NOCTI Review 2

The financial statement that reports the revenues and expenses for a period of time such as a year or a month is the

Income statement

A purchase of merchandise on

Increases a liability

If an employee is being paid bi-weekly how many times do they get paid a month

2

You cannot be paid for overtime until you have worked __ hours

40

What is an outstanding check?

A check that has been written by a company but has not yet cleared the bank account on which it is drawn

Which type of journal entries are made at the end of each accounting period so that the financial statements better reflect the accrual method of accounting?

Adjusting

Adjusting entries are for what accounts

Asset accounts

What is the accounting equation?

Assets = liabilities + owner's equity

Buying something and saying you will pay for it at a later date is

Buying on account

What will usually cause an asset account to increase

Debit

When an expense is involved in a transaction, an expense will be

Debit

When cash is received, the account Cash will be

Debited

Which accounts normally have a debit balance

Expense, assets, drawing

When an employee tells someone something that is very important and confidential to a business what kind of conflict is that

External

The inventory cost assumption where the first inventory Is the first to go is

FIFO

What is FICA

Federal insurance contributions act

When posting in the ledgers from the general h=journal the correct way to write it is

GJ8 or J8

A company disposes of equipment that it no longer uses in its business. The amount received by the company is more than the amount the asset is carried at in the accounting records. The company will report a(n)

Gain

Which is greater, net or gross pay?

Gross

What is physical inventory?

Inventory you can physically go count

What taxes do the employer also pay?

Medicare and social security

What is NSF

Non-sufficient funds

Mark wrote $123 but he was supposed to write $132. What kind of error is this?

Transposition

What is a w-2 form

Used to report wages paid to employees and the taxes withheld from them

Is depreciation an expense to a company?

Yes

Crediting the estimated value of uncollectible accounts to a contra account is the

book value of Accounts Receivable

The total of the Purchases journal is posted as a credit to the _____ account.

purchases

Employee regular earnings are calculated as

regular hours times regular rate

The best way to manage multiple bank accounts would be to

set up the accounts online