accounting final

what are revenue expenditures

expenditures that are immediately charged against revenues as an expense

The area of accounting that provides external users with information is called _____.

financial accounting

what is the purpose of sarbanes oxley act of 2002

to maintain public confidence and trust in the financial reporting of companies

what is the role of accounting in business

to provide information for managers to use in operating the business

true

true/false: Accountants generally use spreadsheets for analyzing and summarizing data.

true

true/false: Under the revenue recognition principle, revenues are recorded when earned, which is when the services have been performed or products have been delivered to customers.

what is an example of accrued expenses

wages expense used hour by hour but is paid daily, weekly, biweekly, or monthly, and salary owed but not yet paid.

b

On November 26, Civic Company purchased $1,200 of supplies on account. The journal entry to record this transaction will include _____. a. a debit to Supplies and a credit to Cash b. a debit to Supplies and a credit to Accounts Payable c. a debit to Cash and a credit to Supplies d. a debit to Accounts Payable and a credit to Supplies

statement of owner's equity

Owner withdrawals would appear on the _____.

what is the normal balance of expenses

Debit

Net income would be overstated, and expenses would be understated.

If depreciation for a period is not adjusted, which of the following would occur?

Prepaid Expenses

All of the following accounts have normal credit balances except for _____.

Capital

All of the following accounts have normal debit balances except for _____.

c

All of the following accounts will appear on the post-closing trial balance except _____. a. accounts payable b. accounts receivable c. depreciation expense d. None of these choices are correct.

d

All of the following are asset accounts except _____. a. Cash b. Outstanding Salaries c. Building d. Plant and Machinery

in the same period as the related revenue

As per the matching principle, the expenses incurred in generating revenue are recorded _____.

What is the accounting equation?

Assets = Liabilities + Owner's Equity

0.0833

Assets for Lincoln Company totaled $13,000, liabilities totaled $1,000, and owner's equity totaled $12,000. What is the ratio of liabilities to owner's equity?

what are capital expenditures

Major investments in either tangible long-term assets such as land, buildings, and equipment or intangible assets such as patents, trademarks, and copyrights.

20.00% increase

Net income for year 1 was $75,000, and net income for year 2 was $90,000. What is the percent increase or decrease in the horizontal analysis?

be carried over to the Credit column of the balance sheet on the work sheet

Net income on the Income Statement section of the work sheet will

Accounts payable, cash

On December 15, Civic paid $1,900 to Sylvan Supply Company on the $1,900 debt owed from a previous transaction. The journal entry to record this transaction would include a debit to _____ account and a credit to _____ account.

cash

On May 21, the owner of Civic Store withdrew $1,000 cash for personal use. The journal entry to record this transaction would include a credit to _____.

Accounts Receivable

On November 21, Civic Company received $550 from customers in payment of their accounts. The journal entry to record this transaction will include a credit to _____.

analyze and record the transactions in the journal

The first step of the accounting cycle is to _____.

d

The following accounts are closed at the end of the accounting period except _____. a. revenue b. expenses c. withdrawals d. capital

Accounts receivable, fees earned

The journal entry for an accrued revenue (fees earned) includes a debit to _____ and a credit to ______.

a debit to Capital account and a credit to Drawing account

The journal entry required to close the Drawing account is _____.

prepare a post-closing trial balance

The last step of the accounting cycle is to _____.

assets

The resources owned by a business are its ________.

Liabilities

The rights and claims of creditors on a company's assets are represented by _____.

d

The spreadsheet can be used to prepare _____. a. the income statement. b. the balance sheet. c. the statement of owner's equity. d. All of these are correct.

Drawing

Which account flows into the statement of owner's equity?

a

Which account will not appear on the post-closing trial balance?a. Revenue b. Cash c. Accounts Receivable d. Accounts Payable

Accounts payable, accounts receivable, cash, supplies, unearned rent, and wages payable.

Which accounts flow into the balance sheet?

Fees earned, utilities expense, and wages expense.

Which accounts flow into the income statement?

all businesses, from the largest to the smallest.

Which businesses use an accounting equation?

Owner's equity

Which element of the accounting equation represents the rights of owners?

b

Which is the accounting equation?a. liabilities plus assets equal owner's equity b. assets equal liabilities plus owner's equity c. assets minus liabilities equal owners' equity d. owner's equity minus assets equal liability

land

Which of the following accounts does not have a contra asset account?

d

Which of the following accounts is a liability account? a. Notes Payable b. Accounts Payable c. Wages Payable d. All of these choices are correct.

Make a decision that is in the best interests of the company; other parties affected are not important.

Which of the following is not a guideline of ethical conduct?

b

Which of the following shows the correct order of events? a. Unadjusted trial balance, adjusting entries, financial statements, adjusted trial balance b. Unadjusted trial balance, adjusting entries, adjusted trial balance, financial statements c. Financial statements, unadjusted trial balance, adjusting entries, adjusted trial balance d. Financial statements, adjusted trial balance, unadjusted trial balance, adjusting entries

what is the first step of the accounting equation

analyzing and recording transactions in the journal

what is the fourth step in the accounting process

assembling and analyzing adjustment data

What is a prepaid expense? (an asset, liability, contra, owner's equity etc.)

asset

what is accounts receivable (an asset, liability, contra, owner's equity etc.)

asset

what is land (an asset, liability, contra, owner's equity etc.)

asset

what is office equipment (an asset, liability, contra, owner's equity etc.)

asset

what is supplies (an asset, liability, contra, owner's equity etc.)

asset

What is accumulated depreciation? (an asset, liability, contra, contra asset, owner's equity etc.)

asset (contra)

how do you calculate net book value or "book value of an asset"

cost of asset-accumulated depreciation of asset

what is the normal balance of a liability

credit

what is the normal balance of owners equity

credit

what is the normal balance of revenues

credit

What is depreciation?

decrease in usefulness

What is wages payable? (an asset, liability, contra, owner's equity etc.)

liability

what is accounts payable (an asset, liability, contra, owner's equity etc.)

liability

what is unearned rent (an asset, liability, contra, owner's equity etc.)

liability

what is the capital account (an asset, liability, contra, owner's equity etc.)

owners equity

what is the drawing account (an asset, liability, contra, owner's equity etc.)

owners equity

What is a fixed asset?

physical resources that are owned and used by a business and are permanent or have a long life

what is the second step in the accounting process

posting transactions to the ledger

what is an example of a prepaid expense

prepaid insurance, supplies on hand

how does the use of bank accounts help control cash

they reduce the amount of cash on hand, provide an independent recording of cash transactions, and facilitate the transfer of funds using EFT systems

what are the objective of internal control

- assets are safeguarded and used for business purposes - business information is accurate - employees and managers comply with laws and regulations

what are the elements of internal controls

1. control environment 2. risk assessment 3. control procedures 4. monitoring 5. information and communication

List the 4 financial Statements in order

1. income statement 2. statement if owners equity 3. balance sheet 4. statement of cash flows

accounts receivable

A claim against a customer is called _____.

$100

A company's accounting records reveal that Supplies had a beginning balance of $1,000. During the accounting period, the company purchased $500 of supplies. A physical count at the end of the accounting period confirmed that $1,400 of supplies were used. What will be the balance of the supplies account on the adjusted trial balance?

what is the normal balance of an asset

Debit

Salaries Expense for $10,000, Salaries Payable for $10,000

BizWorld Company pays weekly salaries of $12,500 on Friday for a five-day week ending on that day. The necessary adjusting journal entry at the end of the accounting period assuming that the period ends on Thursday will include a debit to _____ and a credit to _____.

160,000

Burr Publishers purchased a building on March 20, 20X1, for $160,000. Other amounts related to this purchase are as follows:• Price listed by seller on Jan. 1, 20X1, $180,000• Burr Publishers' initial offer to buy on Jan. 31, 20X1, $140,000• Purchase price on Mar. 20, 20X1, $160,000• Estimated selling price on Dec. 31, 20X3, $220,000• Assessed value for property taxes, Dec. 31, 20X3, $190,000Which amount related to this purchase should be recorded in the accounting records?

vertical analysis

Comparing each item on a financial statement with a total amount from the same statement is called _____.

$14,400, credit

During the accounting period, cash was debited for $4,000, $3,000, and $1,000. Cash was also credited for $3,000, $500, and $100. The beginning balance of Cash was a $10,000 debit. What would be the ending balance for Cash in the general ledger?

55.60% decrease

Fees earned for year 1 were $90,000 and for year 2 were $40,000. What was the percent increase or decrease as per the horizontal analysis?

what is an example of unearned revenues

Fees received but not yet earned

What is GAAP?

Generally accepted accounting principles. A set of rules and practices, having substantial authortitative support, that accounting profession recognizes as a general guideline for a financial reporting purposes

d

If the supplies account is not adjusted for the supplies used during a period, which of the following would occur? a. Assets and expenses would be overstated. b. Assets and expenses would be understated. c. Assets would be understated, and expenses would be overstated. d. Net income and owner's equity would be overstated.

Liabilities

In a balance sheet, accrued expense is recorded under the heading _____.

Office Supplies Expense for $255, Office Supplies for $255

Prior to recording adjusting entries, the office supplies account had a $360 debit balance. A count of the supplies showed $105 of unused supplies remaining. The required adjusting entry will include a debit to _____ and a credit to _____.

what is the direct write off method

Recording bad debt expense at the time we know the account to be uncollectible

income statement

Revenue accounts appear on the _____.

no

Should accumulated depreciation on equipment be closed at the end of the fiscal year?

$1500

Supplies had a beginning balance of $4,000. A physical count at the end of the accounting period revealed $2,500 supplies on hand. What adjustment amount will appear for Supplies in the Adjustments section of the work sheet?

the debit column of the balance sheet on the work sheet

The Cash balance on the adjusted trial balance will be carried over to

liquidity

The ability to convert assets into cash is called _____.

asset account, revenue account

The adjusting entry for accrued revenues will include a debit to a/an _____ and a credit to a/an _____.

balance sheet

The financial statement that lists assets, liabilities, and owner's equity as of a specific date, usually at the close of the last day of a month or a year, is called _____.

income statement

The financial statement that reports revenues and expenses for a period of time is called _____.

statement of owner's equity

The financial statement that summarizes the changes in the owner's equity that have occurred during a specific period of time, such as a month or a year is called _____.

True

True/False: An adjusting entry will always involve a revenue or an expense account and an asset or a liability account.

True

True/False: In a vertical analysis, revenues are most likely to represent 100 percent.

True

True/False: Increases in assets and owner's equity as a result of selling services or products to customers is called revenue.

False

True/False: The trial balance guarantees the accuracy of the ledger.

cash basis of accounting

Under the _________, revenues and expenses are reported on the income statement in the period in which cash is received or paid.

accrual basis of accounting

Under the_____, revenues and their related expenses are reported on the income statement in the period in which a service has been performed or a product has been delivered.

Accounts payable, accumulated depreciation, capital account, cash, office equipment, salaries payable, and supplies.

What accounts will usually appear in the post-closing trial balance?

1) Transactions are analyzed and recorded in the journal. 2)Transactions are posted to the ledger. 3)An unadjusted trial balance is prepared. 4)Adjustment data are assembled and analyzed. 5)An optional end-of-period spreadsheet is prepared. 6)Adjusting entries are journalized and posted to the ledger. 7)An adjusted trial balance is prepared. 8)Financial statements are prepared. 9)Closing entries are journalized and posted to the ledger. 10)A post-closing trial balance is prepared.

What are the 10 steps in the accounting cycle in order?

d

Which of the following statements is not true about adjusting entries? a. Adjusting entries should be dated as of the last day of the accounting period. b. An explanation is normally included with each adjusting entry. c. After adjusting entries are made in the journal, they are posted to the ledger. d. Adjusting entries are typically recorded on the last day of the accounting period.

SEC

Which organization has the overall authority over the accounting and financial disclosures for companies whose shares of ownership (stock) are traded and sold to the public?

Proprietorship

Which type of business is owned by one individual?

creditors have the first right to assets

Why are liabilities usually shown before owner's equity in the accounting equation?

Prepaid expenses

_____ are expenses that have been paid but are yet to be recognized.

Accrued Revenue

_____ is the amount that has been earned but has not been recorded.

what are the classifications of receivables

accounts, notes, interest, and tax

what is cash (an asset, liability, contra, owner's equity etc.)

an asset

what are the controls for safeguarding inventory

internal controls, control environment, risk assessment, control procedures, and monitoring

what is step six of the accounting process

journalizing and posting adjusting entries

what is step 9 of the accounting process

journalizing and posting closing entries

what is step 10 of the accounting process

preparing a post closing trial balance

what is step seven of he accounting process

preparing an adjusted trial balance

what is the third step in the accounting process

preparing an unadjusted trial balance

what is the fifth step in the accounting process

preparing and optional end of period spreadsheet

what is step eight of the accounting process

preparing the financial statements

What is the allowance method?

records bad debt expense by estimating uncollectible accounts at the end of the accounting period

what is fees earned

revenue

what is rent revenue

revenue

what is an example of accrued revenues

revenues recorded only when cash is received. earned but not yet recorded

no

should a capital account (ex John Doe-capital) be closed at the end of the fiscal year?

yes

should a drawing account be closed at the end of the fiscal year?

no

should accounts payable be closed at the end of the fiscal year?

no

should equipment be closed at the end of the fiscal year?

yes

should expenses on equipment depreciation be closed at the end of the fiscal year?

yes

should fees earned be closed at the end of the fiscal year?

no

should land be closed at the end of the fiscal year?

no

should supplies be closed at the end of the fiscal year?

yes

should supplies expense be closed at the end of the fiscal year?

yes

should wages expense be closed at the end of the fiscal year?

no

should wages payable be closed at the end of the fiscal year?