Accounting Comp - True/False
If income is less than expenses, the result is a net loss
True
A Post Closing Trial Balance is made just prior to posting the closing entries
false
A Profit and Loss Statement is a report that shows income, expenses, and net worth of a business
false
A Trial Balance is a report that shows the financial condition of a business
false
A cash purchase is recorded in the Purchases Journal
false
A ledger is a book of original entry
false
A person to whom debt is owed is called a debtor
false
A written promise for a customer to pay the business a sum of money at a future date is an Accounts Receivable
false
A written promise to pay a creditor an amount in the future is called an Accounts Payable
false
Accounts Payable represents all those people that owe your business money
false
Accounts Receivable of a business represent all those people to whom a business owes money
false
Accounts payable are exactly the same as notes payable
false
Accounts with creditors are called Accounts Receivable
false
Another term for Balance Sheet is Profit and Loss Statement
false
Another term for fixed liability is current liability
false
Any consecutive 12 month period is a physical year
false
Assets are all things a funeral director owes
false
Book Value is the cost of forms and records needed for recording transactions
false
Bookkeeping and accounting a synonymous terms
false
Canceled checks are of no value and should be thrown away
false
Cash transactions are recorded in the Cash Receipts Journal
false
Cost is the amount a fixed asset will sell for after it no longer has any use within the business
false
FICA is abbrev for "First In Credit Assets"
false
FOB is the abbrev for "footing on balance"
false
If the assets of a business total $60,000 and liabilities are $30,000, the owner's equity would total $90,000
false
Property of relatively permanent nature used in the operation of a business and not intended for resale are known as current assets
false
The abbrev. for Debit is Dt.
false
The amount of pay after deductions have been subtracted is called gross pay
false
The amount of wages paid to employees is shown on the Balance Sheet
false
The difference between the two sides of an account is called an account number
false
The funeral director's original investment is recorded by debiting capital and crediting cash
false
The left side of a standard account is called the credit side
false
The liabilities of a business equal $30,000 and the owner's equity is $40,000. Your assets are $10,000.
false
The one to whom a sale has been made is the drawee
false
The process of recording business transactions in a journal is called footing
false
The terms "income" and "overhead" are synonymous
false
The totaling of a column in a journal or ledger account is called posting
false
The two most important formal financial statements are the Income Statement and the Trial Balance
false
To establish a petty cash fund, you debit cash and credit petty cash
false
To increase the liability account, you debit the account
false
Transferring information from the journal to the ledger is called footing
false
When a worksheet is prepared, it's not necessary for the business to prepare a Profit and Loss Statement or Balance Sheet
false
A bank draft is a check that is drawn by one bank on another in which it has funds deposited
true
A bill is a statement indicating charges for goods/services
true
A check drawn by a bank on its own funds and signed by the cashier is known as a cashier's check
true
A check that a bank refuses to pay is described a dishonored check
true
A debtor is a business/individual who owes a debt
true
A fiscal year is any consecutive 12 month period ending on the last say of any month except December
true
A partnership is a business that is owned by 2+ individuals
true
A person who signs a check/draft ordering payment to be made is the drawer
true
A person/concern, usually a bank, that has been ordered to make payment on a check/draft is a drawee
true
Accounts Payable will normally have a credit balance
true
Accumulated Depreciation is an example of a contra asset account
true
All expense and revenue accounts are summarized and closed at the end of an accounting period
true
All revenue accounts will normally have a credit balance
true
An Income Statement shows net income or loss for a given period of time
true
An account is a device for recording the changes in the fundamental accounting elements
true
An entry on the debit side of an asset account records an increase for that asset
true
Another term for Owner's Equity is Net Worth
true
Another term for Profit and Loss Statement is Income Statement
true
Any activity of an enterprise which involves the exchange of values is referred to as a transaction
true
Bookkeeping is the recording phase of the accounting process
true
COD is abbrev for "Collection On Delivery"
true
Defer means to delay until later date
true
EOM is abbrev for "End of Month"
true
Expense means a decrease in owners equity
true
Expenses for an accounting period will appear on the Income Statement
true
If the footings of an account are equal in amount, the account is said to be balanced
true
In a personal service enterprise, the chief source of revenue is derived from services rendered
true
Negotiable instruments refers to checks, notes, and other business papers that may be transferred by endorsement
true
Net Worth has the same meaning as Owner's Equity
true
One to whom a sale has been made is a vendee
true
One who has made a sale is called a vendor
true
Prepaid Expenses (ie insurance) are classified as asset accounts
true
Proprietorship, net worth, and capital are all synonymous terms for owner's equity
true
Recording expenses when they're paid and income when it's received describes the cash basis of accounting
true
Revenue and expense accounts are actually temporary owner's equity accounts
true
The Statement of Financial Condition is a report that shows assets, liabilities, and net worth of a business
true
The book of original entry in accounting is called a Journal
true
The capital account will normally have a credit balance
true
The cash basis of accounting is used primarily by a personal service enterprise
true
The chart of accounts us usually found at the beginning of the ledger
true
The debits and credits in any journal must always be equal
true
The decrease in the value of fixed assets due to normal wear and tear is called depreciation
true
The difference between gross sales and sales returns and allowances is net sales
true
The main purpose of petty cash is to eliminate the need to write checks for small amounts
true
The most common reason checks are returned unpaid is due to insufficient funds
true
The net worth of a business is the difference between assets and liabilities
true
The person/company whose name is written on the back of a check is an endorser
true
The process of determining whether the amount of cash (on hand & in bank) is the amount that should be there according to the records is called proving cash
true
The signature of the payee/other holder placed on the back of a check/other paper is an endorsement
true
The terms "unearned income" and "deferred income" are synonymous
true
The transfer of data from the journal to ledger is called posting
true
The two ways in which owner's equity can be increased are by revenue and investments
true
To increase the asset account, you debit the account
true
Transactions in the journal are recorded in chronological order
true
Transactions involving revenue and expenses always cause a change in the owner's equity
true
When an expense is incurred, either the assets are reduced or the liabilities are increased
true
When cash is spent in acquisition of an asset, the net worth is not affected
true
When funeral director makes a payment on a funeral coach which was purchased on credit, he would debit Accounts Payable and credit Cash
true