Accounting Final Exam

A business form used to record details affecting payments made to an employee is a(n) (A) employee earnings record. (B) payroll journal. (C) employee accounts payable record. (D) tax withholding form.

A

A state tax used to pay benefits to unemployed workers is (A) state unemployment tax (B) medicare tax (C) social security tax (D) unemployment tax

A

An employee working with an account can trace a transaction back to the correct journal by using information in the (A) Post. Ref. Column. (B) Item column. (C) Purch. No. Column. (D) Vendor column

A

Depreciation expense is calculated using all of the following amounts except (A) fair market value. (B) estimated salvage value. (C) estimated useful life. (D) original cost.

A

Generally, a business removes a plant asset from use and disposes of it A. when the asset is no longer usable B. at the end of each fiscal year C. when a profit can be made on the disposal D. when the asset is three years old

A

One way to increase gross profit on sales is to a. increase sales revenue. b. increase cost of merchandise sold. c. decrease sales revenue. d. decrease expenses.

A

T/F: The procedure for transferring information from a journal entry to a ledger account is a. posting b. journalizing c. file maintenance d. none of theses

A

The accounts that appear on the post-closing trial balance are (A) assets, liabilities, and owner's capital. (B) revenue, expenses, and owner's drawing. (C) all accounts in the chart of accounts. (D) all temporary accounts.

A

The entry to establish a $200.00 petty cash fund is (A) debit Petty Cash, $200.00, credit Cash, $200.00, (B) debit Cash, $200.00; credit petty cash $200.00 (C) debit pttey cash, $200.00 credit miscelaneous expense $200.00 (D) debit Miscellaneous expense, $200.00; credit cash $200.00

A

The source document for paying state unemployment tax is (A) a check. (B) a receipt. (C) a memorandum. (D) none of these.

A

a periodic inventory conducted by counting, weighing or measuring items of merchandise on hand. (A) physical inventory(B) inventory certification (C) Perpetual Inventory (D) Audit verification

A

A company's cost of merchandise sold increased by 6.7% over the prior year. Management (A) considers this to be an unfavorable trend. (B) cannot evaluate this change without knowing the change in sales. (C) should reduce the amount of merchandise purchased during the next year. (D) should reduce operating costs to maintain a constant operating margin.

B

A purchase of merchandise for cash would be posted (A) individually to Purchases and individually to Accounts Payable. (B) individually to Purchases. (C) as part of a column total to Purchases. (D) as part of column totals to Purchases and Accounts Payable

B

A return of merchandise to the vendor results in a (A) debit to Purchases. (B) credit to Purchases Returns and Allowances. (C) credit to Purchases. (D) debit to Purchases Returns and Allowances.

B

Accounts used to accumulate information from one fiscal period to the next (A) expense accounts (B) permanent accounts (C) revenue accounts (D) temporary accounts

B

Gross margin is also referred to as (A) earnings per share (B) gross profit margin (C) operating margin (D) rate of return on sales

B

In general, employers are required to pay state unemployment taxes (A) monthly. (B) during the month following each calendar quarter. (C) annually. (D) none of these.

B

The amount on the employee earnings record used to determine if certain payroll taxes apply to an employee's earnings is (A) net pay. (B) accumulated earnings. (C) gross earnings. (D) social security taxes.

B

The date on a monthly income statement prepared on April 30 is written as (A) April 30, 20--. (B) For Month Ended April 30, 20--. (C) 20--, April 30. (D) none of these.

B

The total amount of depreciation expense that has been recorded since the purchase of a plant asset is called (A) net realizable value (B) accumulated depreciation. (C) book value (D) salvage value

B

The withholding allowances of an employee affect (A) social security tax withheld. (B) federal income tax withheld. (C) federal unemployment tax owed. (D) state unemployment tax owed.

B

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 area. posting b. doing file maintenance c. journalizing d. none of these

B

When the owner invests cash in a business, the owner's capital account is (A) decreased by a credit (B) increased by a credit (C) increased by a debit (D) decreased by a debit

B

When the total expenses are greater than the total revenue,a. the income summary account has a credit balance.b. the income summary account has a debit balance.c. debits equal credits.d. none of these.

B

A customer notifies the vendor that purchased merchandise is damaged and cannot be sold at the normal price. Any credit granted to the customer would be called a (A) sales return (B) purchases allowance (C) sales allowance (D) none of these

C

Information needed to prepare a balance sheet's Assets section is obtained from a work sheet's Account Title column and (A) Income Statement Debit column (B) Income Statement Credit column (C) Balance Sheet Debit column (D) Balance Sheet Credit column.

C

Operating margin is also referred to as (A) earnings per share (B) operating income (C) rate of return on sales (D) gross margin

C

Since contra accounts are offsets to their related accounts, contra account normal balances area) debits.b) credits.c) opposite the normal balances of their related accounts.d) the same as the normal balance of their related accounts.

C

The book value of a plant asset is its original cost (A) minus salvage value (B) plus accumulated depreciation (C) minus accumulated depreciation (D) plus salvage value

C

The financial statement that reports the par value of the stock is (A) an income statement. (B) a balance sheet. (C) a statement of stockholders' equity. (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

Each employee name is listed in a payroll register along with ____. A. employee number B. marital status C. withholding allowance D all of these

D

GAAP requires that the cost of a plant asset be... A. expensed over the plant asset's legal life B. expensed over ten years C. totally expensed in the first year of the plant asset's life D. expensed over the plant asset's usual life

D

If any kind of error is made in preparing a check, (A) VOID should be written on the check. (B) VOID should be written on the check stub. (C) a new check should be prepared. (D) all of the above.

D

In the accounting cycle, closing entries are journalized and posted (A) before the adjusted trial balance is prepared (B) after the adjusted trial balance is prepared (C) after adjusting entries are posted to the general ledger (D) after the financial statements are prepared

D

Most businesses receive cash for credit and debit card sales A. on the first day of the next month B by the start of the next business day C. at the end of the business day D. within 2-3 days after batching out

D

Supplies bought for use in a business are recorded in the ______. a. supplies expense account b. cash account c. purchases account d. supplies account

D

The amount of a dividend is normally calculated as (A) the balance of Retained Earnings (B) a percentage of the balance in Common Stock (C) the number of shares outstanding multiplied by a percentage dividend rate (D) the number of shares outstanding multiplied by a dollar amount per share

D

income summary is a(n) (A) permanent account (B) liability account (C) asset account (D) temporary account

D

T/F: Credit allowed for part of the purchase price of merchandise that is not returned does not change the balance of the customer's accounts payable.

False

T/F: Depreciation expense is recorded on all plant assets.

False

T/F: Each asset account has a normal credit balance.

False

T/F: Interest expense is a financing expense that is listed in the chart of accounts as an operating expense.

False

T/F: Only accounts with a balance are listed in the Trial Balance columns of a work sheet.

False

T/F: A post-closing trial balance verifies the equality of debits and credits in a general ledger after the closing entries are posted.

True

T/F: Modifying a benchmark is an option for a business that fails to achieve its benchmark.

True

T/F: Transactions are recorded in a journal in chronological order.

True

T/F: Voided checks should be recorded in a journal

True

T/F:The difference between an asset's account balance and its related contra account is called book value.

True

a legal document that identifies basic characteristics of a corporation

articles of incorporation

An account that reduces a related account on a financial statement.

contra account

an account in a general ledger that summarizes all accounts in a subsidiary ledger

controlling account

an organization with the legal rights of a person which many persons or other corporations may own

corporation

The maximum outstanding balance allowed to a customer by a vendor

credit limit

T/F: The balances of the liability accounts must be reduced to zero to prepare the accounts for the next period.

false

T/F: The gross profit margin gives investors the best indication of how effectively a business is earning a profit from its normal business operations.

false

A journal amount column that is not headed with an account title

general amount column

The retail price listed in a catalog or on an Internet site

list price

A merchandise inventory evaluated at the end of a fiscal period.

periodic inventory

A form requesting that a vendor sell merchandise to a business

purchase order

A form requesting the purchase of merchandise

requisition

listing of vendor accounts, account balances, and the total amount due to all vendors

schedule of accounts payable

To rate the ability of a business to pay its current and long-term liabilities, investors use (A) solvency ratios. (B) profitability ratios. (C) liquidity ratios. (D) market ratios.

solvency ratios

A journal used to record only one kind of transaction

special journal

An agreement between buyer and seller about payment for merchandise

terms of sale

A reduction in the list price granted to customers

trade discount

T/F: Cash is always proved at the end of a month.

true

T/F: The investment income in a Roth IRA is not subject to federal income taxes when withdrawn.

true

T/F:The account Allowance for Uncollectible Accounts has a normal credit balance

true

a merchandising business that buys and resells merchandise primarily to other merchandising businesses

wholesale merchandising business