ACCOUNTING FINAL

Equipment

Asset

Salary owed but not yet paid

accrued expense

cash

balance sheet

Salary Payable

liability

Perpetual Inventory System

A detailed inventory system in which a mpany maintains the cost of each inventory item and the records continuously show the inventory that should be on hand

Services rendered for cash to be received

Accrued Revenue

Fees Earned but not yet received

Accrued revenue

Wages owed but not yet paid

Accured expense

Periodic Inventory System

An inventory system in which a company does not maintain detailed records of goods on hand and determines the cost of goods sold only at the end of an accounting period

Accounts receivable

Asset

Supplies

Asset

Accounts Receivable

Asset (Debit)

Cash

Asset (Debit)

Balance Sheet Reports

Assets, Liabilities, and Stockholder's Equity as of the last day of the period

Accounting Equation

Assets​ = Liabilities​ + Equity

Time Period Concept

Assumes that a​ business's activities can be sliced into small time segments and that financial statements can be prepared for specific periods.

Specific Identification Method:

Based on the actual cost of each item of merchandise. Cost of goods sold is the exact cost of the specific merchandise sold, and the ending inventory balance is the exact cost of the specific inventory items on hand.

Financial statements titles include the term ____ when the company has at least one subsidiary

Consolidated

Three dates included in a dividend payment

Date of declaration, Date of record, Date of payment

The left side of an account is used to record which of the following?

Debits

Which of the following is not an employer payroll tax

Federal Income Tax

Which of the following accounts will NOT appear on the post-closing trial balance?

Fees Earned

Matching Principle

Guides accounting for expenses; ensures that all expenses are recorded when they are incurred during the period, and matches those expenses against the revenues of the period.

In what order do we prepare financial statements?

Income Statement, Statement of Retained Earnings,Balance Sheet

Issued common stock in exchange for cash.

Increases Stockholders Equity

Received cash for services performed for customers.

Increases Stockholders Equity

Invested cash in business in exchange for common stock.

Increases assets and increases stockholders equity

Accounts payable

Liability

The two main inventory accounting systems are the

Periodic and Perpetual Inventory Systems

Bookkeeping

Perpetual Periodic

Cash paid for future rent of office space

Prepaid Expense

Supplies on hand

Prepaid expense

The last step of the accounting cycle is to

Prepare a post-closing trial balance

Which of the following types of business entities is owned by one individual?

Proprietorship

The objective to financial reporting is to

Provide information useful for making investment and lending decisions

Revenue Recognition Principle

Requires companies to record revenue when it satisfies each performance obligation.

All of the following accounts/account types are closed at the end of the accounting period EXCEPT

Retained Earnings

Statement of Retained Earnings Shows

Shows how Retained Earnings changed during the period due to Net Income (or loss) and Dividends.

Which type of business organization os owned by only one owner?

Sole proprietorship

Income Statement is also known as

Statement of Activities

Balance Sheet may be Known as

Statement of Financial Position

Dividends

Statement of stockers

Supplies expense

Stockholders Equity

Utilities Expense

Stockholders Equity

Fees earned

Stockholders equity

Which of the following characteristics best describes a corporation?

Stockholders not personally liable for entity's debts

Weighted Average Unit Cost

The average cost that is weighted by the number of units purchased at each unit cost

Fees received but not yet earned.

Unearned Revenue

Fees received for future services to be performed

Unearned Revenue

FIFO (First In, First Out)

___ is an inventory cost flow assumption based on the oldest costs being transferred first from inventory to COGS so that the most recent costs remain in inventory.

The journal entry required to close the dividends account includes

a debit to Retained Earnings and a credit to Dividends.

Income Statement

a financial statement that shows you the company's income and expenditures.

Why are liabilities usually shown before owner's equity in the accounting equation? a. creditors have the first right to assets b. owners have the first right to assets c. creditors are responsible for liabilities d. owners have the first right to liabilities

a. creditors have the first right to assets

Taxes owed but payable in the following period.

accrued expense

Utilities owed but not yet paid.

accrued expense

Which businesses use an accounting equation?

all businesses, from the largest to the smallest

A claim against a customer is known as

an account receivable

The first step of the accounting cycle is to

analyze transactions and record them in the journal

Prepaid Advertising

asset

Prepaid Rent

asset

Supplies

asset

The resources owned by a business are its

assets

Balance Sheet

assets, liabilities, and shareholders' equity.

The number of shares of stock that a corporation is _______ to issue is stated in its charter.

authorized

Which organization has the authority over the accounting and financial disclosures for companies whose shares of ownership (stock) are traded and sold to the public? a. FASB b. SEC c. IASB d. GAAP

b. SEC

Which is the accounting equation? a. liabilities plus assets equal owner's equity b. assets equal liabilities plus owner's equity c. assets minus liabilities equal owners' equity d. owner's equity minus assets equal liability

b. assets equal liabilities plus owner's equity

Equity is called owner's equity in all of the following forms of business entities EXCEPT a. proprietorships. b. corporations. c. limited liability companies (LLCs) d. partnerships.

b. corporations.

Accumulated Depreciation—Building

balance sheet

On the work sheet, the cash balance in the Adjusted Trial Balance Debit column will flow into the

balance sheet

prepaid rent

balance sheet

What is the difference between the balance sheet and the income statement?

balance sheet reports what a company owns at a specific date. An income statement reports how a company performed during a specific period.

Which of the following is an example of a fixed asset?

c. Land

All of the following accounts will appear on the post-closing trial balance EXCEPT

cash

Date of payment

cash payment made, liability paid

All corporations issue

common stock

The entry to record a​ write-off of an uncollectible account when using the direct​ write-off method involves a

debit to Bad Debts Expense

paid dividends

decrease assets and decrease stockholders' equity

Paid for business expenses

decreases assets and decreases stockholders' equity.

Salary Expense

expense

Supplies Expense

expense

Comprehensive Income Statement:

includes all changes in equity during a period except those resulting from investments by owners and distributions to owners

Fees Earned

income statement

Insurance Expense

income statement

Revenue accounts appear on

income statement

Wages expense

income statement

Purchased supplies on account

increases assets and increases liabilities

Received Cash for services performed

increases assets, increases stockholders' equity

discount

increases the "effective" interest expense.

Date of record

information gathered

The term ________ refers to the shares issued to the stockholders.

issued

The rights or claims to a company's assets that creditors have are calleda. liabilities.

liabilities

unearned rent

liability

Date of declaration

liability incurred and recorded

Comprehensive Income Statement

may be combined with the income statement or follow the income statement. It includes the "other comprehensive income" items.

A two-year premium paid on insurance policy.

prepaid expense

premium

reduces the "effective" interest expense.

Rent Revenue

revenue

On the work sheet, the Dividends balance in the Adjusted Trial Balance Debit column will flow into the

statement of stockholders' equity

Subscriptions received in advance by a magazine publisher

unearned revenue

Inventory method

• FIFO (oldest cost expensed) • LIFO (newest costs expensed) • Specific identification • Other