BUS 112 - Final

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 a(n).

employee

The entry to record a payroll tax that is incurred by the employer would include a debit to a(n) account.

expense

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

The __________ is referred to as the record of final entry.

general ledger.

The increase side of an account represents the ___________ balance of the account.

normal.

On the income statements, revenues minus expenses equals ___________ for a period of time.

net income or net loss

The Freight In account is ________

an expense account with a normal debit balance.

Employees of firms engaged in interstate commerce must receive an overtime rate of at least 1.5 times the regular hourly rate of pay for time worked in excess of _________ hours per week.

40

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 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

The entry to record a purchase allowance granted on a credit memo includes a debit to the ________ account in the general ledger.

Accounts Payable.

On a worksheet, the adjusted balance of Supplies is extended from the Adjusted Trial Balance Debit column to the _______ Debit column.

Balance sheet.

______ 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.

The ______ is (are) the cost to the business of the merchandise sold to customers.

cost of goods sold.

The quantity of goods that a business has on hand for sale to customers is called _______.

merchandise inventory

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.

Form 940 is used to report _______ taxes.

FUTA

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.

Form 941 is used to report federal income taxes withheld, social security taxes, and ______ taxes.

Medicare.

The account credited in the adjusting entry made to record the expiration of a portion of prepaid rent is the ________ account.

Prepaid Rent.

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

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.

The stock of goods on hand to sell to consumers is called __________

merchandise inventory.

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.

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.

The account used to record amounts that are owed for goods or services purchased on credit is known as __________.

accounts payable

The account used to record amounts that will be collected from charge account customers in the future is referred to as __________

accounts receivable

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 a(n).

credit to Sales Tax Payable.

After damaged goods are returned, the supplier issues a(n) _____ memorandum.

credit.

A decrease in a liability is recorded on the _____________ side of the T account.

debit

When a bank deducts any amount other than a paid check from a depositor's 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.

Expense accounts are increased on the ____________ side of the T account.

debit.

Form 940 must be filled _____ time(s) a year.

one.

After all the closing entries are posted, the ___________ account reflects the results of operations for the period.

owner's capital

The balance of the Income Summary account is transferred to the ________ account.

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, earnings, and deductions are entered into a record called a(n) _______

payroll register.

The process of transferring data from a journal to a ledger is known as _______________

posting.

Employees are required to pay for _________ insurance that will reimburse employees for losses suffered from job-related injuries.

worker's compensation.

The premium rate on _______ insurance is determined by the risk involved in the work performed.

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.

Accumulated depreciation is classified an a(n) _______ account.

contra-asset

A business that sells services directly to individual consumers is called a(n).

service.

The _________ entires transfer the results of operations to owner's equity.

closing.

A firm must issue a Form ______ to each employee by January 31 of the year following the year during which the wages were earned.

W-2

Form ______ is often referred to as a withholding statement.

W-2

A journal entry containing more than one debit or more than one credit is called a(n) ________ entry.

compound.

The _______ ledger contains accounts for credit customers.

accounts receivable.

Separate written records called _____________ are kept for each asset and liability and for owner's equity of a business.

accounts.

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 property that a business owns is referred to as its:

assets

The ________ is the financial report that shows the assets, liabilities and owner's equity of a business on a specific date.

balance sheet.

The difference between the debit and credit side of a T account is called the account ____________

balance.

A(n) _________ is a form received from the bank showing all transactions recorded in the depositor's account during the month.

bank statement.

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 __________ entries reduce the balances of the revenue, expense and drawing accounts to zero so they are ready to record data for the next period.

closing

State Unemployment Tax Payable is ________ when the tax is paid to the state.

debited.

When a transaction is entered in the general journal, the account to be ___________ is always recorded first in the Description column.

debited.

An allowance received from a creditor will ______ column of the creditor's 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.

To transfer ownership of a check from one party to another, it is necessary to _______ the check.

endorse.

When equipment is purchased for cash, the cash account is credited and the __________ account is debited.

equipment.

Because salaried 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.

Data for the first two closing entries is taken from the ________ section of the worksheet.

income statement.

The Petty Cash account _______ balance.

is an asset account with a normal debit.

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.

The debts or obligations of a business are known as its:

liabilities

Creditor's accounts in the accounts payable ledger are _____ balances.

liability accounts with normal credit.

Sales Tax Payable is classified as a(n) _______ account.

liability.

A(n) _______ business sells goods that it purchases for resale.

merchandising.

A(n) _________ is a written promise to pay a specified amount of money at a specified time.

promissory note.

The form sent to the supplier to order goods is called a(n).

purchase order.

When a sales department needs goods, it sends a form called a(n) ______ to the purchasing department.

purchase requisition.

The discounts that are offered by suppliers to encourage quick payment of invoices are referred to by customers as ______ discounts.

purchases.

An _________ 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 a(n) _______ basis.

salary.

The account used to record products returned by a buyer on the seller's books is ________.

sales returns and allowances.

When taxable goods are sold on credit, the sale of the goods and the _______ are recorded at the time of the sale.

sales tax.

A business pays _______ and Medicare taxes at the same rate and on the same taxable wages as its employees.

social security.

FICA tax is commonly referred to as _________ tax.

social security.

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

A ledger that contains accounts of a single type is called a(n) ________ ledger.

subsidiary

Revenue and expense accounts are called ___________ accounts.

temporary.

What would a posting reference of J3 within the general ledger indicate?

that the associated journal entry is on page 3 of the general journal.