Business accounting midterm

the journal entry to record a withdrawal by the owner would most commonly include:

a debit to withdrawals and a credit to cash

when balance sheet credits exceed the debits on the worksheet:

a net loss has occurred

if the business records a number a 971 and it should be 179, this error would be called

a transposition

which of the following will decrease owners equity

a withdraw by the owner

the process that begins with recording business transactions and includes the completion of the financial statements is the:

accounting cycle

the purpose of the accounting process is to provide financial information about:

all of the above sole proprietorships, small business, large corporations

accounting provides information to

all of the above investors, government, managers

which of the following is NOT an asset

all of the above are assets cash, account receivable, buildings

closing entries are prepared:

all of the above are correct to clear all temporary accounts to zero, to update the capital balance, at the end of the accounting period.

a contra-asset is:

an account with an opposite balance of a normal asset

the first step of accounting cycle is:

analyzing business transactions

a credit to an asset account was posted to a liability account. this would cause

assets to be overstated

if the Supplies account is NOT adjusted:

assets will be overstated and expenses will be understated.

the general journal does NOT have a column titled:

balance

the Sarbanes-oxley act was passed to:

both prevent financial statement fraud at public company financial reporting are correct

each adjusting entry affect:

both the income statement and the balance sheet are correct

how do you close a revenue account?

credit income summary; debit revenue

the right side of any account is the:

credit side

the adjusting entry to record the expired rent would be to:

debit rent expense; credit prepaid rent.

the left side of any account is the

debit side

the adjustment for wages earned, but not yet paid is:

debit wages expense, credit wages payable

which of the following accounts would NOT be considered a permanent account?

depreciation expense

which of the following is a characteristic of a sole proprietorship

easy to form

in the normal accounting cycle, the:

financial statements are prepared after the adjusting entries are posted.

the twelve- month period a business chooses for its accounting period is a(n):

fiscal year

a ledger:

includes all company accounts and their related balances

depreciation expense would be found on which of the following financial statements?

income statement

how are credits distinguished from debits in the journal

indenting

posting is performed by transferring information from the journal to the:

ledger

a credit to a liability account was posted to the capital account. this would cause:

liabilities to be understood

assets are equal to:

liabilities+owners equity

adjusting journal entries:

must be journalized and posted.

if total liabilities increased by $10,000 and the assets increased by $10,000 during the accounting period, what is the change in the owners equity amount?

no effect on owner's equity

the balance sheet contains:

none of the above are correct

when historical cost is used to record equipment, it would appear as the:

original cost in an asset account on the balance sheet

when original cost is used in the accounting records, the book value of the asset is:

original cost less accumulated depreciation

an account in which the balance is carried over from one accounting period to the next is called a:

permanent account

the final step in the accounting cycle is:

preparing the post-cleaning trial balance

the estimated value of an item at the end of its useful life is:

residual value

a calendar year is:

the 12 month period beginning with January

after closing the revenue and expense accounts, income summary showed a debit balance of $1,900. which of the following statements is true?

the company had a net loss of $1,900

an account is said to have a debit balance if:

the footing of the debits exceeds the footing of the credit

the purpose of posting is to:

update the account balances in the ledger

if total liabilities are $50,000 and owners equity is $35,000, the total assets must be:

$85,000