Accounting Semester 1 Final

When cash is paid for supplies, (A) Supplies is increased. (B) Supplies is credited. (C) the balance of Supplies is decreased. (D) none of these. (Chapter 3)

A

When cash is received from sales, the amount is recorded in the (A) Sales Credit column and Cash Debit column. (B) Sales Debit column and Cash Credit column. (C) General Credit column and Cash Debit column. (D) General Debit column and Cash Credit column. (Chapter 3)

A

A petty cash fund is always replenished (A) daily. (B) weekly. (C) at the end of the month. (D) none of these. (Chapter 5)

C

If an amount is written in an incorrect column of a work sheet, the error should be erased and the amount should be written in the correct column. (Chapter 6)

T

If the Trial Balance columns are not equal and the difference can be evenly divided by 9, then the error most likely is a transposed number. (Chapter 6)

T

Net income on a work sheet is calculated by subtracting the Income Statement Debit column total from the Income Statement Credit column total. (Chapter 6)

T

The amount of the supplies used during a fiscal period is an expense. (Chapter 6)

T

Two financial statements are prepared from the information on the work sheet. (Chapter 6)

T

12. Withdrawals are assets taken out of a business for the owner's personal use. (Chapter 1)

True

After each transaction, the accounting equation must remain in balance. (Chapter 1)

True

An expense is a decrease in owner's equity resulting from the operation of a business. (Chapter 1)

True

Detailed information about changes in owner's equity is needed by owners and managers to make sound business decisions. (Chapter 1)

True

Keeping separate financial records for a business and for its owner's personal belongings is an application of the Business Entity accounting concept. (Chapter 1)

True

The most common type of withdrawal by an owner from a business is the withdrawal of cash. (Chapter 1)

True

When an owner withdraws cash from the business, the transaction affects both assets and owner's equity. (Chapter 1)

True

When items are bought and paid for at a future date, another way to state this is to say these items are bought on account. (Chapter 1)

True

When two asset accounts are changed in a transaction, there must be an increase and a decrease. (Chapter 1)

True

The accounting equation is most often stated as Assets + Liabilities = Owner's Equity. (Chapter 1)

False

Adjusting entries must be posted to the general ledger accounts. (Chapter 6)

T

A lost check with a blank endorsement on it can be cashed by (A) anyone who has the check. (B) only the person whose name follows the words "Pay to the order of." (C) only the person who endorsed the check. (D) no one. (Chapter 5)

A

After the closing entries are posted, the owner's capital account balance should be the same as shown (A) on the balance sheet for the fiscal period. (B) in the work sheet's Balance Sheet Debit column. (C) in the work sheet's Balance Sheet Credit column. (D) in the work sheet's Income Statement Debit column. (Chapter 8)

A

An endorsement on the back of a check consisting only of a signature is a(n) (A) blank endorsement. (B) special endorsement. (C) restrictive endorsement. (D) incorrect endorsement. (Chapter 5)

A

Assuring that financial statements contain all information necessary to understand a business's financial condition is an application of the accounting concept (A) Adequate Disclosure. (B) Going Concern. (C) Objective Evidence. (D) Accounting Period Cycle. (Chapter 7)

A

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. (Chapter 4)

A

Information needed to prepare an income statement's Expense 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. (Chapter 7)

A

On each journal page, the date is written (A) for each entry. (B) only for the first entry. (C) on the first line of each column. (D) none of these. (Chapter 3)

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. (Chapter 8)

A

The amount of net income calculated on an income statement is correct if (A) it is the same as the net income shown on the work sheet. (B) debits equal credits. (C) it is the same as the net income shown on the balance sheet. (D) none of these. (Chapter 7)

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. (Chapter 4)

A

The formula for calculating the net income ratio is (A) net income divided by total sales. (B) total sales divided by total expenses. (C) total sales minus total expenses divided by net income. (D) none of these. (Chapter 7)

A

The left side of a T account is the (A) debit side. (B) credit side. (C) normal balance side. (D) equity side. (Chapter 2)

A

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. (Chapter 4)

A

When cash is paid for rent, the amount is recorded in the (A) Cash Credit column and General Debit column. (B) Sales Credit column and General Debit column. (C) General Credit column and Cash Debit column. (D) General Credit column and Sales Credit column. (Chapter 3)

A

When cash is short, the entry to replenish petty cash includes a (A) debit to Cash Short and Over. (B) credit to Cash Short and Over. (C) debit to Petty Cash. (D) credit to Miscellaneous Expense. (Chapter 5)

A

Accounts used to accumulate information from one fiscal period to the next are (A) revenue accounts. (B) permanent accounts. (C) temporary accounts. (D) expense accounts. (Chapter 8)

B

After closing entries are posted, the balance in the owner's drawing account should be (A) a debit. (B) zero. (C) a credit. (D) none of these. (Chapter 8)

B

An endorsement on the back of a check consisting of the words "Pay to the order of" and a new check owner's name is a (A) blank endorsement. (B) special endorsement. (C) restrictive endorsement. (D) deposit endorsement. (Chapter 5)

B

An income statement reports a business's (A) financial condition over a specific period of time. (B) financial progress over a specific period of time. (C) financial condition on a specific date. (D) financial progress on a specific date. (Chapter 7)

B

If an amount is recorded on the side of a T account opposite the normal balance side, the account balance is (A) increased. (B) decreased. (C) unaffected. (D) correct. (Chapter 2)

B

If both amounts on a journal line are recorded in special amount columns, (A) only one of the amounts is posted individually. (B) neither amount is posted individually. (C) both amounts are posted individually. (D) all of these. (Chapter 4)

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. (Chapter 7)

B

The entry to record payment of cash to the owner as a withdrawal of equity is (A) debit Cash, credit Drawing. (B) debit Drawing, credit Cash. (C) debit Cash, credit Accounts Payable. (D) none of these. (Chapter 3)

B

The normal balance side of a liability account is the (A) debit side. (B) credit side. (C) decrease side. (D) left side. (Chapter 2)

B

The normal balance side of any revenue account is the (A) debit side. (B) credit side. (C) left side. (D) none of these. (Chapter 2)

B

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. (Chapter 4)

B

When an owner invests cash in a business, the owner's capital account is (A) increased by a debit. (B) increased by a credit. (C) decreased by a debit. (D) decreased by a credit. (Chapter 2)

B

When the total expenses are greater than the total revenues, (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. (Chapter 8)

B

A single line ruled across the journal's amount columns indicates (A) the date is the last day of the month. (B) the totals have been verified as correct. (C) that columns are to be totaled. (D) none of these. (Chapter 3)

C

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. (Chapter 4)

C

Cash Short and Over is classified as a(n) (A) asset. (B) liability. (C) expense. (D) equity. (Chapter 5)

C

Each time cash or checks are placed in a bank account, the customer prepares a (A) signature card. (B) check. (C) deposit slip. (D) none of these. (Chapter 5)

C

Income Summary is a(n) (A) asset account. (B) liability account. (C) temporary account. (D) permanent account. (Chapter 8)

C

Increases in a revenue account are shown on a T account's (A) debit side. (B) left side. (C) credit side. (D) none of these. (Chapter 2)

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. (Chapter 7)

C

Temporary accounts begin each new fiscal period with a (A) debit balance. (B) credit balance. (C) zero balance. (D) balance equal to the net income. (Chapter 8)

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. (Chapter 4)

C

When $1,500 cash is received on account, (A) Sales is increased with a credit and Cash is increased with a credit. (B) Accounts Receivable is increased with a debit and Cash is increased with a credit. (C) Accounts Receivable is decreased with a credit and Cash is increased with a debit. (D) Accounts Receivable is decreased with a debit and Cash is increased with a debit. (Chapter 2)

C

When a business pays cash on account, a liability account is (A) increased by a debit. (B) increased by a credit. (C) decreased by a debit. (D) decreased by a credit. (Chapter 2)

C

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. (Chapter 4)

C

When cash is paid on account, the amount is recorded in the (A) Accounts Payable Debit column and Cash Credit column. (B) Sales Credit column and Cash Debit column. (C) General Debit column and Cash Credit column. (D) Cash Debit column and General Credit column. (Chapter 3)

C

When cash is received on account, the amount is recorded in the (A) Sales Credit column and Cash Debit column. (B) General Debit column and Cash Credit column. (C) General Credit column and Cash Debit column. (D) Accounts Receivable Credit column and Cash Debit column. (Chapter 3)

C

When services are sold on account, the amount is recorded in the (A) Accounts Receivable Debit column and Cash Credit column. (B) General Credit column and Cash Debit column. (C) General Debit column and Sales Credit column. (D) General Debit column and Accounts Payable Debit column. (Chapter 3)

C

If an error is recorded in a journal entry, (A) cancel the error by drawing a neat line through the error. (B) correct the entry by writing the correct item above the canceled error. (C) do not erase the incorrect item. (D) all of these. (Chapter 3)

D

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. (Chapter 4)

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. (Chapter 5)

D

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. (Chapter 4)

D

Preparing financial statements at the end of each monthly fiscal period is an application of the accounting concept (A) Adequate Disclosure. (B) Going Concern. (C) Objective Evidence. (D) Accounting Period Cycle. (Chapter 7)

D

The entry to establish a $200.00 petty cash fund is (A) debit Petty Cash, $200.00; credit Miscellaneous Expense, $200.00. (B) debit Cash, $200.00; credit Petty Cash, $200.00. (C) debit Miscellaneous Expense, $200.00; credit Cash, $200.00. (D) debit Petty Cash, $200.00; credit Cash, $200.00. (Chapter 5)

D

The journal entry to close Income Summary when there is a net income is (A) debit Sales; credit Income Summary. (B) debit owner's capital; credit Income Summary. (C) debit owner's capital; credit Sales. (D) debit Income Summary; credit owner's capital. (Chapter 8)

D

The last step in the accounting cycle is to (A) record transactions in a journal. (B) prepare a work sheet. (C) journalize and post closing entries. (D) prepare a post-closing trial balance. (Chapter 8)

D

When cash is received from sales, the change in the owner's equity is usually recorded (A) on the debit side. (B) directly in the owner's capital account. (C) as interest revenue. (D) in a separate revenue account. (Chapter 2)

D

When preparing a balance sheet, the amount of owner's capital is calculated using amounts obtained from (A) the general ledger. (B) the income statement. (C) the journal. (D) none of these. (Chapter 7)

D

Many businesses choose a one-year fiscal period that ends during a period of high business activity. (Chapter 6)

F

Only accounts with a balance are listed in the Trial Balance columns of a work sheet. (Chapter 6)

F

The accounting concept Consistent Reporting is being applied when a word processing service business reports revenue per page one year and revenue per hour the next year. (Chapter 6)

F

When the Income Statement Debit column total is greater than the Income Statement Credit column total on a work sheet, the business has a net income. (Chapter 6)

F

11. Payments for advertising, equipment repairs, utilities, and rent are liabilities. (Chapter 1)

False

A negative amount for net worth would reflect more debt than assets, something a creditor would favor. (Chapter 1)

False

A transaction for the sale of goods or services results in a decrease in owner's equity. (Chapter 1)

False

A withdrawal is an expense. (Chapter 1)

False

Business ethics are the principles of right and wrong that guide an individual in making decisions. (Chapter 1)

False