Accounting State Assessment
Amounts that a business must pay in the future are know as
accounts payable
The credit side is the normal balance side of the
accounts payable account
To find the balance due from an individual charge customer, the accountant would refer to the
accounts receivable subsidiary ledger
Office furniture is an example of
an asset
The word equities refers to claims against the assets of a business by
an expenses transaction
After all posting have been made, the total of the schedule of accounts receivable should equal the
balance of the Accounts Receivable account
When precision photographers bought new camera equipment on account
both assets and liabilities increased
The accounting assumption that requires business and personal records be kept separate is
business entity
The balance of a permanent account is
carried forward to the next fiscal period
The debit side is the increase side of the
cash account
Examples of assets are
cash and accounts receivable
Reductions in the amount owed that many businesses offer to charge costumers in return for prompt payment are called
cash discounts
A cash sale of merchandise would be recorded in the
cash receipts journal
The form used to a charge customer who returns damaged or unwanted merchandise is
credit memorandum
To record the payment of an invoice when a discount is taken , the accountant would
debit Accounts Payable, credit Purchases Discount and credit Cash
A company made a partial payment on account. to record this transaction, the accountant would
debit accounts payable and credit cash
The specific period of time covered by an accounting report is called
fiscal period
Which of the following is not considered to be a special journal
general journal
The idea that a business will continue to operate in the future is the accounting assumption of
going concern
Debits are use to record
increase in assets decrease in liabilities increase in withdrawals
Credits are used to record
increases in liabilities and owner's equity
The financial affairs of a business and the financial affairs of the owner should be
kept totally separate
The type of business that buys finished products to resell to individuals or other business is called
merchandising business
Capital is
money invested in the business by the owner
The Sales, Returns and Allowances account is presented
on the income statement as a deduction from sales
When equipment is purchased for cash
one asset increases and another assets decreases
Which of the following transactions would be recorded in the purchase journal?
the purchases of merchandise on account and the charge purchase of equipment
In a firm that uses special journals, credit sales of merchandise are recorded in
the sales journal
If a business uses special journal, which of the following transactions would not be recorded on the general journal
the sales of merchandise on account
The activities a business completes to keep it's records in order are called
the accounting cycle
During one month, a company had sales of $27,500, sales discount of $1,000, and sales returns and allowances if $400. It's net sales were
$26,100
Merchandise sold on credit for $300 plus 5 percent sales tax. the entry in the sales journal will include a debit to accounts receivable for
$315
If a business has assets of $45,670 and liabilities of $12,845 the owner's equity is
$32,825 45,670-12,845= 32,825
Scott realty has accounts receivable of $3,350, equipment totaling$5,700, liabilities of $900, and owner's equity of $12,300. it's cash in the bank equals
$4,150 add the accounts receivable and equipment together and the liabilities and owner's equity together subtract the two totals to get the cash
Evan's engineering has the following accounts: accounts payable, $1,200; accounts receivable, $1,600; building , $60,000; cash in the bank, $2,000; equipment,$8,000; land, $10,000 and supplies, $7,000. owner's equity is
$81,100
Nine days after a firm sold merchandise with an invoice price of $1,000 on a credit terms of 2/10, n/15, the firm received a check from the customer. The amount of the check was
$980
The Purchases Returns and Allowances account is classified as
a contra cost of merchandise account
The entry to record the return of defective merchandise to the supplier would include
a credit to Purchase Returns and Allowances
The purchases of merchandise on account requires
a debit to Purchases and a credit to Accounts Payable
The journal entry to record the payment of monthly utility bill would include
a debit to utilities expense and a credit to cash
When a business pays cash for salaries, there is a decrease in assets and
a decrease in owner's equity
The sales account is classified as
a revenue account
The source document for an entry in the cash receipts journal is the
receipt
In which of the following transaction would both an asset and owner's equity increase?
received payment of services provided
The account used to record increases in owner's equity from the sale of goods or services is the
revenue account
Which of the following have normal credit balances?
sales and Jane Smith capital
An example of a permanent account is
supplies
The purchases account is a
temporary account
Revenue, expenses and drawing accounts are called
temporary accounts
The total of the balances of the creditors accounts should agree with
the Accounts Payable account