/10, n/30, what is the last day the discount may be taken?

september 19

When posting a correcting entry, the phrase "correcting entry" is usually written in the Explanation column of the ledger account.

true

A business transaction affects at least how many accounts?

two

The asset, liability, and owner's equity are extended to the _______ of the work sheet.

balance sheet

ABC Corporation uses special journals to account for detailed transactions. Which of the following would not be considered a special journal?

general journal

What type of business is Toys R Us?

merchandising

What are the different expenses?

rent, utilities, advertising

Which of the following will not appear on a post-closing trial balance?

sales

Just for You Shoes purchased shoes for its two retail locations. The mall store ordered 20 pairs at $29.90/pair and 40 pairs at $18.50 per pair. The downtown store ordered 35 pairs at $29.90/pair and 24 pairs at $18.50/pair. What was the total cost of the shoes for the two stores?

$2,828.50

The bank statement shows a checking account balance of $5,500. There are outstanding checks totaling $600, and an outstanding deposit of $400. The cash account balance should be

$5,300

The adjustment for Merchandise Inventory on the work sheet is a debit of $9,850. The Merchandise Inventory amount in the Adjusted Trial Balance section is $71,396. What was the beginning Merchandise Inventory Balance?

$61,546

Lindsay earns $15 per hour. One week, she worked 44 hours. Her gross earnings for this pay week were ____.

$690

Julie earns $18.50 per hour. She is paid overtime (time and one-half) for hours worked on Sunday. The first Sunday in June she worked 6 hours, giving her 46 hours for the week. What were her gross wages if total taxes withheld equaled 18%?

$906.50

If the merchandise is purchased for $1,000 on August 1, with terms of sale 2/10, n/30, the amount due to the vendor on August 9 is

$980

sole proprietorship

business owned by one person

A store purchased a one-year insurance policy for $1,800 on September 1. Its fiscal period ended December 31. What is the amount of the adjustment and what accounts are debited and credited on December 31?

Debit insurance expense $600 and credit prepaid insurance $600

A listing of vendor accounts, account balances, and total amount due to all vendors is a

schedule of accounts payable

Every transaction recorded in the cash receipts journal requires ____

a debit to cash in bank

A liability resulting from the purchase of goods or services on credit is usually recorded as

accounts payable

Special journals ____.

are footed before columns totals are proved

corporation

business organization recognized by law to have a life of its own

partnership

business owned by two or more people who agree to operate the business as co-owners

not-for-profit

business with a main goal to balance revenue and expenses

for-profit

business with a main goal to make money

The amount of net income for the period is added to the Balance Sheet credit total because it increases the balance in the _______ account.

capital

Dale Orondo wrote a check for $200 for personal use. What account is credited?

cash in bank

When bankcard sales are entered in the general journal, what account is debited?

cash in bank

____ are made to close out or reduce to zero the balance of certain general ledger accounts

closing entries

Every journal consists of four parts: What are they?

date, debit, credit, source doc

A normal balance for Accounts Receivable is ____.

debit

An increase in Cash in Bank is a _____.

debit

If Tim Jones, the owner of Jones Hardware proprietorship, uses cash of the business to purchase a family automobile, the business should record this use of cash with an entry to

debit tim jones, withdrawals and credit cash in bank

What are the owner's claim to the assets of a business?

equities

A check should be written before the check stub is filled out.

false

A credit posting to the Office Equipment account will result in an increase to that account.

false

A credit to an accounts always increases it; a debit to an account always decreases it.

false

Because a bank service charge is automatically deducted from a businesses checking account, it is not necessary to record the transaction in a cash payments journal.

false

Checks written in pencil are acceptable.

false

Closing entries transfer the net income or net loss to the withdrawals account.

false

Every posting requires the year, month, and day to be entered in the Date column of the ledger account for every transaction.

false

Financial reports are often prepared in pencil.

false

The Purchases account is a permanent account.

false

The value of the ending inventory is always more than the value of the beginning inventory.

false

Recording account information in chronological order is called

journalizing

What kind of account is Accounts Payable? Cash in Bank? Computer Equipment?

liability, asset, asset

The purpose of the Income Statement is to report

net income or net loss for the period

Bought $175 of office supplies on credit from North Supply Inc. What account is debited?

office supplies

The accounting document that provides a basis for recording payroll transactions is the

payroll register

The process of transferring information from the journal to the individual general ledger account is called

posting

The amount of money earned by a business over and above the amount of money spent to keep a business operating is called ____.

profit(net income)

A sole proprietorship is owned by one person.

true

A tickler file contains folders for each day of the month so invoices can be placed in the folders according to their due dates.

true

An account number in parentheses under a column total in a special journal indicates that the total has been posted to the general ledger account whose number is shown.

true

An example of a voluntary deduction is one for a health insurance premium.

true

Cash is a businesses most liquid asset.

true

Employee payroll is a major expense for most companies.

true

Every amount posted will either increase or decrease the balance of a ledger account.

true

Expenses have the opposite effect from revenue on the capital account.

true

In order to help an owner or manager know the financial condition of a business, accounting records are kept and reported for a certain period of time called an accounting period.

true

It is important to complete each section of the ten-column work sheet before moving on to the next section.

true

Net income or net loss is the difference between total revenue and total expenses over a specific period of time.

true

Never erase an error in a journal entry because an erasure looks suspicious.

true

Overtime is paid to most employees after they work more than 40 hours.

true

The Payroll Tax Expense account normally has a debit balance.

true

The Sales Returns and Allowances account is important to a business because it shows the amount of credit granted to dissatisfied customers.

true

The balance sheet reports the final balances of the permanent accounts at the end of the fiscal period.

true

The difference between the debit and credit amounts in an account is the account balance.

true

Transactions are posted daily to the accounts payable subsidiary ledger.

true

When a retail merchandising business sells goods to a customer, the amount of the sold merchandise is credited to the Merchandise Inventory account.

true