Computerized Office Final (Study Guide)

Jovan Associate's worksheet for the month of December shows supplies with a $2,000 debit balance on the Trial Balance section and shows a $400 credit in the Adjustments section. The new balance in the Adjusted Trial Balance section would be:

$1,600 debit

On December 1, a company purchased equipment costing $10,000. The equipment has an expected useful life of 3 years and salvage value of $1,000. The company uses straight-line method of depreciation. Determine the amount of depreciation expense that will be recognized each month:

$250

A company's worksheet for the month of June shows Prepaid Rent with a $4,000 debit balance on the Trial Balance section and shows a $1,000 credit in the Adjustments section. The balance for Prepaid Rent in the Adjusted Trial Balance section would be:

$3,000

A company reported on its balance sheet: Equipment of $10,000 and Accumulated Depreciation of $2,000. Book value for the equipment equals:

$8,000

The formula for straight-line depreciation is:

(Cost-Salvage Value)/Estimated Useful Life

Place the following lines of a worksheet title in proper order:

-ABC Company -Worksheet -Month Ended August 31, 20XX

Identify which of the following column headings appear in a worksheet:

-Adjusted trial balance -Balance sheet -Adjustments

The Adjusted Trial Balance section of the worksheet is computed by combining which sections of the worksheet:

-Adjustments section -Trial Balance section

Place the steps for analyzing business transactions in the appropriate order:

-Analyze the financial event -Apply the rules of debit and credit -Make the entry in T-account form to help analyze the transaction (optional) -Record the complete entry in general journal form

In the general ledger, accounts are typically in financial statement order. Place the accounts in the order they would appear in the ledger:

-Assets -Liabilities -Owner's Equity -Revenues -Expenses

All adjusting entries include which of the following:

-Balance sheet accounts -Income statement accounts

Identify which of the following steps are used to prepare the Income Statement Section of the worksheet:

-Calculate the total of the Debit and Credit columns -Extend the expense account balances from the Adjusted Trial Balance to the debit columns of the Income Statement Sections -Extend the revenue account balances from the Adjusted Trial Balance to the credit columns of the Income Statement sections

The correct heading of an income statement includes the following lines:

-Company Name. -Income Statement. -For the Period Ended MM/DD/YY.

Identify which of the following are correct steps to prepare the adjusted trial balance section of the worksheet:

-Compute the Debit and Credit column totals in the Adjusted Trial Balance -Combine the figures from the Trial Balance section and the Adjustments section of the worksheet

Gill Company calculated equipment depreciation for the month of $500. The necessary adjusting entry will include a:

-Credit to accumulated depreciation -Debit to depreciation expense

On May 1, Chadha Associates paid $6,000 rent in advance for a six-month period. The $6,000 was debited to the Prepaid Rent account. The necessary adjustment at May 31 would include which of the following entries:

-Credit to prepaid rent for $1,000 -Debit to rent expense for $1,000

Place the steps to post from the general journal to the general ledger in the correct order:

-Enter the date -Enter the amount in the appropriate Debit or Credit column -Compute the balance

Place the activities used to prepare the trial balance section of the worksheet in the order that they would be completed:

-Enter the general ledger account names -Transfer the general ledger account balances to the Debit and Credit columns -Total the columns to prove the trial balance is in balance -Place a double rule under each trial balance column total to show that the work is complete

Identify which assets below are depreciated:

-Equipment -Buildings

Identify the long-term assets listed below:

-Land -Equipment

Identify the correct statements about straight-line depreciation:

-Method results in an equal amount of depreciation being charged each accounting period - = (cost-salvage value)/estimated useful life

Identify which accounts appear in a year-end Statement of Owner's Equity:

-Net Income -Capital, January 1, 20XX -Withdrawals -Capital, December 31, 20XX

An audit trail makes it possible to:

-Prevent fraud -Trace information -Locate errors

Identify the correct statements about posting:

-Records the information to the general journal -The third step of the accounting cycle -A process of transferring data from the journal to the record of final entry

Identify which of the following accounts appear on an income statement:

-Salaries expense -Fees income -Utilities expense

Identify which of the following items appear on an income statement:

-Supplies expense -Net income -Fees income

Which of the following are correct statements about the process of journalizing the general journal?

-The account that is being credited should be slightly indented within the description column -The description should refer to the source of the information

Identify which of the following are correct statements about the process of journalizing in the general journal:

-The description should refer to the source of information -The debit is recorded on the first line of the entry -The date should be entered year first, then the month and day

Identify which of the following activities are involved in the preparation of the trial balance section of the worksheet:

-Transfer the general ledger account balances to the Debit and Credit columns -Total the columns to prove the trial balance is in balance -Enter the general ledger account names

Place the following column headings in the order they appear on a worksheet:

-Trial Balance -Adjustments -Adjusted Trial Balance -Income Statement -Balance Sheet

Identify which lines would appear on the title of a worksheet:

-XYC Company -Worksheet -Month Ended December 31, 20XX.

On June 1, a company purchased equipment costing $7,200. The equipment has an expected useful life of 5 years and a salvage value of $1,200. The company uses straight-line method of depreciation. On June 30, the company will recognize $________ (omit $/cents) of depreciation expense.

100

Vera Bookkeeping reported the following amounts on its December 31 Balance Sheet: Equipment: $6,000; Accumulated Depreciation $4,000. The book value of the equipment is $____________________(omit$/cents).

2000

All depreciation taken on an asset during its useful life is recorded in the _____________ account.

Accumulated depreciation

Identify which of the following accounts is a contra account:

Accumulated depreciation

A journal entry which occurs from internal operations and is made to update accounts for previously unrecorded items is called a(n) ______________ entry.

Adjusting

Journal entries that are made to update accounts for previously unrecorded items, such as supplies used, are called:

Adjusting entries

A ledger account form that shows the balance of the account after each entry is posted is called a:

Balance ledger form

A company provides consulting services to a customer and bills the customer $500. The transaction would be journalized with a debit to the _______________account and a credit to the _______________ account.

Blank 1- Accounts Receivable Blank 2- Fees Income

On November 1, a company paid $1,200 for a twelve-month advertising contract. The $1,200 was debited to the Prepaid Advertising account. The necessary adjustment to record the advertising expense for both November and December on December 31 will include a debit to the __________________account in the amount of $____________ (omit $/cents).

Blank 1- Advertising expense Blank 2- 200

San Company calculated equipment depreciation for the month of $800. The necessary adjusting entry will include a debit to ______ expense and a credit to ________ Depreciation in the amount of $800

Blank 1- Depreciation Blank 2- Accumulated

On November 1, a company bought supplies for $200. The $200 was debited to the Supplies account. An inventory of supplies at the end of November showed that items costing $50 were on hand. The necessary adjustment will include a credit to the __________ account in the amount of $__________ (omit $/cents).

Blank 1- Supplies Blank 2- 150

Accumulated depreciation is a __________ asset account; therefore, it increases with a (debit/credit).

Blank 1-Contra Blank 2-Credit

On August 1, Super Flooring Company paid $3,000 rent in advance for a three-month period. The $3,000 was debited to the Prepaid Rent account. The necessary adjustment at August 31 would include a (debit/credit) to the prepaid rent account in the amount of $______ (omit $/cents).

Blank 1-Credit Blank 2-1,000

A company pays $3,500 for weekly salaries. This transaction would be recorded with a debit to the salaries _________________ account and credit to the ___________________ account

Blank 1: Expense Blank 2: Cash

The difference between the cost of a long-term asset and its accumulated depreciation is called __________ value.

Book

An owner invests $3,000 into her company. The company would record this transaction with a debit to the ________ account.

Cash

A _______ journal entry contains more than one debit or credit

Compound

An account that has a normal balance that is opposite that of a related account is called a ____________ account.

Contra

On January 1, a firm paid $3,000 rent in advance for a three-month period. The $3,000 was debited to the Prepaid Rent account. The necessary adjustment on January 31 will include a:

Credit to prepaid rent for $1,000.

Nayak Associates performed services for $1,500 on account. This transaction would be recorded with which of the following entries?

Debit Accounts Receivable for $1,500 Credit Fees Income for $1,500

Depreciation for equipment this month is $300. The necessary adjusting entry will include a:

Debit to depreciation expense

On August 1, a firm bought supplies for $500. The $500 was debited to the Supplies account. An inventory of supplies at the end of August showed that items costing $200 were on hand. The necessary adjustment will include a:

Debit to supplies expense for $300

The process of allocating the cost of long-term assets over their expected useful lives is called ____________.

Depreciation

True or False: Examples of long-term assets include cash, accounts receivable, supplies, equipment, buildings, and land.

False

Accumulated Depreciation:

Is a contra asset, and increases with a credit

The ______ keeps account records on a special form that makes it possible to record all data efficiently

Ledger

The statement of owner's equity uses which of the following items from a worksheet:

Net income from the income statement

The Income Statement section of the worksheet shows total debits of $1,300 and total credits of $2,500. The Income Statement will show:

Net income totaling $1,200

The Income Statement of the worksheet shows total debits of $700 and total credits of $1,000. The Income Statement will show:

Net income totaling $300

Moon Consulting's Worksheet for the month of December showed the following totals in the Income Statement Section: total debits of $14,000; and total credits of $12,000. These totals can be used to determine that:

Net loss equals $2,000

A company's worksheet for the month of March showed the following totals in the Income Statement Section: total debits of $11,000; and total credits of $8,000. These totals can be used to determine that:

Net loss equals $3,000

Adjusting Entries can contain which of the following:

One income statement account and one balance sheet accounts.

The process of transferring data from the journal to the ledger is known as:

Posting

An estimate of the amount that may be received by selling or disposing of an asset at the end of its useful life is called _______________ value.

Salvage

Net income can be calculated by taking total credits less total debits in the Income Statement of the worksheet, and verified by taking:

The Balance Sheet Debit column subtracted from the amount in the Credit column

Book value is:

The difference between the cost of a long-term asset and accumulated depreciation.

Using the worksheet, net income can be calculated by taking the difference between:

Total credit and total debits in the income statement section

True or False: The process of posting to the general ledger requires that you compute new balances in at least two accounts.

True

A form used to gather all data needed at the end of an accounting period to prepare the financial statements is called a:

Worksheet