accounting 4.0
Component percentage of $8,000 rent expense when sales is $50,000?
16% or 20%
. The procedure for transferring information from a journal entry to a ledger account is (A) posting. (B) journalizing. (C) file maintenance. (D) none of these.
A
The first digit in the account number 520 means that the account is in the (A) expense division of the general ledger. (B) revenue division of the general ledger. (C) liability division of the general ledger. (D) asset division of the general ledger.
A
the second step in the posting procedure is to write the (A) entry date in the Date column of the account. (B) journal page number in the Post. Ref. column of the account. (C) account number in the Post. Ref. column of the journal. (D) entry amount in the Debit or Credit column of the account.
B
Determining that the amount of cash agrees with the accounting records is (A) posting. (B) journalizing. (C) proving cash. (D) none of these.
C
On the Balance Sheet, Capital may be calculated as:
Capital - Drawing - Net Loss
If an error requires a correcting entry, the source document describing the correction to be made (A) depends on the type of error made. (B) is a check stub. (C) depends on the type of correcting entry. (D) is a memorandum.
D
To close Drawing,
Debit Capital
Likely to appear in the Post. Ref. column of the Cash ledger
G1
What account is used to adjust Prepaid Insurance?
Insurance Expense
Income Statement accounts with credit balances
Revenue
Which account does not appear on a Post-Closing Trial Balance?
Utilities expense
Reporting income when it is earned and expenses when they are incurred.
accrual basis of accounting
Reporting income when the cash is received and expenses when the cash is paid.
cash basis of accounting
Beginning Prepaid Insurance balance is $4,500 and ending balance is $3,300. The adjusting entry is:
debit Insurance Expense and credit Prepaid Insurance $1,200
Income Statement accounts with debit balances
expenses
. The balance of the Supplies account plus the value of the supplies on hand equals the up-to-date balance of the Supplies account.
false
A journal shows in one place all the changes in a single account.
false
Assets, Liabilities, and Capital balances are reduced to zero at the end of the fiscal period.
false
Errors discovered after an entry is posted may be corrected by ruling through the item.
false
If an amount is written in an incorrect column on a work sheet, a line should be drawn through the incorrect amount and the correct amount should be written in the correct column.
false
If the payment of cash for rent was journalized and posted in error as a debit to Miscellaneous Expense instead of Rent Expense, the correcting entry will include a credit to Cash.
false
Journals, ledgers, and work sheets are considered permanent records.
false
The only use for the Post. Ref. column of a journal and general ledger is to indicate which entries in the journal still need to be posted if posting is interrupted.
false
The posting reference should always be recorded in the journal's Post. Ref. column before amounts are recorded in the ledger.
false
The steps for posting are to write the date, the journal page number, the amount, and the balance.
false
The two steps for opening an account are writing the account title and recording the balance.
false
Total revenue greater than total expenses is a net loss.
false
if the difference between the totals of Debit and Credit columns on a work sheet can be evenly divided by 9, then the error is most likely in addition.
false
A fiscal period consisting of 12 consecutive months.
fiscal year
A financial statement showing the revenue and expenses for a fiscal period.
income statement
The difference between total revenue and total expenses when total revenue is greater.
net income
The difference between total revenue and total expenses when total expenses are greater.
net loss
On worksheet, Income Statement credit total is $2,150 and Income Statement debit total is $2,400. The company has
net loss of 250
Cash paid for an expense in one fiscal period that is not used until a later period.
prepaid expenses
Purpose of the Trial Balance column of the work sheet:
prove debits equal credits
To close the sales account, debit ________.
sales:Credit Income Summary
A proof of the equality of debits and credits in a general ledger.
trial balance
A group of accounts is called a ledger.
true
Adjusting entries must be posted to the general ledger accounts.
true
All corrections for posting errors should be made in a way that leaves no question as to the correct amount.
true
If the Trial Balance columns are not equal and the difference is $50.00, the error most likely is a $25.00 amount written in the wrong column.
true
If the previous account balance and the current entry posted to an account are both debits, the new account balance is a debit.
true
Making adjustments to general ledger accounts is an application of the Matching Expenses with Revenue accounting concept
true
Net income on a work sheet is calculated by subtracting the Income Statement Debit column total from the Income Statement Credit column total.
true
The Cash account is the first asset account and is numbered 110.
true
The account number is placed in the Post. Ref. column of the journal as the last step in the posting procedure.
true
The procedure of arranging accounts in a general ledger, assigning account numbers, and keeping records current is known as file maintenance.
true
The two accounts affected by the adjustment for supplies are Supplies and Supplies Expense.
true
Two financial statements are prepared from the information on the work sheet.
true
When posting is complete, the Post. Ref. column in the General Journal is completely filled in with account numbers.
true
A columnar accounting form used to summarize the general ledger information needed to prepare financial statements.
work sheet
An account number in the journal's Post. Ref. column shows (A) the date of the entry. (B) that work on that journal page is completed. (C) the account to which an amount is posted. (D) none of these.
C
The last step in the posting procedure is to write the (A) entry date in the Date column of the account. (B) journal page number in the Post. Ref. column of the account. (C) account number in the Post. Ref. column of the journal. (D) entry amount in the Debit or Credit column of the account.
C
Posting references in a journal are (A) the first item recorded when posting. (B) always placed in an account's Post. Ref. column. (C) not necessary. (D) none of these.
D
To close Income Summary when there is a Net Loss,
Debit Owner's Equity Capital
To close Sales,
Debit Sales
Journal entries recorded to update general ledger accounts at the end of a fiscal period.
adjusting entries
Changes recorded on a work sheet to update general ledger accounts at the end of a fiscal period.
adjustments
A financial statement that reports the value of a business's assets, liabilities, and owner's equity on a specific date.
balance sheet
Financial statement that shows assets, liabilities, and owner's equity on a specific date.
balance sheet
When accounts are arranged in a general ledger, account numbers are assigned, and the chart of accounts is kept up to date, the accounting personnel are (A) posting. (B) journalizing. (C) doing file maintenance. (D) none of these.
c
Beginning Supplies balance is $2,300 and ending Supplies balance is $2,200. The adjusting entry is:
debit Supplies Expense and credit Supplies $100
Purchase supplies on account from Owen Office Supply for $350
debit Supplies, $350; credit Accounts Payable/Owen Office Supply, $350
The length of time for which a business summarizes financial information and reports its financial performance.
fiscal period
When adding a new expense account between accounts numbered 510 and 520, the new account is assigned the account number 515.
true
If posting is interrupted, the accounting personnel know to resume posting (A) on the line with a blank Post. Ref. column in the journal. (B) at the beginning of the journal page. (C) the next day. (D) all of these.
A
