accounting final
After making a sale of $3,000, where $1,200 is paid in cash and $1,800 is sold on credit, how would a company go about updating its balance sheet?
$1,800 debit in accounts receivable; $3,000 credit in retained earnings; $1,200 debit in cash
Which of the following is true? a. Accounts receivable increase by credits b. Accounts receivable become more valuable over time c. Accounts receivable are found in the current assets section of a balance sheet d. Accounts receivable are generated when a customer makes payments
Accounts receivable are found in the current assets section of a balance sheet
When a company purchases property, plant, and equipment, how is it reflected on the statement of cash flows?
As a use of cash in the "cash from investing activities" section.
Which is true about time in accounting?
Balance sheets reflect a company's financial position at a certain point in time.
What would the journal entry be for a company that takes out a five-year, $100,000 business loan?
Debit $100,000 current asset, Credit $100,000 non-current liabilities
Which inventory valuation method reflects the most current market value for inventory on hand?
First-in-First-Out (FIFO)
A company that uses the cash basis of accounting will:
Record revenue when it is collected.
Which one of these WILL NOT yield earnings before interest and taxes (EBIT)?
Sales + Taxes + Interest
What is the most-used method to amortize intangible assets on a company's financial statements?
Straight-line method
Which is not an example of financing cash flow?
Investing in equipment worth $90,000
Which of the following statements is true?
Journalizing comes before posting
Which is the method of depreciation used for US tax returns that is not GAAP-compliant?
Modified accelerated cost recovery systems
What is the result of the following transaction for Company A? Company A's customer is unable to pay for a previous credit sale in accordance with Company A's 90-day payment terms. The customer makes a promissory note to Company A that extends payment over a 24-month term including 5% interest.
a note receivable is recorded in non current assets
In a journal entry, a debit decreases which of the following accounts?
accounts payable
which type of journal entries are made at the end of each period to ensure the right amount of a given account is right?
adjusting
Which organizations are involved in development of US Generally Accepted Accounting Principles (GAAP)? (Check all that apply.)
all
How are a company's financial statements used? a. For internal analysis b. For external negotiation c. For compliance d. All of the above
all the above
The income statement, which presents the results of operations, can be prepared in many forms including: a. Single Step Income Statement b. Condensed Income Statement c. Common Sized Income Statement d. All of the above
all the above
Which type of accounts are prepaid insurance, pre-paid advertising, and prepaid expenses?
assets
Which of the following account types increase by debits in double-entry accounting?
assets, expenses, losses
The recording of financial transactions and events manually or electronically is called which of the following?
bookkeeping
The listing of all the financial accounts within a company's general ledger is called the _____.
chart of accounts
What type of entry will increase the normal balance of General ledger account service revenues?
credit
Philip Atwood received $5000 for completing work for local home builder. How was this recorded?
debit to asset, credit to revenue
Increasing an asset involves crediting the account.
false
True or false, withdrawals increase equity
false
Which financial statement is a report of a company's revenues and expenses during a certain time period?
income statement
Purchasing equipment on account will have what effect on the components of the accounting equation?
increase in equipment and increase in liabilities
Which of the following must a certified public accountant (CPA) have in-depth knowledge of to pass the CPA licensing exam? (Check all that apply.)
international banking laws
Which accounts are associated with cost of goods sold?
inventory
Which side of the ledger account are debits recorded on?
left
Unearned revenues are recorded on a company's balance sheet under which kind of account?
liability
Are assets on the balance sheet recorded at their estimated fair market value?
no
Which of the following scenarios increases accounts payable? A customer fails to pay an invoice. A supplier delivers raw materials on credit. Office supplies are purchased with cash. None of the above
none of the above
Which is not classified as a current asset?
property
Which of the following is not a core financial statement?
the trial balance
which of the following accounts is a temporary account?
unearned revenue
When are liabilities recorded under the accrual basis of accounting?
when incurred
What is the minimum number of accounts that accounting entries can have?
2
Which of the following scenarios increases the accounts payable?
A supplier delivers raw materials on credit
Which of the following is true? a. Accounts receivable are found in the current asset section of a balance sheet. b. Accounts receivable increase by credits. c. Accounts receivable are generated when a customer makes payments. d. Accounts receivable become more valuable over time.
Accounts receivable are found in the current asset section of a balance sheet.
Which formula is used to calculate operating income?
Gross Income - Operating Expenses = Operating Income
Which of these statements about accrual accounting is true?
If the business has provided the goods or services and can reasonably expect to receive cash, it can recognize the revenue in that period.
Which describes the double-declining balance depreciation method?
The depreciation expense is larger in the first few years and gets smaller as time goes on.
Which of the following statements is not true about intercompany accounting?
They can significantly impact taxes.
