Accounting Midterm
A blank is often called the book of original entry
Journal
Another term used for recording a business transaction is
Journalizing
The county stationary used to record financial information about specific accounts is a
Ledger account form
A(n) _______ operates to support a cause or an interest.
not-for-profit organization
A blank is an any type of business paper that verifies that a transaction occurred
Source document
If you meant to write $27 but route $72 this mistake is called a
Transposition error
A business should have separate accounts for recording revenue and expenses
True
A partnership can be owned by a more than two individuals
True
Corporations often start out as a sole proprietorships or partnerships
True
Expenses decrease owners equity and recorded as debits
True
Expenses have the opposite effect from revenue on the capital account.
True
For accounting purposes , a business is an entity separate from its owners.
True
GAAP is a way to communicate financial information in a form understood by those interested in the operations and financial condition of the business
True
In a free enterprise system, businesses compete for customers.
True
One advantage of owning your own business is that any financial gain from operating the business is yours.
True
Only businesses that earn a profit will have the economic resources to continue to operate.
True
Temporary capital accounts are extensions of the owners capital account
True
The life of a business is divided into specific periods for reporting purposes.
True
The rules of debit and credit for expense accounts are the same as the rules for asset accounts
True
The toll of all accounts with normal debit balance it should equal the total of all accounts with normal credit balances if the rules of debit and credit were followed correctly
True
The withdrawal of cash by the owner of a business decreases owners equity
True
A(n) _______ operates to earn money for its owners.
for-profit business
Accounts Payable
liability
_______ refers to the way a person uses his or her time, energy, and resources
lifestyle
Accounts Receivable
Asset
A business is earning a profit if the selling price of its product covers the cost of the raw materials needed to make the product.
False
A business owner must always get permission to operate from the state government.
False
All businesses set up their accounting systems in the same manner.
False
All types of businesses sell a product.
False
Basic accounting rules and procedures differ from business to business.
False
Income from fees as a permanent account
False
Liability, expense, and capital accounts all have normal credit balances.
False
Liability, revenue, and withdrawal accounts all have normal credit balances
False
Permanent accounts start each accounting. With a zero balance
False
Revenues increase owners equity in increases in revenues are recorded as debits
False
Service businesses are not intended to operate at a profit.
False
The principles you live by and the beliefs that are important to you are your
values
If the creditors financial claim to property totals $1000 in the owners financial claim the property totals $11,000 the property value is
12,000
The various activities a business completes to organize its accounting records in an orderly fashion is called the blank
Accounting cycle
A blank accounting period begins on January 1 and ends on December 31
Calendar year
If Paul Abdu deposits $30,000 in a checking account and the name of his business the two accounts affected are
Cash and bank and paul abdou capital
A decreased to an expense account is a
Credit
And increase to revenue account is a
Credit
A business transaction involves a purchase on account is considered to be an
Credit transaction
A decrease in the owners capital accounts recorded as a
Debit
A decrease to accounts payable is a
Debit
A decrease to collection fees is recorded as a
Debit
An increase the office furniture is a
Debit
An increase to Mark Cookson withdraws is recorded as a
Debit
An increase to Utilities Expense is a recorded as a ____________________.
Debit
An increase to the withdrawal's account is a
Debit
The left side of a T account is a
Debit
The normal balance for accounts receivable is a
Debit
The normal balance for asset accounts is a
Debit
The normal balance for expense accounts is a
Debit
The normal balance for the owners with drawls account is a
Debit
Each of the following is a business expense accept a payment for
Equipment
The corporation is the easiest form of business to organize.
False
A blank is an accounting period of 12 months in the in the last day of any month except December
Fiscal year
The blank is an all purpose journal used for recording business transactions
General journal
Weather accounts are kept manually in a specific file or electronically on magnetic desks or tapes the ledger is often called a
General ledger
Adding all the debit balance is and all the credit balances and then comparing the two totals to see whether they are equal is called
Proving the ledger
If you were to write $190 as either $19 or $1900 this mistake would be called a
Slide
All of the following account titles are asset titles except
accounts payable
The purchase of a desk on account will increase Office Furniture and will also increase ____.
accounts payable
Cash in bank
asset
Repair Tools
asset
The account accounts receivable is an example of an
asset
computer equipment
asset
office supplies
asset
The word equities refers to claims against the assets of a business by
both creditors and owners
A(n) _________ is work that is built on a foundation of interest, knowledge, training, and experience
career
Errors discovered after posting has taken place require a
correcting entry
A decrease in an asset account is recorded as a
credit
An increase in a liability account is recorded as a
credit
An increase to Gilberto Ferreira capital is a
credit
The normal balance for accounts payable is a
credit
The normal balance for consulting fees is a
credit
The normal balance for the owners capital Account is a
credit
The accounts used by business can be kept on pages or cards which are kept together in a book or file called a
ledger
The sharing of information and advice is called
networking
Roberta Saba, Capital
owner's equity
_______ Can help you identify preferences that will have an impact on your career choice
personal interest tests
Your ____ is the set of unique qualities that makes you different from all other people.
personality
Transferring data from the journal to the ledger is called
posting
A(n) __________ firm provides accounting services to clients such as individuals or businesses
public accounting
A person's ______ are his or her abilities, such as the ability to think creatively or to make decisions.
skills
A periodic report prepared by business to test the equality of total debits and total credits in the ledger is called a
trial balance
