Accounting Multiple Choice

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

A

An employee working with an account can trace a transaction back to the correct journal by using information in the A. Post. Ref. column. C. Purch. No. column. B. Item column. D. Vendor column.

A

At the end of the fiscal period, the balance of Dividends is closed to A. Retained Earnings. C. Dividends Payable. B. Income Summary. D. none of these.

A

For a sale on account of $1,000.00 plus sales tax of $80.00, the amount recorded in the Accounts Receivable amount column of a sales journal is A. $1,080.00. C. $920.00. B. $1,000.00. D. $80.00.

A

Marris Company records a $1,000.00 sale on account on May 23. On June 6, the customer pays the account. The sale should be recorded in the A. sales journal on May 23. C. sales journal on June 6. B. cash receipts journal on May 23. D. cash receipts journal on June 6.

A

The adjustment for unpaid federal income tax includes a(n) A. expense and a liability account. B. expense account only. C. expense account and a temporary equity account. D. liabilityaccountonly.

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.

A

The operating revenue remaining after cost of merchandise sold has been deducted is A. gross profit. B. cost of merchandise sold. C. net sales. D. total sales.

A

The source document for paying employee income tax and social security and Medicare tax is A. a check. C. a memorandum. B. a receipt. D. none of these.

A

The source document for paying state unemployment tax is A. a check. C. a memorandum. B. a receipt. D. noneofthese.

A

To replenish a $300.00 petty cash fund, if the petty cash custodian had receipts totaling $224.00 and cash of $74.00 in the petty cash box, one part of the journal entry is a A. debit to Cash Short and Over for $2.00. B. credit to Cash for $224.00. C. debit to Petty Cash for $224.00. D. credit to Cash Short and Over for $2.00.

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.

A

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

A

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

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. C. restrictive endorsement. B. special endorsement. D. deposit endorsement.

B

Each employer must file a _________ federal tax return showing the federal income tax, social security tax, and Medicare tax due the government. A. monthly C. yearly B. quarterly D. semiannual

B

In general, employers are required to pay state unemployment taxes A. monthly. B. during the month following each calendar quarter. C. annually. D. none of these

B

Individual payroll checks are usually written on a(n) A. company's regular checking account. C. special purposes account. B. separate payroll checking account. D. employee earnings account

B

Merchandise with a list price of $1,500.00 is purchased on account for $900.00 on August 1. Terms of sale are 2/10, n/30. Payment is made on August 17. The amount paid should be A. $1,500.00. C. $600.00. B. $900.00. D. $882.00.

B

Supplies bought for use in a business are recorded in the A. Supplies Expense account. C. Purchases account. B. Supplies account. D. Cash account.

B

The Accumulated Earnings column of the employee earnings record A. shows net pay for the year. B. is the total earnings since the first of the year. C. shows net pay for one quarter. D. is the gross earnings for one quarter.

B

The amount of sales tax on a sale is calculated as the price of goods A. plus the sales tax rate. C. minus the sales tax rate. B. times the sales tax rate. D. divided by the sales tax rate

B

The journal entry to adjust Merchandise Inventory when beginning merchandise inventory is $125,000.00 and ending merchandise inventory is $115,000.00 would be A. debit Merchandise Inventory, $10,000.00 and credit Income Summary, $10,000.00. B.debit Income Summary,$10,000.00 and credit Merchandise Inventory, $10,000.00. C. debit Merchandise Inventory, $115,000.00 and credit Income Summary, $115,000.00. D. debit Income Summary,$115,000.00 and credit Merchandise Inventory, $115,000.00.

B

Until the amounts withheld from employee salaries are paid by the employer, they are recorded as A. assets. C. salary expense. B. liabilities. D. revenue.

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.

B

Which of the following stockholders' equity accounts has a normal debit balance? A. Capital Stock C. Paid-in Capital in Excess of Par B. Dividends D. Income Summary

B

A customer notifies the vendor that purchased merchandise is damaged and cannot be sold at the normal price. Any credit granted to the customer would be called a A. sales return. C. sales allowance. B. purchases allowance. D. none of these.

C

A physical inventory is always conducted at the end of each A. week. C. fiscal year. B. month. D. none of these.

C

Accrued interest income on notes receivable is calculated using all of the following information except the A. annual interest rate C. term of the note. B. principal. D. dateofthenote.

C

Dividends is a temporary account of a corporation and is similar to which proprietorship account? A. Equity. C. Drawing. B. Contributed Capital. D. none of these

C

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

C

In the accounting cycle, closing entries are journalized and posted A. after adjusting entries are posted to the general ledger. B. after the adjusted trial balance is prepared. C. after the financial statements are prepared. D. before the adjusted trial balance is prepared.

C

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

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. C. Balance Sheet Debit column. B. Income Statement Credit column. D. Balance Sheet Credit column.

C

One way to increase gross profit is to A. decrease operating expenses. B. decrease sales revenue. C. increase sales revenue D. increase cost of merchandise

C

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

C

The adjustment unique to merchandising businesses adjusts A. Accounts Receivable. C. Merchandise Inventory. B. AccumulatedDepreciation. D. PrepaidInsurance.

C

The amount of cash received for a sale on account of $1,080.00 when the cash is received within the 2% discount period is A. $1,080.00. C. $1,058.40. B. $1,062.00. D. $1,053.60.

C

The total earnings paid to an employee after payroll taxes and other deductions is recorded in the payroll register's A. Gross Pay column. C. Net Pay column. B. Total Earnings column. D. Total Deductions column

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.

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. C. doing file maintenance. B. journalizing. D. none of these.

C

When cash is paid on account, 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.

C

A business should post sales on account transactions to the accounts receivable subsidiary ledger frequently to A. ensure the customer is invoiced for the sale. B. avoid errors in posting. C. follow generally accepted accounting principles. D. ensure each customer account will show an up-to-date balance.

D

Employers are required to furnish each employee with an annual statement of earnings and withholdings before A. December 31 of the current year. C. January 15 of the following year. B. January 1 of the following year. D. January 31 of the following year.

D

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.

D

The amount of the adjustment to Allowance for Uncollectible Accounts when the account balance is a $400.00 debit and $5,000.00 of accounts receivable is estimated to be uncollectible would be A. $400.00. C. $5,000.00. B. $4,600.00. D. $5,400.00.

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.

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

D

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

D

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

D