Accounting quiz terms

Which of the following is the correct sequence of events?

Analyze a transaction; record it in the journal; post it to the ledger

Which of the following is NOT a satisfactory statement of the accounting equation?

Assets = Stockholders' Equity - Liabilities

Which accounts normally have debit balances?

Assets, dividends, and expenses

In which of the following sequences are the financial statements usually prepared?

Income statement, retained earnings statement, balance sheet, and statement of cash flows.

IFRS stand for:

International Financial Reporting Standards.

Which of these statements about a journal is false?

It contains only revenue and expense accounts.

At the end of the fiscal year, the usual adjusting entry for accrued salaries owed to employees was omitted. Which of the following statements is true?

Liabilities at the end of the year are understated.

To show how successfully your business performed during a period of time, you would report its revenues and expenses in the

income statement

which financial statement is prepared first?

income statement

Transactions are initially recorded in chronological order in a __________ before they are transferred to the accounts.

journal

The purpose of the ledger is to

keep in one place all information about changes in specific account balances.

The final step in the recording process is to transfer the journal information to the

ledger.

If cash is received in advance from a customer

liabilities will increase

Metlock, Inc. purchased a one-year insurance policy in January 2016 for $37800. The insurance policy is in effect from March 2016 through February 2017. If the company neglects to make the proper year-end adjustment for the expired insurance:

net income and assets will be overstated by $31500. $37800x10/12=$31500

Which of the following clarifies information presented in the financial statements, as well as expanding upon it where additional detail is needed?

notes to the financial statement

If the adjusting entry is not made for unearned revenues, then the result will be to

overstate liabilities and understate revenues.

Stockholders' equity can be described as claims of

owners on total assets.

Which of the following is not classified as a current asset?

patents

Goods purchased for future use in the business, such as supplies, are called:

prepaid expenses.

A small nehiborhood barbershop that is operated by its owner would likely be organized as a

proprietorship

In which forms of business organization are the owners personally liable for all the debts of the business?

sole proprietorship and partnership

If an account is debited in the journal entry, then

that account will be debited in the ledger.

If the sum of the debit column equals the sum of the credit column in a trial balance, it indicates

the mathematical equality of the accounting equation.

What does a general ledger of a company contain?

All the asset, liability, stockholders' equity, revenue, and expense accounts

On January 1, 2016, Sheridan Company purchased equipment for $21000. The company is depreciating the equipment at the rate of $840 per month. At January 31, 2017, the balance in Accumulated Depreciation is:

$10920 credit.

Which of the statements below is not true?

An adjusted trial balance is prepared before all transactions have been journalized.

Which of the following is not classified properly as a current asset?

A receivable from the sale of an asset to be collected in two years.

Which one of the following is not a justification for adjusting entries?

Adjusting entries are necessary to bring the general ledger accounts in line with the budget.

A balance sheet shows

assets, liabilities, and stockholders equity

U.S. standards are developed by the

FASB (Financial accounting standards board)

Assets are increased by credits.

False

Current assets are economic resources that are expected to be converted to cash or used up by the business within one year or the normal operating cycle, whichever is shorter.

False

What are the accounting rules that have substantial authoritative support and are recognized as a general guide for financial reporting purposes in the U. S.?

Generally accepted accounting principles

Which types of accounts will appear in the post-closing trial balance?

Permanent accounts.

Which is not part of the recording process?

Preparing a trial balance

Oriole Industries employs a 5-day workweek and a September 30 year-end. Normal weekly wages amount to $39200. If September 30 ends on a Wednesday, what is the appropriate journal entry on October 2, the next payday for Oriole?

Salaries and Wages Expense $15680Salaries andWages Payable $23520Cash $39200

The agency of the United States Government that oversees the U.S. financial markets is the

Security Exchange Commission.

Which account will have a zero balance after closing entries have been journalized and posted?

Service revenue.

Which of the following is not a typical example of a prepaid expense?

Wages

On July 7, 2017, Coronado Industries received cash $1320 for services rendered. The entry to record this transaction will include

a debit to Cash of $1320.

When expenses exceed revenues, which of the following is true?

a net loss results

The final step in the accounting cycle is to prepare:

a post-closing trial balance.

The closing entry process consists of closing

all temporary accounts.

The first step in the recording process is to

analyze the transaction in terms of its effect on the accounts.

Liabilities

are debts and obligations.

Resources owned by a business are referred to as

assets

An investment by the stockholders in a business increases

assets and stockholders' equity.

If total liabilities increase by $5,000 then

assets increase by $5,000, or stockholders' equity decrease by $5,000.

Which statement presents information as of a specific point in time?

balance sheet

Genesis Company buys equipment for $900 on credit. This transaction will immediately affect the

balance sheet only.

The difference between the cost of a depreciable asset and its related accumulated depreciation is referred to as the:

book value of the asset.

In what order are current assets listed?

by liquidity

Equipment costing $19200 is purchased by paying $4800 cash and signing a note payable for the remainder. The journal entry should include a

credit to Notes Payable.

which of the following would not be considered an internal user of accounting data for a company?

creditor company

Liabilities are generally classified on a balance sheet as

current liabilities and long-term liabilities.

As prepaid expenses expire with the passage of time, the correct adjusting entry will be a:

debit to an expense account and a credit to an asset account.

Which of the following would not appear on the income statement?

dividends paid

The expense recognition principle matches:

expenses with revenues.