Accounting EHS
Which of the following is NOT one of the four main financial statements?
the adjusted trial balance
Statement of financial position and statement of income are derived from:
the general ledger
Today accounting is called:
the language of business
The income statement is also known as:
the profit and loss statement
In bookkeeping, what does the word credit indicate?
the right side of the ledger
Accounting, bookkeeping and auditing represent:
the three divisions of accountancy
If a company is assumed to continue trading normally for the foreseeable future it is a:
Going concern
If a business makes a purchase on credit, what account is increased?
Accounts payable
Receiving payment for goods or services increases the cash account and decreases this account:
Accounts receivable
Which of the following is the correct definition of the accounting equation?
Assets= liabilities + Owner's equity
If a business borrows money from a bank, how is this transaction reflected in the accounting equation?
Increase an asset and increase a liability
Which of the following is a non-operating expense?
Interest expense
The result after all revenue and expenses are accounted for is known as:
Net profit or net loss
which of the following is NOT one of the four basic GAAP principles?
Revenue should be recorded when realized or realizable and when cash is received
Which one of these is NOT an organization that would review the financial reports of a business?
Rival Companies
What time period is represented on the balance sheet?
The close of business on the date of the balance sheet
what role does the Financial Accounting Standards Board play?
They set accounting standards for public companies in the US
in a double-entry bookkeeping system ever debit transaction must have
a corresponding credit transaction
since accounts receivable are usually collected within two months they are classified as:
a current asset
An asset account is increased by making what type of entry?
a debit entry
What does the income statement represent?
a period of time
Banks are an excellent internal cash control because they offer:
a physical barrier to the cash
money owed to the company from delivery of a good or service on credit represents
a receivable
Revenue is recorded when the sale is made in what method of accounting?
accrual basis method
Which of the following occurs at the end of an accounting period in order to allocate income and expenditure to the appropriate year?
adjusting entry
Which of the following is a noncash item that would be included on the income statement?
all of these answeredd
Generally accepted accounting principles give businesses:
all of these answers
Which of the following is a limitation associated with income statements?
all of these answers
What is the definition of an asset?
anything capable of being owned or controlled to produce value
How are sales recorded in the general journal?
as a credit to the sales account and a debit to the cash account/accounts receivable
how is formal promissory note in acknowledgment of a customer's debt classified?
as a note receivable
Items that a business can use of exchange to produce products of the business are known as:
assets
Receivables are shown on what financial statement?
balance sheet
Which of these is NOT part of the balance sheet equation
cash flow
Which of the following is a matter of ensuring that transactions that take place after the business's financial period are not included in the financial statements?
closing the books
What should a company do with their monthly statement from the bank?
compare it to their internal records to see if there are any discrepancies
If a journal entry is "unbalanced", what does it mean?
debits do NOT equal credits
In the revenue recognition principle revenue is recognized when:
goods and services are rendered
What happens if a legitimate transaction is found on the bank statement, but doesn't appear on the books?
it must be added to the books via a journal entry
A signature card serves what purpose?
it tells the bank who is authorized to withdraw money from the business account.
Debts owed by the business to others are classified as:
liabilities
In order for a government bond to be considered a cash equivalent it must:
mature within three months of the financial statements
book balance and bank balance are two columns that appear where?
on the bank reconciliation
Which of these is not a common internal cash control?
petty cash log
The International Financial reporting standards were developed to:
provide a common global language for business affairs
Financial Reporting should:
provide information that is useful in making business and economic decisions
A company's equity represents what items?
retained earnings and shareholder funds
All these accounts appear on the balance sheet EXCEPT:
revenue
Determining whether the business keeps a large amount of cash on hand that is easily accessible is what element of the internal control?
risk assessment
The journal entry to record the sale of goods on account that includes a debit to what account
sales allowance
Which of the following accounts has a normal debit balance?
sales returns and allowances
Which of the following is not reported on the balance sheet?
sales revenue
What is the foundation of the double entry bookkeeping system?
The basic accounting equation
Which of these is an example of a other receivable/
all of these answers
What are the two major asset classes?
tangible and intangible
Which of the following is a noncash item that would be included on the income statement?
All of these answers
Which one of these is an example of when employees would use a company's financial statements?
All of these answers
What do we mean when we say a double-entry bookkeeping entry must be in balance?
Total debits must equal total credits
in order to be included in the cash account on the financial statement, the currency must be:
all of these answers
What does a company's income statement help investors and creditors determine?
all these answers
The most common way to communicate financial information about business entities is with;
Financial Statements