ACCOUNTING FINAL
Equipment
Asset
Salary owed but not yet paid
accrued expense
cash
balance sheet
Salary Payable
liability
Perpetual Inventory System
A detailed inventory system in which a mpany maintains the cost of each inventory item and the records continuously show the inventory that should be on hand
Services rendered for cash to be received
Accrued Revenue
Fees Earned but not yet received
Accrued revenue
Wages owed but not yet paid
Accured expense
Periodic Inventory System
An inventory system in which a company does not maintain detailed records of goods on hand and determines the cost of goods sold only at the end of an accounting period
Accounts receivable
Asset
Supplies
Asset
Accounts Receivable
Asset (Debit)
Cash
Asset (Debit)
Balance Sheet Reports
Assets, Liabilities, and Stockholder's Equity as of the last day of the period
Accounting Equation
Assets = Liabilities + Equity
Time Period Concept
Assumes that a business's activities can be sliced into small time segments and that financial statements can be prepared for specific periods.
Specific Identification Method:
Based on the actual cost of each item of merchandise. Cost of goods sold is the exact cost of the specific merchandise sold, and the ending inventory balance is the exact cost of the specific inventory items on hand.
Financial statements titles include the term ____ when the company has at least one subsidiary
Consolidated
Three dates included in a dividend payment
Date of declaration, Date of record, Date of payment
The left side of an account is used to record which of the following?
Debits
Which of the following is not an employer payroll tax
Federal Income Tax
Which of the following accounts will NOT appear on the post-closing trial balance?
Fees Earned
Matching Principle
Guides accounting for expenses; ensures that all expenses are recorded when they are incurred during the period, and matches those expenses against the revenues of the period.
In what order do we prepare financial statements?
Income Statement, Statement of Retained Earnings,Balance Sheet
Issued common stock in exchange for cash.
Increases Stockholders Equity
Received cash for services performed for customers.
Increases Stockholders Equity
Invested cash in business in exchange for common stock.
Increases assets and increases stockholders equity
Accounts payable
Liability
The two main inventory accounting systems are the
Periodic and Perpetual Inventory Systems
Bookkeeping
Perpetual Periodic
Cash paid for future rent of office space
Prepaid Expense
Supplies on hand
Prepaid expense
The last step of the accounting cycle is to
Prepare a post-closing trial balance
Which of the following types of business entities is owned by one individual?
Proprietorship
The objective to financial reporting is to
Provide information useful for making investment and lending decisions
Revenue Recognition Principle
Requires companies to record revenue when it satisfies each performance obligation.
All of the following accounts/account types are closed at the end of the accounting period EXCEPT
Retained Earnings
Statement of Retained Earnings Shows
Shows how Retained Earnings changed during the period due to Net Income (or loss) and Dividends.
Which type of business organization os owned by only one owner?
Sole proprietorship
Income Statement is also known as
Statement of Activities
Balance Sheet may be Known as
Statement of Financial Position
Dividends
Statement of stockers
Supplies expense
Stockholders Equity
Utilities Expense
Stockholders Equity
Fees earned
Stockholders equity
Which of the following characteristics best describes a corporation?
Stockholders not personally liable for entity's debts
Weighted Average Unit Cost
The average cost that is weighted by the number of units purchased at each unit cost
Fees received but not yet earned.
Unearned Revenue
Fees received for future services to be performed
Unearned Revenue
FIFO (First In, First Out)
___ is an inventory cost flow assumption based on the oldest costs being transferred first from inventory to COGS so that the most recent costs remain in inventory.
The journal entry required to close the dividends account includes
a debit to Retained Earnings and a credit to Dividends.
Income Statement
a financial statement that shows you the company's income and expenditures.
Why are liabilities usually shown before owner's equity in the accounting equation? a. creditors have the first right to assets b. owners have the first right to assets c. creditors are responsible for liabilities d. owners have the first right to liabilities
a. creditors have the first right to assets
Taxes owed but payable in the following period.
accrued expense
Utilities owed but not yet paid.
accrued expense
Which businesses use an accounting equation?
all businesses, from the largest to the smallest
A claim against a customer is known as
an account receivable
The first step of the accounting cycle is to
analyze transactions and record them in the journal
Prepaid Advertising
asset
Prepaid Rent
asset
Supplies
asset
The resources owned by a business are its
assets
Balance Sheet
assets, liabilities, and shareholders' equity.
The number of shares of stock that a corporation is _______ to issue is stated in its charter.
authorized
Which organization has the authority over the accounting and financial disclosures for companies whose shares of ownership (stock) are traded and sold to the public? a. FASB b. SEC c. IASB d. GAAP
b. SEC
Which is the accounting equation? a. liabilities plus assets equal owner's equity b. assets equal liabilities plus owner's equity c. assets minus liabilities equal owners' equity d. owner's equity minus assets equal liability
b. assets equal liabilities plus owner's equity
Equity is called owner's equity in all of the following forms of business entities EXCEPT a. proprietorships. b. corporations. c. limited liability companies (LLCs) d. partnerships.
b. corporations.
Accumulated Depreciation—Building
balance sheet
On the work sheet, the cash balance in the Adjusted Trial Balance Debit column will flow into the
balance sheet
prepaid rent
balance sheet
What is the difference between the balance sheet and the income statement?
balance sheet reports what a company owns at a specific date. An income statement reports how a company performed during a specific period.
Which of the following is an example of a fixed asset?
c. Land
All of the following accounts will appear on the post-closing trial balance EXCEPT
cash
Date of payment
cash payment made, liability paid
All corporations issue
common stock
The entry to record a write-off of an uncollectible account when using the direct write-off method involves a
debit to Bad Debts Expense
paid dividends
decrease assets and decrease stockholders' equity
Paid for business expenses
decreases assets and decreases stockholders' equity.
Salary Expense
expense
Supplies Expense
expense
Comprehensive Income Statement:
includes all changes in equity during a period except those resulting from investments by owners and distributions to owners
Fees Earned
income statement
Insurance Expense
income statement
Revenue accounts appear on
income statement
Wages expense
income statement
Purchased supplies on account
increases assets and increases liabilities
Received Cash for services performed
increases assets, increases stockholders' equity
discount
increases the "effective" interest expense.
Date of record
information gathered
The term ________ refers to the shares issued to the stockholders.
issued
The rights or claims to a company's assets that creditors have are calleda. liabilities.
liabilities
unearned rent
liability
Date of declaration
liability incurred and recorded
Comprehensive Income Statement
may be combined with the income statement or follow the income statement. It includes the "other comprehensive income" items.
A two-year premium paid on insurance policy.
prepaid expense
premium
reduces the "effective" interest expense.
Rent Revenue
revenue
On the work sheet, the Dividends balance in the Adjusted Trial Balance Debit column will flow into the
statement of stockholders' equity
Subscriptions received in advance by a magazine publisher
unearned revenue
Inventory method
• FIFO (oldest cost expensed) • LIFO (newest costs expensed) • Specific identification • Other