Accounting Midterm

Credit terms 2/10 n/30 are interpret as:

2% discount if payed in 10 days or the balance is due in 30 days

Adjusting entree?

Affect both income statement and balance sheet accounts.

If you purchase equipment $4,500 on credit, the effect on the account equation would be?

Assets increase $4,500 and Liabilities increase $4,500

The accounting equation is:

Assets= Liabilities/equity

A company lists of accounts and the identification numbers assigned to each account is?

Chart of accounts

The inventory turnover ratio is calculated as

Cost of Good sold divided by average merchandise inventory

Merchandise inventory:

Current Asset

Which of the following assets does not depreciate?

Land

Which of the following is classified as a current asset?

Office Supplies

Statements that show financial as if proposed transactions had already occurred are called

Pro forma statements

True or False Cash withdrawn by the owner of a proprietorship for personal expenses as a business expense?

True

True or False Fiscal year refers to accounting period that spans for 52 weeks?

True

Balance sheet lists:

Types and amounts of Assets, Liabilities, and Equity as a specific date.

Physical counts of inventory

needed to adjust to inventory available

True or False Accounting system captures data about transactions classified records and records data?

true