Basic Bookkeeping-300

ID

Question

Which of the following accounts is an asset account ?_____D________

Question
Image

Cash

Inventory

Accounts Receivable

All of the listed answers are correct

Which of the following accounts is a liability account ?____A_________

A

Accounts Payable

Equipment

Cash

Owner's Equity

Salaries

Which of the following is a revenue account ?_______A______

A

Sales

Inventory

Accounts Receivable

Salaries

Owner's Equity

Which of the following is an expense account ?_____C________

A

Sales

Cash

Janitorial Services

Accounts Payable

E
5

Owner's Equity

Which of the following accounts is an equity account ?____D_________

A

Accounts Payable

Cash

Equipment

Owner's Capital

Notes Payable

The left side of an account is referred to as ?______B_______

A

Increase Side

Debit Side

Credit Side

Decrease Side

Transactions are initially recorded in the ?_____C________

A

Ledger

Subsidiary Ledger

Journal

Trial Balance

Financial Statements

A record prepared to test that the debit balance accounts equal the credit
balance accounts is ?_____D________
A

the Chart Of Accounts

the General Journal

the General Ledger

a Trial Balance

an Income Statement

An entry made in the accounts receivable control account also requires an

entry to be made in ?______C_______

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the Purchases Journal

the General Journal

Accounts Receivable Subsidiary Ledger

Accounts Payable Subsidiary Ledger

The increase in owner's equity resulting from profitable business operations

is called ?______A_______
A

Net Income

Gross Revenue

Net Assets

Net Loss

Economic events that affect the financial position of a business are called
?______B_______
A

Monetary Events

Transactions

Financial Events

None of the listed answers is correct

Receiving a payment on account from a customer ?_____D________

A

Increases assets and increases assets

Increases assets and increases revenue

Decreases assets and increases revenue

Increases assets and decreases assets

Paying an amount owed to a supplier ?______C_______

A

Increases assets and increases liabilities

Decreases assets and increases liabilities

Decreases assets and decreases liabilities

D
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15

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17

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Increases assets and decreases liabilities

The current portion of long term debt is classified as ?______D_______

A

Long Term Liabilities

Current Assets

Owner's Equity

Current Liabilities

Which of the following would be added to the balance per bank when
performing a bank reconciliation ?_____A________
A

Deposits In Transit

Outstanding Checks

Bank Service Charge

None of the listed answers is correct

Which of the following would require a journal entry when performing a

bank reconciliation ?____C_________
A

Outstanding Checks

Deposits In Transit

Bank Service Charges

None of the listed answers is correct

A credit to an expense account increases the account's

balance._____B________
A

True

False

A debit to which of the listed accounts increases the account's balance

?_____A,C,E________
A

Assets

Liability

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Expense

Owner's Equity

Owner's Draw

Documents such as invoices, receipts, and checks are referred to as source

documents.______A_______
A

True

False

A debit to an account always increases the account's

balance.____B_________
A

True

False

Which of the following accounts normally have a credit ballance

?______B,C,E_______
A

Cash

Sales

Accounts Payable

Accounts Receivable

Owner's Equity

Equipment

Which of the following statements is not correct ?_____B________

A

The normal balance of an asset account is a debit balance.

The normal balance of a liability account is a debit balance.

The normal balance of a revenue account account is a credit

balance.

The normal balance of an expense account is a debit balance.

The Single Entry System records a debit and credit for each
transaction._____B________

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True

False

In addition to Cash, the Current Asset Classification includes

?___A,B,C__________
A

Accounts Receivable

Inventory

Temporary Investments

Land

Equipment

Accounts Payable

After posting closing entries all account balances are set to

zero.____B_________
A

True

False

Gross Sales are total cash and credit sales made during a
period._____A________
A

True

False

Gross Profit is calculated by deducting Cost Of Goods Sold from Net

Sales._______A______
A

True

False

A Single-Step Income Statement has a line for Gross Profit ?_____B________

A

True

False

A Balance Sheet does not include which of the following ?______D_______

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Assets

Liabilities

Owner's Equity

Expenses

Which of the following is a temporary account ?_____D________

A

Cash

Accounts Receivable

Owner's Equity

Sales

Accounts Payable

A type of business that is made up of many owners called shareholders is a

?________B_____
A

Partnership

Corporation

Sole Proprietorship

LLC

All of the listed answers are correct

A business that sells it products to another business is called a

Retailer._____B________
A

True

False

The Accrual Method of Accounting recognizes revenue (earnings) in the

period that cash is received and expenses in the period that cash payments
are made._______B______
A

True

False

______________ are properties used in the operation or investment

activities of a business.

Assets
_______________________________
35

_________________ are creditor's claims to the property (assets of a

business.

____Liabilities___________________________
36

________________ _________________is the owner's rights or claims to

the property (assets) of a business.

Owners Equity
_______________________________
37

The gross increase in owner's equity resulting from the operations and other
activities of a business is called ______________.

Revenue ; Sales; or Income

_______________________________
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39

40

A Credit is an entry in the financial records of a business that increases an

asset, expense, or draw account and decreases a liability, revenue, or equity
account._____B________
A

True

False

Profit is the amount that a business's expenses exceeds its

revenues.____B_________
A

True

False

Revenue is also called or referred to as income.______A_______

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42

True

False

A book containing the account balances for a business's assets, liabilities,

equity, revenue, expense, and draw accounts is called ?____A_________
A

the General Ledger

Trial Balance

Subsidiary Ledger

Journal

Accounting Worksheet

Decreases in owner's equity resulting from the cost of goods, fixed assets,
and services, and supplies consumed in the operations of a business are
called ______________.

expenses
_______________________________
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Bank Reconciliations are normally performed ?_____A________

A

Monthly

Yearly

Quarterly

Weekly

An example of an account that would normally have a subsidiary ledger

associated with it is ?______D_______
A

Cash

Professional Fees

None of the listed answers is correct

Accounts Receivable

Which of the following is not information normally provided by an Accounts

Receivable Subsidiary Ledger ?______D_______

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50

Amounts Owed by Each Customer

Amounts Invoiced to Each Customer

Amounts Paid By Each Customer

Amounts Owed By Each Supplier

The assets of a business are subject to two claims - those of the creditors and
those of the owners._____A________
A

True

False

Another term used to refer to the assets of a business is

property._____A________
A

True

False

All accounts that normally have a debit balance are increased with a credit
and decreased with a debit.____B________
A

True

False

Accounts that normally have a debit balance are ?___B,C,E__________

A

Revenue

Assets

Expenses

Liabilities

Draws

Owner's Equity

All of the listed answers are correct

In certain cases, an account that normally has a debit balance may end up
having a credit balance or an account normally having a credit balance may
end up having a debit balance._______A______

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54

55

56

True

False

All accounts that normally have a credit balance are increased with a credit
and decreased with a debit.____A_________
A

True

False

Which of the following accounts is not an account that normally has a credit
balance ?______A_______
A

Expense

Liability

Revenue

Owner's Capital

Which of the following is not an account that normally has a credit balance
?____D_________
A

Revenue

Owner's Equity

Liability

Asset

All accounts have a normal balnce which is either a debit or a credit

balance._____A________
A

True

False

The ledft side (column) of an account is the credit side and the right side
(column) of an account is the debit side.______B_______
A

True

False

An ________________ __________________ is a formal financial statemnt

that summarizes revenues and expenses for a period.

____income statement___________________________
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60

61

The correct order for preparing the formal Financial Statements is

?_______A,B,C,D______
A

Income Statement

Capital Statemnt

Balance Sheet

Statement Of Cash Flows

The Income Statement is a formal financial statement that shows the amount
and nature of a business's assets, liabilities, and owner's equity as of a
specific point in time.____B_________
A

True

False

A Balance Sheet is a formal financial statement that summarizes revenues

and expenses for a specific period of time._____B________
A

True

False

Which of the following is not normally included in the Chart Of Accounts

?_________D____
A

Account's Name

Account's Description

None of the listed answers is correct

Account's Balance

A Chart Of Accounts is normally grouped by Balance Sheet Accounts and

Income Statement Accounts.____A_________
A

True

B
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False

The ________________ ___ __________________ is an organized coded

listing of all the individual accounts used to record business transactions.

_chart of accounts______________________________
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65

66

Owner withdrawals by a sole proprietorship are reported in the income

statement._____B________
A

True

False

Payroll Withholdings are classified on the Balance Sheet as Long Term

Liabilities.____B_________
A

True

False

Retained Earnings is a part of Stockholder's Equity._____A________

A

True

False

An _________________ is a separate record maintained in the General

Ledger for each type of asset, liability, equity, revenue, expense, and draw
that is used to record the summarized increases and decreases using debits
and credits.

_____account__________________________
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68

Using the Periodic Inventory System, the cost of merchandise purchased is

debited to the Inventory Account._____B________
A

True

False

The cost of land on which a business's store was built should be

depreciated._______B______

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71

72

True

False

Checks received from customers, but not yet deposited in the bank should be
considered a part of a business's Cash Balance.____A_________
A

True

False

A Balance Sheet is also known as a Statement Of Financial

Position.______A_______
A

True

False

An entry to record Depreciation Expense is recorded in what Journal

?________C_____
A

Sales Journal

Purchases Journal

General Journal

Cash Payments Journal

Cash Receipts Journal

Equipment Journal

A Control Account in the General Ledger is supported by details contained in

a ________________ Ledger.

Subsidiary
_______________________________
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___________________ is the process of transferring balances from Journals

to the General Ledger.

________Posting_______________________
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Prepaid Expenses should be classified in a Balance Sheet as

?____D_________
A

Fixed Assets

Intangible Assets

Current Liabilities

Current Assets

Owner's Equity

Current Assets minus Current Liabilities is _______Working__________

Capital.

_______________________________
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A special account used to offsett the balance of another account is called a

_____contra___________ account.

_______________________________
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78

Which of the following payroll deductions is not matched by the

employer.______C_______
A

Social Security

Medicare

Income Tax

Which Financial Statement does not cover a Period Of Time._____B________

A

Income Statement

Balance Sheet

Statement Of Cash Flows

D
79

Capital Statement

If Assets are $50,000 and Liabilities are $30,000 what is Owner's Equity ?
Enter your answer as a whole dollar amount without the dollar sign.

______________20,000_________________
80

Given the following information, Assets- $100,000; Liabilities- $50,000;

Beginning Owner's Equity- $25,000 and Owner Withdrawals- $10,000 the
profit or loss for the period is _____________. Enter your answer as a whole
dollar amount without the dollar sign.

___35,000____________________________
81

Given the following balances, Ending Owner's Equity- $50,000 and Total
Liabilitie- $50,000 the amount of Total Assets is ____________. Enter your
answer as a whole dollar amount without the dollar signs.

100,000
_______________________________
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83

In a manufacturing company, inventory that is completed and ready for sale

is called ?______A_______
A

Finished Goods

Work In Process

Raw Materials

Store Supplies

Company A sells Company B $1,000 of merchandise with credit terms of

2/10/n30. If Company B takes advantage of the discount they will remit a
check in the amount of __________. Enter your answer as a whole dollar
amount without the dollar sign.

______________980_________________
84

Which of the following should not be classified in the Balance Sheet as

Property, Plant, & Equipment ?_______A______
A

Automobiles held for sale

Land used in the business

Building used as an office

Land Improvements

Machinery used in the business

F
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87

Which of the following most likely resulted from a recording error

?_____A________
A

A Credit Balance in an Expense Account

A Debit Balance in a Dividend Account

A Credit Balance in a Revenue Account

A Credit Balance in a Liability Account

The Normal Balance of any Account is ?___A__________

A

Side which increases the account

Left Side

Right Side

Side which decreases the account

In a Classified Balance Sheet, Current Assets are normally listed

?______A_______
A

In the order that they are expected to be converted into cash

(collected)

Alphabetically

By Account Number

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89

90

91

Largest dollar amounts first

None of the listed answers is correct

After transactions have been recorded in the proper Journals, they are
transferred (posted) to ?________A_____
A

General Ledger

Work Sheet

Trial Balance

General Journal

Financial Statements

Which of the following statements is not true ?______A_______

A

Expenses increase Profits

Expenses normally have debit balances

Expenses decrease Owner's Equity

None of the listed answers is correct

A credit is not the normal balance for which account listed below
?______A_______
A

Dividend Account

Revenue Account

Liability Account

Owner's Capital

Which accounts listed below are not a subcategory of Owner's

Equity._____A,B________
A

Assets

Liabilities

Revenues

Expenses

E
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Dividends/Draws

Detailed records of products held for resale are not maintained using a
?_____A________
A

Periodic Inventory System

Perpetual Inventory System

Both Systems maintain detail records

Both Systems do not maintain detail records

A T-Account is ?______A_______
A

A way of illustrating the basic form of an account

A special account in the General Ledger

A self-balancing account

All of the listed answers are correct

If Beginning Inventory is understated, the effect of this error in the current

period is ?________C_____
A

Net Earnings Understated

No Effect

Net Earnings Overstated

None of the listed answers is correct

What is it called when you divide one number by another ?____A_________

A

Ratio

Equation

Comparison

All of the listed answers are correct

Put the following in the order performed.______A,B,C,D,E_______

A

Analyze Source Document

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99

100

101

Record in Journals

Post General Ledger

Prepare Trial Balance

Prepare Financial Statements

When information is needed about customer balances owed and if any

payments are late ?_______A______
A

an Accounts Receivable Ageing Report is prepared

an Accounts Payable Ageing Report is prepared

A Trial Balance is prepared

a Balance Sheet is prepared

An account that normally requires an Adjusting Entry is Prepaid

Insurance._______A______
A

True

False

Prior to closing the Income Summary Account, the account has a credit
balance if revenues exceed expenses for the period._______A______
A

True

False

The Fully Expanded Accounting Equation is ?_______A______

A

Assets=Liabilities + Beginning Owner's Equity+Additional Owner's

Investments+Revenues-Expenses-Draws

Property=Property Rights

Assets=Liabilities + Owner's Equity

None of the listed answers is correct

Match the Accounting Rule with its definition.

Matching

Choice

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104

Same accounting methods should be

applied in all periods

Consistency

Businesses should record revenue

when earned

Revenue Recognition

Expenses should be recognized and

matched with the revenues earned in
a period

Matching Concept

Time periods are used to to record

and report business transactions

Accounting Period Concept

Busineess is accounted for separately

from the owners

Business Entity Concept

Business will continue operating and

not be sold or closed

Going Concern Concept

Assets are recorded at their original

acquisition cost

Cost Concept

A business making a profit will never have any Cash Flow

problems.______B_______
A

True

False

A Cash Flow Forecast is simply an estimate of the cash coming in and going
out during a period of time.____A_________
A

True

False

Which of the following is considered to be good Cash Management practices

?_______E______
A

Maintaining an accurate check book

Making daily Cash Deposits

Preparing monthly Bank Reconciliations

Preparing Cash Forecasts

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106

All of the listed answers are correct

Granting liberal customer payment terms will normally result in improving a

business's cash flow._____B________
A

True

False

A _______________ ______________ is a document used to summarize

cash and checks received that are deposited in the bank.

_________Deposit Slip______________________
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108

109

110

111

The abbreviation NSF stands for No Such Funds._______B______

A

True

False

Direct Deposits are ?_____A________

A

Sent directly to the bank

Sent to the business PO Box

Sent to the business Street Address

All of the listed answers are correct

A Cut-Off date is the date that the bank uses to prepare your Bank Statement
as of a specified date.___A__________
A

True

False

Petty Cash is sometimes referred to as an Imprest Fund.____A_________

A

True

False

Earnings from self employment from "flow thru" types of business

organizations are subject to special rules regarding Social Security and
Medicare Taxes._____A________

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115

116

117

True

False

A business is allowed to hire anyone that they want to.____B_________

A

True

False

Form W-4 summarizes an employee's earnings and deductions for a

year.______B_______
A

True

False

Form 940 is filed each quarter to report and summarize the deductions made
from employee wages.____A_________
A

True

False

An Automobile Dealer would normally be using what type of Costing Method

for assigning costs to units sold and on hand ?______A_______
A

Specific Identification

FIFO

LIFO

Average Cost

Which of the following increases Owner's Capial ?_____A,B________

A

Revenue

Owner Investments

Expenses

Draws

None of the listed answers is correct

Unearned Revenues resulting from payments for future services is what type

of account ?______A_______

118

Liabilty

Revenue

Asset

Expense

Given the following information, Beginning Balance of Unearned Revenues$1,000; Ending Balance of Unearned Revenues- $2,000; and Advance
Payments Received- $3,000 the amount of revenue earned for the period is
_________. Enter your answer as a whole dollar amount without the dollar
sign.

2,000
_______________________________
119

Given the following information, Beginning Balance of Prepaid Insurance$3,000; Ending Balance of Prepaid Insurance- $1,000; and the Amount
Charged to Insurance Expense-$2,500 the amount of Cash Payments for
insurance for the period is _____________. Enter your answer as a whole
dollar amount without the dollar sign.

____500___________________________
120

Given the following information, Beginning Cash- $5,000; Ending Cash$10,000; and Cash Receipts- $25,000 the amount of Cash Disbursements for
the period is __________. Enter your answer as a whole dollar amount
without the dollar sign.

______20,000_________________________
121

Given the following information, Beginning Owner's Capital- $25,000; Ending

Owner's Capital- $45,000; and Owners Draws- $15,000 the Profit for the
period is ___________________. Enter your answer as a whole dollar
amount without the dollar sign.

___35,000____________________________
122

A promissory note of $10,000 has an interest rate of 10% compunded

annually. The amount of interest for a year is ______________. Enter your
answer as a whole dollar amount without the dollar sign.

_________1,000______________________
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124

125

126

Which of the following is not included in a manufacturer's product inventory

?_______A______
A

Plant & Equipment

Raw Materials

Work-In-Process

Finished Goods

Losses resulting from customers not paying the amounts they owe are
?____A_________
A

Bad Debts

Sales Returns & Allowance

Sales Discounts

Net Sales

Entries made at the end of a period to accrue revenues and expenses are
called ?______A_______
A

adjusting entries

closing entries

correcting entries

All of the listed answers are correct

Under the accrual method of accounting, the amount collected from

customer's accounts receivables should be recorded as
revenue._____B________

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129

130

True

False

Using the Periodic Inventory System , the balance in the Inventory Account
will change after each purchase and sale._____B________
A

True

False

Land, Buildings, and Equipment are often referred to as Fixed

Assets.____A_________
A

True

False

The amount of Depreciation calculated for Tax purposes can be different

than the amount calculated for Financial Reporting
purposes.____A_________
A

True

False

Checks written that have not cleared the bank are called
_________outstanding__________ checks.

_______________________________
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132

The entries used to record Depreciation Expense are recorded in what

Journal ?_______A______
A

General Journal

Sales Journal

Cash Receipts Journal

Purchases Journal

None of the listed answers is correct

Cash and other assets that can be converted into cash within a year are

___________ assets.

___________current____________________
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134

Prepaid Expenses should appear in the Income Statemnent as a Current

Asset._______B______
A

True

False

Sales minus sales discounts, sales returns, and sales allowances is called
__________ sales.

____________net___________________
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136

The account Petty Cash is normally debited when replenishing the Petty Cash
Fund.______B_______
A

True

False

Current Assets minus Current Liabilities is _________________ Capital.

_____________Working__________________
137

Which of the following accounts is a temporary account ?_______B,D______

A

Prepaid Insurance

Sales

Accounts Receivable

Bad Debt Expense

Accounts Payable

F
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140

141

142

143

Accrued Salaries & Wages

Which of the following accounts are Contra Accounts ?_______A,C______

A

Allowance for Uncollectible Accounts

Bad Debts

Accumulated Depreciation

Notes Payable

Accounts Receivable

Cash

Recording $1,000 of Advertising Expenses as Rental Expenses will cause the

Trial Balance to be out of balance._____B________
A

True

False

Sales Taxes collected but not yet paid should be reported as a Long-Term
Liability.______B_______
A

True

False

An error in counting and costing the Ending Inventory will not affect the
correct balance for Net Income.________F_____
A

True

False

Owner's Draws reduce the amount of Net Income reported for a Sole
Proprietorship.______B_______
A

True

False

Another term for Owner's Equity is Owner's ___Capital____________.

_______________________________
144

______________ and Owner's Equity are claims to the business's Assets.

Liabilities
_______________________________
145

146

147

When the terms of a sale are FOB Destination the freight charges are the
responsibility of the buyer._______B______
A

True

False

Sales Commissions are classified as ?_____A________

A

Selling Expenses

Administrative Expenses

G & A Expenses

All of the listed answers are correct

Given the following information, Total Assets- $150,000; Current Liabilities$50,000, and Working Capital- $60,000 the amount of Current Assets is
__________________. Enter your answer as a whole dollar amount without
the dollar sign.

110,000
_______________________________
148

Given the following information, Equipment Cost- $10,000; Depreciation

Expense for Year- $1,000; Year End Accumulated Depreciation- $5,000 the
book value of the equipment is __________________. Enter your answer as a
whole dollar amount without the dollar sign.

_____5,000__________________________
149

A negative cash balance will have a Credit Balance in the General

Ledger.________A_____

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151

True

False

A negative Cash Balance is classified as a Liability._____A________

A

True

False

A transaction is first recorded in a record called a ___________________.

________journal_______________________
152

153

154

Tha Cash Basis of Accounting is an acceptable accounting method per

Generally Accepted Accounting Principles (GAAP) ._____B________
A

True

False

The sum of the asset, expense, and draw accounts equals the sum of the
liability, revenue, and capital accounts._______A______
A

True

False

Given the following information, Total Assets- $50,000; Current Assets$30,000; Current Liabilities- $20,000 and Net Assets- $25,000 the Total
Amount of Liabilities is ______________. Enter your answer as a whole dollar
amount without the dollar sign.

__________25,000_____________________
155

Given the following information, Net Sales-$100,000 and Cost Of Goods Sold$50,000 the Gross Profit Percentage is ?_____A________
A

50%

50,000

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157

158

159

100%

150000

50

50.00

Advance Payments for Services not yet performed is ?_____A________

A

a Liability

an Asset

Revenue

an Expense

A buiness purchased Land with an appraised value of $200,000 for $180,000;

the Land is recorded in the books at $200,000._______B______
A

True

False

You have been asked to calculate the value of your company's inventory
using LIFO. What information do you need ?_____A________
A

The costs and quantities of the oldest items in inventory

The average cost and quantities of the items in inventory

The costs and quantities of the newest items in inventory

None of the listed answers is correct

What is the correct sequence of the accounting cycle ?____A_________

A

Source documents, journal, ledger, trial balance, financial

statements

Trial balance, source documents, journal, ledger, financial

statements

Souce documents, ledger, journal, trial balance, financial

statements

None of the listed answers is correct

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161

Offering early payment discounts will likely increase the time it takes for
customers to pay.____B_________
A

True

False

Given the following information, Cash- $5,000; Accounts Receivable$10,000; Buildings- $100,000; Goodwill- $20,000; Inventory- $25,000;
Equipment- $50,000 the amount of Current Assets is ______________. Enter
your answer as whole dollar amounts without the dollar sign.

40,000
_______________________________
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163

Which of the following are classified as fixed costs?_______C,D______

A

Utilities

Raw Materials

Depreciation

Building Rent

Sales Tax

Commissions on Sales

Your company purchased Equipment July 1, xxxx at a cost of $6,000 with a

useful life of 5 years and no salvage value. The amount of depreciation using
straight-line depreciation for the first year is ______________. Enter your
answer as whole dollar amounts without the dollar sign.

_____600__________________________
164

165

A source document used to record merchandise returned by a customer is

called a credit memorandum (memo)._______A______
A

True

False

Assigning costs to Inventory using the FIFO Method uses the most recent

(newest) costs for calculating the value of the ending

inventory.______A_______

166

167

168

169

True

False

Using the Direct Write Off method for bad debts involves recording bad debt
expense at the time an account is determined to be
uncollectible.___A__________
A

True

False

If a seller applies a credit memorandum (memo) to a customer's account,

which of the following is true.______A_______
A

Decreases the amount the customer owes

Increases the amount the customer owes

No effect on what the customer owes

None of the listed answers is correct

If a company applies a debit memorandum (memo) to a supplier's account

which of the following is true._____A________
A

The amount owed the supplier is decreased

The amount owed the supplier is increased

No effect on the amount owed to the supplier

None of the listed answers is correct

Given the following information, you are asked to prepare an invoice for the
following items; 10-units of Product X @ $10.00 ea; 5-units of Product Y @
$20.00 ea and 1-unit of Product Z @ $50.00. Sales Tax is 10% and Product Z is
Exempt. The total invoice amount including sales tax is ____________. Enter
your answer as whole dollar amounts without the dollar sign.

___270____________________________
170

The Sales Journal records all sales of goods and services on credit; but not

sales for cash._______A______

171

172

173

174

175

True

False

Accrued Salaries and Wages are ?______A_______

A

Salaries and Wages earned but not paid

Unearned Salaries and Wages

Salary and Wages Advances

None of the listed answers is correct

Which of the following is not a Current Asset ?_______A______

A

Patents

Cash

Inventory

Accounts Receivable

The Cost Of Goods Availabe For Sales is allocated between ?___A__________

A

Cost Of Goods Sold and Ending Inventory

Cost Of Goods Sold and Beginning Inventory

Purchases and Ending Inventory

Purchases and Beginning Inventory

The Cost Of Goods Available for Sales consists of the ?______A_______

A

cost of beginning inventory and the cost of goods purchased

cost of beginning inventory and the cost of ending inventory

cost of ending inventory and the cost of goods purchased

none of the listed answers is correct

International Accounting normally does not allow which method of assigning

costs to inventory ?________A_____

176

177

178

LIFO

FIFO

Average Cost

All the listed answers are permitted

An account balance is ?_____A________

A

The beginning balance of an account plus increases less decreases

The total of the credit side

The total of the debit side

Always increased by debits

Always increased by credits

If the liabilities of a business increased $10,000 and the owner's equity

decreased $5,000 during a period of time, the balance of the assets
?____A_________
A

Increased $5,000

Decreased $5,000

Can't be determined

Increased $15,000

Decreased $15,000

Which of the following account(s) appear in a Balance Sheet

?_____A,D,E,F________
A

Cash

Rent Expense

Sales

Common Stock

Fees Earned

Notes Payable

G
179

Dividends

Businesses can take the following form(s)._______A,B,C,D______

A

Sole Proprietorship

Partnership

LLC

Corporation

E
180

181

182

External users of accounting information include ?_____D________

A

Shareholders

Customers

Creditors

All of the listed answers are correct

Return On Assets is calculated by dividing Net Income by Average Total

Assets.______A_______
A

True

False

Given the following information, Beginning Retained Earnings- $15,000;

business had a Net Loss of $5,000; Common Stock- $40,000; and no
dividends were paid, the Ending Retained Earnings Balance is
_____________. Enter answer as whole dollar amount with no dollar sign.

____10,000___________________________
183

The Time Period Principle assumes that a business's financial activities can be
divided into which of the following time periods ?_______A______
A

All of the listed answers are correct

Months

184

185

186

187

188

Quarters

Years

Adjusting entries affect ?____A_________

A

Both Income Statement and Balance Sheet Accounts

Only Balance Sheet Accounts

Only Income Statement Accounts

Neither Balance Sheet Accounts or Income Statement Accounts

If a company failed to record the Depreciation Expense for a period

?_____A________
A

Expenses are understated

Revenues are overstated

Liabilities are understated

Assets are understated

The Current Ratio is calculated by subtracting Current Liabilities from Current

Assets._______B______
A

True

False

Which of the following assets is not Depreciated ?_____A________

A

Land

Computers

Store Fixtures

Buildings

Equipment

A company's Inventory Balance does not include goods on

consignment.______A_______
A

True

B
189

190

191

192

193

194

False

Goods In Transit are included in the buyer's Inventory when

?____A_________
A

the buyer is responsible for the freight

the seller is responsible for the freight

when the goods are shipped FOB Destination

All of the listed answers are correct

Quick Assets include cash, current accounts receivable, and short-term

investments.______A_______
A

True

False

A closing entry would close any balance in ?_____C________

A

Cash

Accounts Receivable

Sales

Accounts Payable

Accumulated Depreciation

The payment of a liability is recorded by a debit to the liability account and a

credit to the owner's capital account.______B_______
A

True

False

The rules for of debits and credits for expense accounts are not the same as
the rules for asset accounts._______B______
A

True

False

Revenue increases Owner's Equity and the increases in Revenue are recorded
with a Debit._____B________

195

196

197

198

199

200

True

False

A corporation is the easiest form of business to organize.______B_______

A

True

False

The Financial Statement that summarizes information about the cash inflows
and outflows during a period is ?___A__________
A

Statement Of Cash Flows

Income Statement

Balance Sheet

Capital Statement

Statement of Retained Earnings

Which of the following representations of the Accounting Equation is not

correct ?______A_______
A

Assets = Liabilities - Owner's Equity

Assets = Liabilities + Owner's Equity

Assets - Liabilities = Owner's Equity

Assets - Owner's Equity = Liabilities

The Gross Profit Method and the Retail Inventory Method are both methods
for estimating inventory amounts._____A________
A

True

False

Inventory Turnover is an activity ratio calculated by dividing Cost Of Goods

Sold by the Average Inventory for a period._____A________
A

True

False

The personal assets of the owner will not appear on the company's Balance

Sheet because of which principle._____C________

201

Historical Cost

Monetary Unit

Economic Entity

Full Disclosure

Conservatism

External users of financial statements include ?_____A________

A

All of the listed answers are correct

Creditors

Customers

Labor Unions

Investors

F
202

203

Which account is not included in the Income Statement ?____A_________

A

Accumulated Depreciation

Depreciation Expense

Sales Revenue

Advertising Expense

Interest Expense

If Sales are $100,000 and the Gross Profit Margin is 20%, the amount for
Cost Of Goods Sold is _____________. Enter your answer as a whole dollar
amount without the dollar sign.

_________80,000______________________
204

If a company has a balance of $100,000 in Owner's Equity, which of the

following statements is true?____A_________

205

206

207

208

assets minus liabilities equals $100,000

total assets equal $100,000

net income equals $100,000

a total of $100,000was invested by the owner

none of the listed answers is correct

On which Financial Statement would the description "For The Period Ending"
not appear ?____A_________
A

Balance Sheet

Income Statement

Statement of Owner's Equity

Statement Of Cash Flows

What does the income statement report ?______A_______

A

profitability

liquidity

solvency

all of the listed answers are correct

Which of the following types of organizations is a "flow thru" type of

organization in regards to income taxes ?_____A,B,D,E________
A

Partnership

LLC

Corporation

Sub-S Corporation

Sole Proprietorship

The accounts known as Real Accounts are ?________A_____

A

Permanent Accounts

209

210

211

212

213

Temporary Accounts

Reported in the Income Statement

Begin with a zero balance after the books are closed

The accounts known as Nominal Accounts are ?_____A________

A

are temporary accounts

are permanent accounts

have balances in the account after closing the books

none of the listed answers is correct

Real Accounts are also referred to as Permanent Accounts.______A_______

A

True

False

What Accounting Rule requires deprecation expenses to be recorded

?_________A____
A

Matching Rule

Historical Cost Rule

Conservatism Rule

Entity Rule

The account Unearned Revenue is reported in ?_____A________

A

Balance Sheet as a Liabilty

Income Statement

Balance Sheet and Income Statement

Balance Sheet as an Asset

Failure to record Accrued Wages will not affect the balance of Total
Assets._______A______
A

True

B
214

215

False

A service company that does not sell any products Income Statement does
not contain which of the floowing ?_____A________
A

Cost Of Goods Sold

Revenues

Expenses

Net Profit/Loss

The followwing three items are sold - Item 1 $100, Item 2 $200, and Item 3
for $300. If the Sales Tax Rate is 10% and Item 3 is Exempt, the amount for
Sales Tax is ___________. Enter your answer in whole dollar amounts
without the dollar sin.

30
_______________________________
216

217

218

219

If Ending Inventoy is understated, then Net Income is

understated.______A_______
A

True

False

If Ending Inventory is overstated, then Net Income is

overstated.______A_______
A

True

False

If Beginning Inventory is overstated, then Net Income is

understated._______A______
A

True

False

If Beginning Inventory is understated, then Net Income is

overstated._____A________
A

True

B
220

221

222

223

False

The Cost Of Inventory is deducted in the Income Statement when

?______A_______
A

Sold

Purchased

Paid For

None of the answers are correct

All of the following are Short Term Liquid Assets except ?_____A________
A

Inventory

Cash

Accounts Receivable

Certificates of Deposit

If Current Liabilities are understated in the Balance Sheet, what other

category in the Financial Statements is misstated ?_____A________
A

Expenses

Revenues

Total Assets

Current Assets

Which of the following liabilities is an example of a liability that is most likely

estimated ?______A_______
A

Vacation Wages Payable

FICA Taxes Payable

Employee Income Tax Withheld

Accounts Payable

E
224

Expenditures for property, plant, and equipment are charged to long-term

asset accounts because of which Accounting Rule ?_____A________

225

226

227

228

229

230

Matching Rule

Cost-Benefit Rule

Conservatism Rule

Monetary Rule

Double-Entry Rule

A document issued conveying ownership in a corporation is called a stock

certificate.______A_______
A

True

False

Withdrawal of money from a sole proprietorship by the owner is not an

expense but a reduction of capital._____A________
A

True

False

Beginning Inventory plus Purchases equals Sales.___B__________

A

True

False

Beginning Inventory plus Purchases equals Cost Of Goods

Sold.______B_______
A

True

False

Bad Debt Expense appears in the Balance Sheet and the Allowance for
Uncollectibles appears in the Income Statement.____B_________
A

True

False

Which of the following is not a source of Cash ?____A_________

A

Purchase of Goods for Cash

231

Cash Sale

Payment on a Customer's Account

Loan from a Bank

The most liquid asset and subject to theft and fraud is _______________.

___________cash____________________
232

All disbursements except petty cash payments should be made by

__________.

check
_______________________________
233

234

235

Which Form will have information about an employee's number of

exemptions ?_________A____
A

W-4

W-2

940

941

When usage rather than time is the key factor, the straight-line method of
depreciation is the preferred method to use.____B_________
A

True

False

Which of the following is an Asset ?_______A______

A

Machinery Owned

Overdrawn Bank Balance

Amount Owed to A supplier

All of the listed answers are correct

236

237

238

239

240

Which of the following is a Liability ?______A_______

A

Overdrawn Bank Account

Amount Owed By A Customer

Owned Building

Owned Patent

Which of the following Equations are not correct ?____C,D_________

A

Assets-Liabilities=Owner's Equity

Assets-Liabilities=Net Worth

Liabilities-Capital=Assets

Owner's Equity=Assets+Liabilities

Assets=Liabilities+Owner's Equity

Which of the following statements is correct ?____A_________

A

Record an increase to an Asset with a debit

Record a decrease to Capital with a credit

Record an increase to a Liability with a debit

Record a decrease to a Liability with a credit

Record an increase to Revenue with a debit

If an incorrect amount, such as $900 is recorded as $90 in the correct

accounts, the Trial Balance will not balance._______B______
A

True

False

If a company's Gross Profit % is 50% and and Cost Of Goods Sold is $200,000
the Sales Amount is ____________. Enter your answer in a whole dollar
amount without the dollar sign.

________400,000_______________________

241

242

The purchase of Equipment is charged to an Equiipment Expense

Account._______B______
A

True

False

If an item sells for $10 and costs $5, the Gross Profit % is _______ %.

__________50_____________________
243

If an item costs $10 and you want a 50 % Gross Profit on the item, the item
should sell for __________. Enter your answer as a whole dollar amount
without a dollar sign.

__________20_____________________
244

245

246

A firm's Gross Profit % is 20%. It's markup on cost is ?_______A______

A

25 %

16.7 %

22 %

30 %

The mark-up on the cost of an item that costs $500 and sells for $600 is
?_____A________
A

20 %

25 %

16.7 %

33.3 %

66.7 %

If cost is $1.00 and you mark up cost 100% to arrive at your selling, the sales
price is ?_______A______

247

248

249

250

251

$2.00

$1.50

$3.00

None of the answers is correct

$1.25

$1.75

Goodwill is classified as ?____A_________

A

An Intangible Asset

Property, Plant, & Equipment

Current Liabilty

Owner's Equity

Current Asset

A Prior Period Adjutment is a correction of an error posted to the current

period.______B_______
A

True

False

The balance in the Retained Earnings Account represents the total profits
and/or losses and any distributions to owners since
the business began operations.______A_______
A

True

False

When an Asset increases because a Liabilty increases,the Asset is credited

and the Liability is debited.____B_________
A

True

False

Which of the listed increase Owner's Equity ?____A,B_________

252

253

254

255

Owner invests money in his business

Business has a profit

Business incurs an expense

Business borrows money froma bank

Business collects money on a customer's account

Business purchases an asset

When a business provides goods or services before receiving the cash

payment, what type of asset is created ?_______A______
A

Accounts Receivable

Accounts Payable

Property & Equipment

Customer Advance

Quick Assets include Cash, Marketable Securities, Receivables, and

Equipment._____B________
A

True

False

The Current Ratio is calculated by subtracting Current Liabilities from Current

Assets._____B________
A

True

False

The money used to start a business is known as ?_______A______

A

Capital

Income

Profit

Draws

256

When goods or services are paid for at the time of sale, it's called a
____________ transaction.

________cash_______________________
257

258

259

260

Recording in the left hand side of an account is known as crediting the

account.___B__________
A

True

False

The party to whom a check is made payable to is called the

drawer.______B_______
A

True

False

The major purpose of a Trial Balance is to locate transactions that have not
been recorded.________B_____
A

True

False

Given the following information; Sales- $50,000, Expenses-$20,000, and a

Gross Profit of 20% of Sales, The Cost Of Sales Amount is ________________.
Enter your answer as a whole dollar amount without the dollar sign.

40,000
_______________________________
261

262

If the Begiining Inventory and the Ending Inventory are the same, Cost of
Goods Sold is equal to the Purchases for the period.________A_____
A

True

False

The amount of Working Capital and Net Current Assets is the

same.______A_______

263

True

False

Given the following information; Fixed Assets- $ $15,200, Current Assets$$7,800, Owner's Capital- $19,900,and Long-Term Liabilities- $1,000 the
amount of Current Liabilities is _______________.Enter your answer as a
whole dollar amount without the dollar sign.

_______2,100________________________
264

265

266

Sales Returns are added to Sales in computing Net Sales._______B______

A

True

False

Interest earned on a Certificate of Deposit is normally recorded in what

Journal ?________A_____
A

General Journal

Purchases Journal

Cash Receipts Journal

Cash Payments Journal

Given the following information; Beginning Inventory- $100,000, Ending

Inventory- $80,000, and Cost of Goods Sold- $90,000 the amount of
Purchases for the period is _____________. Enter your answer as a whole
dollar amount without the dollar sign.

______________70,000_________________
267

Which of the following would not be paid from a Petty Cash Fund
?___A__________
A

Salaries & Wages

Postage

268

269

Cleaning Supplies

Office Supplies

If the amount of Cash plus the Amount of Petty Cash Vouchers are less than
the Petty Cash Funds normal balance, a Shortage has
occured.______A_______
A

True

False

Given the following information; Beginning Accounts Receivable$100,000,Ending Accounts Receivable- $90,000,Sales On Account-$$110,000
the amount of Cash Collected during the period is _____________. Enter
your answer as a whole dollar amount without the dollar sign.

_________120,000______________________
270

271

272

A Credit Balance in a customer's account can result from which of the

following ?_____A________
A

Return of a product sold

Sale made for Cash

Sale made on Account

All of the listed answers are correct

Raw Materials and Manufacturing Wages are examples of ?____A_________

A

Direct Costs

Indirect Costs

Manufacturing Overhead

Period Operating Expenses

Which of the folloein is not a Prime Cost ?______A_______

A

Depreciation

Direct Labor

273

274

275

276

277

278

Raw Material

None of the listed answers is correct

Valuing Inventory at lower of cost or market is an application of what

Accounting Rule ?______A_______
A

Conservatism

Matching

Materiality

Double Entry

Income and Expense Accounts are always associated with a Period Of

Time.________A_____
A

True

False

THe most common reason for the opportunity to commit fraud is that too
much authority or responsibility is give to one employye.________A_____
A

True

False

Debt Ratios are also called Leverage Ratios.________A_____

A

True

False

In Cost Accounting which of the following is not a Period Expense

?______A_______
A

Shop Foreman Wages

Sales Commissions

Advertising

Interest Expense

Not any Service Type of businesses need a Cost Of Sales

Account.______B_______

279

280

281

282

True

False

What form is used to verify that a job applicant can be legally hired
?_____A________
A

I-9

W-2

W-4

941

An Exempt Employee is an employee who is exempt from the Fair Labor

Standards Act._____A________
A

True

False

Salaried Employees are normally paid based on the nuber of hours they
work.____B_________
A

True

False

____________ ________________ are used as an aid in preparing Financial

Statements.

____Work Sheets___________________________
283

284

Accounting is sometimes referred to as the Language Of

Business._____A________
A

True

False

Which of the following would appear in a company's Balance Sheet

?_____C________
A

Vehicle owned by an owner

285

286

287

288

289

Money in the Owner's Personal Checking Account

Building owned and used by the business

Employees

Money in the Business Checking Account

The amount of Revenue is always equal to the amount of Cash

Receipts._____B________
A

True

False

Which of the following affect the Net Income of a business using the accrual
basis ?___A,B,C__________
A

Cash Sale to a customer

Charge Sale to a customer

Sales Return from a customer

Cash collected from a Sale On Account

Generally Accepted Accounting Principles(AAP) require a Budget as one of

the Formal Financial Statements prepared._____B________
A

True

False

Which of the following Financial Statements discloses the total amount of

Fixed Assets ?_______A______
A

Balance Sheet

Income Statement

Statement of Owner's Capital

Cash Flow Statement

The term "Bottom Line" refers to which Financial Statement

?_____A________
A

Income Statement

290

291

292

293

294

Balance Sheet

Cash Flow Statement

Statement of Owner's Capital

None of the listed answers is correct

Which of the following statements contains the term Gross Profit

?______A_______
A

Income Statement

Balance Sheet

Statement of Owner's Capital

Cash Flow Statement

None of the listed answers is correct

Net Worth, Owner's Equity,and Fund Balances are all representations of

Residual "Owner" Claims.____A_________
A

True

False

What Account links the Income Statemnt to the Balance Sheet

?____A_________
A

Owners Capital Account

Cash Account

Accounts Payable Account

Fixed Asset Account

The Book Value of Fixed Assets is always the same as their Market
Value.______B_______
A

True

False

The Cash Method of Accounting is being used when the accounts Accounts
Receivable and Accounts Payable are being used._____B________

295

296

297

298

299

300

True

False

Which of the following asset accounts is the most liquid ?_____A________

A

Cash

Inventory

Equipment

Accounts Receivable

Notes Receivable

Total Variable Costs stays the same no matter how many units are
produced._______B______
A

True

False

A business's Cash Flow will improve with a longer Cash Conversion

Cycle.____B_________
A

True

False

Incurring debt obligations is always bad._____B________

A

True

False

The Balance Sheet, Income Statement, and Owner's Capital Statement are
summaries of the General Ledger Account Balances.____A_________
A

True

False

The term "Bottom Line" refers to ?______A_______

A

Net Profit/Loss

Owner's Capital

Net Assets

Net Worth