Bookkeeping Chapter 3 Quiz

You should record any transaction that might impact any shareholder whose income depends on returns on investment. Among accounting principles, this statement is best associated with the _______ principle.

Materiality

Accounts receivable are to short-term amounts due from customers as accounts _______ are to short-term obligations to pay for purchases on credit.

Payable

During an accounting period, all of the following refer to individual transactions EXCEPT

Preparing a preliminary trial balance

The cash method of accounting is not allowed for a

Publicly owned corporation

In an income statement, subcategories such as direct labor, overhead, and materials are included under

The Cost of Goods Sold

A/an _______ balance is a test to determine that the sum of credits is equal to the sum of debits in given accounting period.

Trial

Manufacturing businesses often divide inventory into all of the following categories, EXCEPT

Unfinished Goods

In the table, one of the debit-credit rows is incorrect. Which one is it?

3

With double-entry bookkeeping, all of the following are correct, except

A credit may decrease a liability

On a balance sheet, accounts payable is shown as

A liability

With respect to the role of a bookkeeper, tagging and monitoring fixed assets, issuing invoices to customers, paying suppliers in a timely manner, and preparing financial statements are referred to as principal

Accountabilities

On a balance sheet, accounts receivable appears as

An Asset

In an income statement, the reduction of the value of an asset while it is being used to generate revenue is called

An Expense

On a balance sheet, funds contributed to a business by its owner are recorded as

Equity

Which statement completion is CORRECT? If a CPA is rendering an opinion on the fairness of a business's financial statements.

Ethical concerns may prevent him or her from rendering a variety of other kinds of services

On an income statement, revenue minus the cost of goods sold is called the

Gross Margin

Which statement completion is MOST accurate? The IRS concept of constructive receipt

Imposes an accrual concept on a cash method of accounting

If it is assumed that accounting software will automatically cancel out an accrual in the following month, accruals are initiated as _______ accruals.

Reversing

With depreciation, the estimated amount of money that can be expected from some buyer at the end of asset's useful life is its

Salvage Value

To determine the useful life of a motor vehicle you must determine that asset's _______

Salvage Value (?)