Accounting

The types and amounts of assets, liabilities, and equity of a business as of a specific date.

A balance sheet lists:

$417,000.

A company has sales of $695,000 and cost of goods sold of $278,000. Its gross profit equals:

Cash payments journal.

A company would use which of the following journals to record cash payments?

A business legally separate from its owners.

A corporation is:

Stock dividend.

A corporation's distribution of additional shares of its own stock to its stockholders without the receipt of any payment in return is called a:

The right-hand side of a T-account is a:

A credit.

The left-hand side of a T-account is a:

A debit:

Earns net income by buying and selling merchandise.

A merchandiser:

Account.

A record of the increases and decreases in a specific asset, liability, equity, revenue, or expense is known as a(n):

Subsidiary ledger.

A record that contains detailed information on specific accounts with a common characteristic and is support for a controlling account is a(n):

Adjusted trial balance.

A trial balance prepared after adjustments have been recorded is called a(n):

Accounts Payable.

All of the following are classified as assets except:

Contra account.

An account linked with another account that has an opposite normal balance and is subtracted from the balance of the related account is a(n):

Owner investments.

An adjusting entry could be made for each of the following except:

Bank reconciliation.

An analysis that explains differences between the checking account balance according to the depositor's records and the balance reported on the bank statement is a(n):

Accounts receivable.

Assets created by selling goods and services on credit are:

General journal.

Assume that a company uses special journals for sales, purchases, cash receipts, and cash payments. A sales return for credit on account would be recorded in the:

Is the term used for the expense of buying and preparing merchandise for sale.

Cost of goods sold:

Liabilities.

Creditors' claims on the assets of a company are called:

The process of allocating the cost of natural resources to the period when it is consumed.

Depletion is:

Withdrawals.

Distributions of cash or other resources by a business to its owners are called:

Dishonoring a note.

Failure by a promissory notes' maker to pay the amount due at maturity is known as:

Income statement, statement of owner's equity, balance sheet.

Financial statements are typically prepared in the following order:

Lower of cost or market.

Generally accepted accounting principles require that the inventory of a company be reported at:

$245,000.

If assets are $365,000 and equity is $120,000, then liabilities are:

Revenues.

Increases in equity from a company's sales of products or services are:

Tangible assets that have a useful life of more than one accounting period and are used in the operation of a business.

Plant assets are defined as:

Items that require adjusting entries.

Prepaid expenses, depreciation expense, accrued expenses, unearned revenues, and accrued revenues are all examples of:

Assets.

Resources a company owns or controls that are expected to yield future benefits are:

Debit 400 to Utilities Expense, Credit 400 to Accounts Payable

Russell Co. received a $400 utility bill for the current month's electricity. It is not due until the end of the next month which is when they intend to pay it. Which of the following general journal entries will Russell Co. make to record the receipt of the bill?

Refer to merchandise that customers return to the seller after the sale.

Sales returns:

An estimate of the asset's value at the end of its benefit period.

Salvage value is:

Wages Payable.

Select the account below that normally has a credit balance.

Debit 7,000 to Supplies, Credit 7,000 to Cash

Specter Consulting purchased $7,000 of supplies and paid cash immediately. Which of the following general journal entries will Specter Consulting make to record this transaction? Assume the company's policy is to initially record prepaid and unearned items in balance sheet accounts.

Treasury stock.

Stock that was reacquired and is still held by the issuing corporation is called:

Paid-in capital and retained earnings.

Stockholders' equity consists of which of the following?

Revenue recognition principle.

The accounting principle that requires revenue to be recorded when earned is the:

Managerial accounting.

The area of accounting aimed at serving the decision making needs of internal users is:

Statement of Changes in Assets.

The basic financial statements include all of the following except:

Expense recognition (Matching) principle.

The broad principle that requires expenses to be reported in the same period as the revenues that were earned as a result of the expenses is the:

2% cash discount if the amount is paid within 10 days, or the balance due in 30 days.

The credit terms 2/10, n/30 are interpreted as:

Date of declaration.

The date the directors vote to declare and pay a dividend is called the:

Units-of-production depreciation.

The depreciation method that allocates an equal portion of the total depreciable cost for a plant asset to each unit produced is called:

Straight-line depreciation.

The depreciation method that charges the same amount of expense to each period of the asset's useful life is called:

Accounting equation.

The description of the relation between a company's assets, liabilities, and equity, which is expressed as Assets = Liabilities + Equity, is known as the:

Equity.

The difference between a company's assets and its liabilities, or net assets is:

Book Value.

The difference between the cost of an asset and the accumulated depreciation for that asset is called:

A debit to Petty Cash and a credit to Cash.

The entry to establish a petty cash fund includes:

Income statement.

The financial statement that reports whether the business earned a profit and also lists the revenues and expenses is called the:

(Cost minus salvage value) divided by the useful life in years.

The formula to compute annual straight-line depreciation is:

Prescribes that a company report the details behind financial statements that would impact users' decisions.

The full disclosure principle:

$112.50.

The interest accrued on $7,500 at 6% for 90 days is: (Use 360 days a year.)

Weighted average.

The inventory valuation method that tends to smooth out erratic changes in costs is:

Is the day the note is due to be repaid.

The maturity date of a note receivable:

Credit purchases.

The purchases journal is used for recording:

Ledger (or General Ledger).

The record of all accounts and their balances used by a business is called a:

Market value.

The relevant factors in computing depreciation do not include:

Going-concern assumption.

The rule that requires financial statements to reflect the assumption that the business will continue operating instead of being closed or sold, unless evidence shows that it will not continue, is the:

Credit sales.

The sales journal is used for recording:

Income Summary account.

The special account used only in the closing process to temporarily hold the amounts of revenues and expenses before the net difference is added to (or subtracted from) the owner's capital account is the:

Reports how equity changes over a period of time.

The statement of owner's equity:

Accounting cycle.

The steps performed each reporting period in preparing financial statements, starting with analyzing and recording transactions in the journal and continuing through the post-closing trial balance, is referred to as the:

Produce the same total depreciation over an asset's useful life.

The straight-line depreciation method and the double-declining-balance depreciation method:

Referred to as paid-in capital.

The total amount of cash and other assets received by a corporation from its stockholders in exchange for its stock is:

Accumulated depreciation.

The total amount of depreciation recorded for an asset for all periods for which an asset has been used:

Business entity assumption.

To include the personal assets and transactions of a business's owner in the records and reports of the business would be in conflict with the:

Liabilities created when a customer pays in advance for products or services before the revenue is earned.

Unearned revenues are generally:

Common stock.

When a corporation has only one class of stock, the stock is called:

All temporary accounts are closed but permanent accounts are not closed.

When closing entries are made:

Measurement/Cost Principle

Which of the following accounting principles require that all goods and services purchased be recorded at actual cost?

Salaries expense.

Which of the following accounts is a temporary account:

Cash.

Which of the following accounts is not included in the calculation of net income?

Land.

Which of the following assets is not depreciated?

Accounts receivable.

Which of the following is classified as a current asset?

Equipment.

Which of the following is classified as a plant asset?

Preparing a post-closing trial balance.

Which of the following is the usual final step in the accounting cycle?

Cash receipts journal.

Which of the following journals would a company use to record cash collections from customers, net of discounts taken?