BA 111 Accounting - PCC

What is a corporation?

A type of business organization that is owned by stockholders. Stockholders usually are not personally liable for the corporation's debts.

What is a manufacturer?

A business that makes and product and sells it to its customers.

What is a merchandise company?

A business that makes its own products or buys a product from a manufacturing company to sell to its customers.

What is a service company?

A business that provides a service.

cancelled check

A check that has been processed by a bank and is no longer negotiable.

What is a partnership?

A form of business that has at least two owners. The partners usually are personally liable for the partnership's debts.

Signature card

A form signed by a bank customer that the bank uses to verify signature authenticity on all checks.

Check

A form used to indicate a specific amount of money that is to be paid by the bank to a named person or company.

A business that makes its own products or buys a product from a manufacturing company to sell to its customers.

A merchandise company

What is accounting?

A system that measures the business's activities in financial terms, provides written reports and financial statements about those activities, and communicates these reports to decision makers and others.

A compound entry is:

A transaction involving more than one debit and/or credit.

What is Sole Proprietorship?

A type of business organization that has one owner. The owner is personally liable for paying the business's debts.

What is a Limited Liability Company?

A type of business organization that is owned by a few members. Members are only liable to the extent of their investment.

What account might appear in the adjusted trial balance but not in the post-closing trial balance?

Salary Expense

Every controlling account must have its own:

Subsidiary ledger

A system that measures the business's activities in financial terms, provides written reports and financial statements about those activities, and communicates these reports to decision makers and others.

The accounting system

Drawee of a check

The bank where a check drawer has his or her account.

Expenses are

The costs the company incurs in carrying on operations AND a subdivision of owners equity.

restrictive endorsement

an endorsement restricting further transfer of a check's ownership

outstanding checks

checks issued and recorded by a company that have not been paid by the bank

List the steps to prepare the worksheet:

1. Prepare the trial balance 2. Complete adjustments 3. Prepare the adjusted trial balance 4. Extend the respective totals to the income statement and balance sheet columns

Entries to customers accounts for sales are posted in the:

Accounts receivable subsidiary ledger

Which accounts are not affected by the closing process?

Assets & Liabilities

What are the threes types of endorsements?

Blank, full, restrictive

Blank endorsement

Can be endorsed by anyone.

A business owner uses a company check to pay his personal credit card bill. The correct entry to record the transaction is:

Credit cash, debit withdrawals

The balance on the rent expense account was $150. The journal entry to close the rent expense account is:

Debit income summary $150, credit rent expense $150

Samantha's design studio showed office supplies available of $1200. A count of the supplies left on hand as of June 30th was $300. The adjusting journal entry is:

Debit office supplies expense $900, credit office supplies $900

Ryan withdrew cash from the business to pay his personal cell phone bill. The expanded accounting equation changes include:

Decrease in cash and increase in withdrawals

Adjusting the supplies account will:

Decrease the total assets and increase the total expenses.

A partnership is a business which is:

Ends with the death of a partner, owned by more than one person, easy to form.

As prepaid rent is used, the asset becomes an:

Expense

What does GAAP stand for?

Generally accepted accounting principles

The entry to close income summary (net loss) was entered in reverse - income summary was debuted and Capital was credited. This error will cause:

Income summary to have a debit balance

If the debit and credit totals of a trial balance are not equal, it could be due to the following type of error:

Incorrectly calculating the debit side of the trial balance.

The process of initially recording business transactions in a journal is:

Journalizing

A credit to a liability was posted as a credit to an expense account. This error would cause:

Liabilities to be understated.

Internal control system

Procedures and methods to control a firm's assets as well as monitor its operations.

A transaction completed by Norton company caused a $4000 increase in both the total assets and total liabilities. This transaction could have been:

Purchase of office equipment for $12,000, paying $8,000 cash with the rest on account.

If a trial balance is not equal, you should first:

Re-add the trial balance and calculate the difference

Name something that would not appear on the balance sheet?

Rent expense

Which accounts are affected by the closing process?

Revenue, Income Summary, Expenses, Withdrawals and Capital

Payee of a check

The party to whom a check is written

Drawer

The person who writes a check.

bank reconciliation

The process of reconciling the checkbook balance given on the bank statement.

If prepaid rent has been debited, it is likely that:

The rent was paid for three months in advance.

Endorsement

The signing of stamping of ones name on the back left hand side of the check

deposits in transit

a deposit recorded by the company but not yet by its bank

deposit slip

a form provided by a bank for use in depositing money or checks into a checking account

bank statement

a report sent by the bank to a depositor showing the status of his or her account

full endorsement

a signature transferring a check to a specific person, firm, or bank

full endorsement

allows you to transfer a check to another person