Accounting II Semester Final

Income Summary:

is a temporary account; summarizes revenues and expenses and transfers the balance to Capital

Gross profit less operating expenses equals

net income from operations

If fees earned has been credited, it is most likely that

services were provided

The income statement is prepared from the

worksheet

What is X-cel Company's net income or net loss if it had Revenue of $1,800, Salary Expense of $500, Utility Expense of $250, and Withdrawals of $5000 During October?

$1050 net income

An employee has gross earnings of $2000 with withholdings of 6.2% FICA-OASDI, 1.45% FICA-Medicare, $100 for federal income tax and $30 for state income tax. How much is the gross pay?

$2000.00

If Net Sales is $10,000, Cost of Goods Sold is $5,000 and Operating Expenses are $1,000, what is the Net Income for Operations?

$4,000

If the balance of supplies at the start of the month was $900 and at the end of the month you had $450 on hand, the adjustment for the Supplies would be:

$450

If the employee has $500 withheld from their check for federal income tax, what is the amount that the employer would need to pay?

$500

Carla's Carpet reports gross sales of $80,000. If sales returns and allowances are $20,000 and sales discounts are $3,000 what are the net sales?

$57,000

On October 31, Janoch's Dog Kennel purchases $900 of merchandise on account from the Gangster Company. The goods were shipped F.O.B. shipping point. The freight charge of $110 was paid by Gangster Company and added to the invoice. The amount to record in the Merchandise Inventory is

$900

The normal balance for the Purchases Returns and Allowances is

A credit

Sheila's Hair salon was moving and sold furniture that was no longer needed for cash. The entry would include:

A credit to Furniture

A list of creditors with balances owed is called

A schedule of accounts payable

Steve's Book Review billed customers $550. The journal entry to record this transaction is

Accounts Receivable, debit $550; Editing Fees Earned, Credit $550

A characteristic of Sales Returns and Allowances is that:

All of these answers are correct

The first step of the accounting cycle is

Analyzing business transactions

Closing entries:

Are posted to the general ledger

Prepaid Insurance would be found on which of the following financial statements?

Balance Sheet

Which item appears on both the balance sheet and the statement of owner's equity?

Capital

The type of business organization that can continue indefinitely is known as a:

Corporation

The arrangements between buyer and seller as to when payments for merchandise are to be made are called:

Credit terms

In what category on a classified balance sheet is Accounts Receivable found?

Current Assets

Betsy's pottery sold 200 tiles at $25.00 each to a charge customer, terms 1/10, n/30. Which entry is required to record this transaction?

Debit Accounts Receivable $5,000; credit Tile Sales $5,000

On July 1, Villa's Construction paid six months' insurance in advance. The journal entry to record this transaction is

Debit Prepaid Insurance; Credit Cash

The adjusting entry to record the expired rent would be to:

Debit Rent Expense; credit Prepaid Rent

Tim received $3,000 in advance for renting part of his building for 4 months. What is the entry to record the adjustment after one month has passed?

Debit Unearned Rent, credit Rental Income

On November 1, Bob's Copy Shop received $4,800 for two years' rent in advance from Garrison Company. On November 30 the adjusting entry that Bob's Copy Shop should make is to

Debit Unearned Rent; credit Rental Income $200

The beginning balance in the Computers account was 3,000. The company purchased an additional 1000 worth of computers. The ending balance in the account is

Debit of $4,000

The entry to record a payment on a $850 account with the 2% discount period would include a

Debit to Accounts Payable for $850

The balance in the T. Smith withdrawals account was $3000. The entry to close the account would include a:

Debit to T. Smith, Capital, $3000

Using a Perpetual inventory system, the purchase of merchandise on account would include a:

Debit to merchandise inventory and a credit to Accounts Payable

The entry establishing a $220 petty cash fund would include a:

Debit to petty cash for $220

Wages and Salaries Expense is:

Equal to gross pay

When using accrual accounting revenue should be recorded when

It's earned

Business transactions are first recorded in the:

Journal

Which type of account would NOT be reported on the income statement?

Liabilities

Assets are equal to:

Liabilities+Owner's Equity

What type of account is Salaries Payable?

Liability

Discounts are taken on:

Merchandise Inventory after returns are taken out

A nonsufficient funds check was returned to your company. How does the bank treat this on your bank statement?

None of these answers are correct

What inventory method is used when the inventory balance is updated only at the end of the accounting period?

Periodic

Gross profit equals:

Sales- Sales Returns and Allowances- Sales discounts- Cost of goods sold

How would outstanding checks be handled when reconciling the ending cash balance per the bank statement to the correct adjusted cash balance?

They would be subtracted from the balance per the bank

A petty cash fund is set up:

To pay for small expenses

Insurance paid in advance by employers to protect their employees against loss due to injury or death incurred during employment is:

Workers' compensation insurance

As supplies are used, they become:

an expense

Prepaid Rent Expense is considered to be a(n):

asset

The right side of any account is the:

credit side

The adjusting entry for accrued salaries is to

debit Salaries Expense; credit Salaries payable