Compendium- ARTS

2- Owner's equity = $30,000, 3- Net income = $2,000

At the end of the month, a funeral home's assets totaled $50,000; the liabilities totaled $20,000; revenue for the month totaled $6,000; and the total of the expenses amounted to $4,000. Which of the following statements is true: 1- Owner's equity = $70,000 2- Owner's equity = $30,000 3- Net income = $2,000 4- Net loss = ($2,000)

social security

F.I.C.A. refers to

Debit office supplies and credit accounts payable

Purchase of office supplies on credit is recorded by

Double entry accounting or bookkeeping

The process of recording equal debits and credits for a single business transaction

A. accumulated depreciation

Which of the following accounts would be used to assist the accountant in an adjusting entry involving depreciation: A. Accumulated depreciation B. Automobile expense C. Automobile carry over from previous year D. Allowance for doubtful accounts

1, 2 and 4 only

Which of the following represents the difference between the total assets and the total liabilities: 1- Owner's equity 2- Net worth 3- Net income 4- Capital

B. Land

Which one of these does not qualify as a current asset: A. Cash B. Land C. office supplies D. accounts receivable

journal

a book in which the daily transactions of a business are first written is the

loss

a decrease in net worth due to excess of costs and expenses over income is

expense

a decrease in owner's equity resulting from a business transaction is a/an

payment

a disbursement is a

divident

a distribution of profits of a corporation to its stockholders as declared by the board of directors

the entry is complete

a double line under the last entry on a t account means

accounting

a language of business employed to communicate financial information based upon the recording, classification, summarization, and interpretation of financial data is called

accounts

a ledger is a book of

chart of accounts

a list of accounts that shows the arrangement of the accounts in the ledger is called

invoice

a paper showing quantity, description, prices of items, total amount of purchase, and terms of payment is a/n

payee

a person or company who will receive payment on a promissory note, check, draft or money order is called the

drawee

a person or concern, usually a bank, that has been ordered to make payment on a check or draft is called the

creditor

a person to whom a debt is owed is called a

drawer

a person who signs a check or draft ordering payment to be made is called the

$2,000

a plant asset was purchased by the funeral home costing $8,000. it has a useful life of 3 years and a salvage value of $2,000. using the straight line method of depreciation, what would be the yearly amount of depreciation?

at any time

a profit and loss statement can be prepared

depreciation

a synonym for fair wear and tear of a durable asset is

overhead

a term which is used synonymously with operating expense is

footing

a total, written in small pencil figures under the last entry in a column is the

liability account

accounts payable is a/an

asset account

accounts receivable is a/an

liabilities and capital

accounts which when credited increase

income statement

advertising expense would be reflected on the

fiscal year

an accounting year ending on some date other than December 31st is called:

increased

an entry made on the debit side of an asset account indicates that the account has been

increased

an entry made on the debit side of an expense account indicates that the account has been

decreased

an entry made on the debit side of the proprietorship accounts indicates that the accounts have been

increased

an entry on the credit side of a liability account indicates the account has been

increased

an entry on the credit side of a revenue account indicates the account has been

closed

an entry on the credit side of an expense account indicates the account has been:

decreased

an entry on the debit side of a liability account indicates the account has been

decreased

an entry on the debit side of the owner's equity indicates that the account has been

budget

an estimate of revenue and probable expense for a given period of time is a

income

an increase in proprietorship as the result of a business transaction is

income statement

another name for a profit and loss statement is

income statement

another term for profit and loss statement is:

fundamental accounting equation

assets = liabilities + owner's equity is the

fixed liabilities

debts that are not due and payable within a year are called

as a debit and a credit

double entry bookkeeping means an entry is made

decrease in owner's equity

expense means that there is a/an

note receivable

from the point of view of the business - a written promise of a customer to pay that business a sum of money at a future date is a/an:

merchandise

goods purchased for resale at a profit

intangible asset

goodwill is classified as a/an

net profit

if the total of the operating expenses section of the income statement is smaller than the total of the income section, the difference is

accrued income

income earned but not received is called

deferred income

income received but not yet earned is

income

increases in the owner's equity resulting from business operation is known as

owes

liabilities are all things a funeral director

interest

money paid for the use of money is called

vendor

one who has made a sale is called a/an

asset

property (real or personal) of monetary value owned by a business

fixed asset

property of a relatively permanent nature used in the operation of a business and not intended for resale is called

scrap or salvage value

that portion of a plant assets original cost that cannot be depreciated is called

cr

the abbreviation for "credit" is

dr

the abbreviation for "debit" is

balance sheet

the accounts payable account would be shown on the

assets and expenses

the accounts which when debited are increased

closing temporary accounts

the acronym REID (revenue, expense, income, drawing) is used when

mark-up

the amount added to the cost of an article to determine the selling price of that article is the

profit and loss statement

the amount of income from the sale of funeral services would be shown on which formal financial statement

profit and loss statement

the amount of revenue from the sale of funeral services would be shown on the

double entry

the basic accounting theory is based on

$1100

the beginning balance in the supplies account is $600. during the month an additional $800 worth of supplies were purchased. at the end of the month, an inventory of supplies found that only $300 remained on hand. what would be the amount of the adjusting entry for the supplies account

chronological order

the book of original entry is in

overhead

the cost of operating a business is called

right side

the credit side of a t account is the

left side

the debit side of a t account is the

depreciation

the decrease in the value of a fixed asset is called

gross margin

the difference between net sales and cost of goods sold

gross profit

the difference between the cost of goods sold and their selling price is called

account balance

the difference between the two sides of an account is called the

net sales

the difference between total sales and sales returns and allowances is

stockholder

the holder or person owning stock in a corporation is the

profit

the increase in net worth due to the excess of income over costs and expenses is called

closing entries

the only time the debit side of the revenue account is used is when you make

A. (Debit rent expense and credit cash)

the payment of rent by cash is recorded by which of the following? A. Debit rent expense and credit cash B. Debit cash and credit capital C. Debit accounts payable and credit cash D. Debit cash and credit rent expense

the normal operating cycle

the period of time required to purchase goods and services and turn them back into cash is called

consignee

the person or business concern to whom a shipment is made is a

profit

the primary purpose of a business is

posting

the process of recording information in a ledger is called

expenses and withdrawals of assets from the business by the owner

the proprietorship of a business may be decreased by

net income and investment of assets in the business by the owner

the proprietorship of a business may be increased by

credit side

the right side of a standard account is called the

sole proprietor

the sole owner of a business is a

accounts payable

the title of an account which would normally have a credit balance is

footing

the totaling of a column in a journal or ledger account is called

debit petty cash and credit cash

to establish a petty cash fund, one would

debit revenue and credit expense and revenue summary

what would be the closing entry to close the revenue account

debit casket coach and credit accounts payable

when a funeral director buys a casket coach on credit she would

the asset cash is credited

when cash is spent in the acquisition of an asset the impact on the accounting equation is

not affected

when cash is spent in the acquisition of an asset the net worth of a business is

expenses

which on of these does not appear on the balance sheet: expenses, assets, liabilities, proprietorship

liquidity

working capital is a measure of