Accounting Test #1

¡Supera tus tareas y exámenes ahora con Quizwiz!

If an apartment leasing company receives the rent for January 2016 from a tenant in December 2015, this will be reported by the leasing company as:

A liability in 2015

contra account

account that is an offet to or reduction of another account

depreciation

allocating cost of assets as they are used

An economic resource that is owned by a company and will provide future benefits is referred to as:

an asset

If certain assets are partially used up during the accounting period, then:

an asset account is decreased and an expense is recorded

net profit margin

net income / revenues * 100

the statement of retained earning includes

net income, dividends

debit retained earnings for

net loss

SE defintion

owners claim to the business resources

deferral adjustments

postponing reporting expenses and revenues on income statement decrease balance sheet account, increase income statement account

PPE

property plant and equiptment

expense recognition

record expenses in same period as the revenues associated

cash basis accounting

records revenue when cash is recieved and expenses when cash is paid

Accrual basis accounting

report revenues and expenses when services are provided regardless of when cash is recieved

revenue recognition

revenues recognized when earned

The income statement includes

revenues, expenses, net income

operating cycle

sell goods and services collect money from customers buy goods and services pay money to suppliers and employees

contributed captial

summarizes the total value of stock that shareholders have directly purchased from the issuing company

Order of financial statements

the income statement statement of retained earnings balance sheet statement of cash flows

current liabilities

will be paid within the next year

Alpha sold $2,000 of services to Beta on credit. Beta promised to pay for it next month. Alpha will report a $2,000:

Accounts receivable

Which of the following statements about the income statement is NOT correct?

Amounts received from customers in payment of their accounts arising from service in the prior period would be revenues in the income statement for the current period

Accounting systems:

Analyze, record, summarize, and the activities affecting its financial condition and performance

A company neglected to proceed services provided on credit. What would be the effect of this commission?

Assets and revenues would be understated

Adjusting entries are typically prepared:

At the end of the accounting period

Which of the following financial statements does not cover a period of time but rather reports amounts at a specific point in time?

Balance sheet

Adjusting entries affect:

Both income statement and balance sheet accounts

Mauricio invested $30,000 in Pizza Aroma in exchange for its stock. Pizza Aroma now has:

Common stock

West Corporation issued a $100 gift card. What journal entry will West Corporation record?

Debit cash and credit unearned revenue for $100

The adjusting entry to record the amount earned that previously had been collected in advance will:

Decrease liabilities and increase revenue

The entry to record the payment of accounts payable:

Decreases assets

Which of the following statements about financial accounting is correct?

Financial accounting reports are primarily prepared to provide information for external decision makers

Which of the following statements about financial accounting is correct?

Financial accounting reports are primarily prepared to provide information for external decision makers

Receiving cash from a customer to pay for a previously recorded account receivable will:

Have no effect on total assets

A business can obtain financing by issuing stock or borrowing from third parties, such as banks. What are the balance sheet effects of issuing stock to obtain cash?

Increase assets; no effect on liabilities; increase stockholders' equity

An example of an account that could be in an accrual adjustment for expense is:

Interest payable

A credit would make which of the following accounts decrease?

Inventory

With respect to the audience targeted for financial accounting reports, which of the parties below is not an external user?

Managers of the company issuing the reports

If a company incorrectly records a payment as an asset instead of an expense, how will this error affect net income in the current period?

Net income will be too high

If a company incorrectly records cash received for services to be provided in the future with a debit to cash and credit to sales revenue, how will this error affect net income for the current period?

Net income will be too high

Statement of cash flows order

Operating costs Investment costs financing costs

Creditors are:

People or organizations to whom a business owes money

Which of the following will result in an increase in revenue?

Selling $10,000 of groceries

If supplies are purchased for cash:

Total assets will remain the same

Definition of accounting

an informational system designed by an organization to capture the activities affecting its financial condition and performance and then report the results to decision makers

current assets

assets that business will use up within a yeat

The balance sheet includes

assets, liabilities, stockholders equity

transaction

business action that affects accounting equation

debit financing

cash a business obtains through loans

equity financing

cash obtained through owners contributions and reinvestment of profit

accrual adjustments

company earned revenue or incurred expense but has not paid yet

current ratio

current assets / current liabilities the higher the ratio (1-2) the better the ability to pay liquity

operating activities

day to day business activities ie. buying and selling goods and services

When closing accounts

debit revenue, credit expense credit/debit retained earnings credit dividends

Trial Balance

debits assets, credits liabilities and SE, Total

asset definition

economic resources presently controlled by the company that has measurable value

temporary accounts

expense, revenues, dividends

permanent accounts

liabilities, assets, equity

liabilities definition

measurable amounts that the company owes to creditors

credit retained earnings for

net income


Conjuntos de estudio relacionados

Intro to African American Society Exam 1

View Set

Impressionism/ Post Impressionism

View Set

Chapter 6: Consumer Purchasing Strategies & Wise Buying of Motor Vehicles

View Set

preoperative care practice questions

View Set

Chapter 26: Management of Patients With Dysrhythmias and Conduction Problems

View Set

Quiz 8: Prejudice, Discrimination, & Stereotyping; Conformity & Obedience

View Set