You are on page 1of 4

EXTRA CREDIT MIDTERM MATCHING Match the items below by entering the appropriate letter in the space.

. E____ G____ J____ F____ L____ I____ A____ B____ K____ 1. Partnership 2. Liquidity 3. Liabilities 4. Revenue recognition principle 5. Ledger 6. Matching principle 7. Unearned revenues 8. Materiality 9. Income summary A. A liability created when cash is received in advance of performing a service for a customer. B. The constraint of determining whether an item is large enough to likely influence the decision of an investor or creditor. C. Company will remain in business long enough to carry out its existing objectives. D. Noncurrent assets that do not have physical substance. E. An economic entity which is not a separate legal entity. F. The principle that companies recognize revenues in the accounting period in which it is earned. G. The ability of a company to pay obligations that are expected to become due within the next year. H. A contra revenue account. I. The recognition of efforts (expenses) at the same time as accomplishments (revenues).

D____ 10. Intangible assets C____ 11. Going concern assumption H____ 12. Sales discounts

J. Creditors claims on total assets. K. A temporary account used in closing revenue and expense accounts. L.___Contains all asset, liability, and stockholders equity accounts

MATCHING: FINANCIAL STATEMENT ANALYSIS Instructions Match the terms given below with the definitions or descriptions that follow by placing the appropriate letter in the space provided. A. B. C. D. _____ Liquidity Earnings per share Debt to total assets ratio Current ratio E. F. G. H. Profitability Dividends Working capital Solvency

1. Current assets divided by current liabilities.

_____ _____ _____ _____ _____ _____ _____

2. Measures of the income or operating success of an enterprise for a given period of time. 3. Distribution of cash or other assets from a corporation to its stockholders. 4. A measure of the net income earned on each share of common stock. 5. The ability of a borrower to pay obligations when they become due. 6. Measures the percentage of total assets that creditors provide. 7. Measures the ability of an enterprise to survive over a long period of time. 8. The excess of current assets over current liabilities.

TYPES OF ACCOUNTS Instructions Place a check in the appropriate column to designate whether each of the following accounts is an asset, a liability, or a stockholders equity account. ______________________________________________________________________________ Account Asset Liability Stockholders Equity ______________________________________________________________________________ 1. Service Revenue ______________________________________________________________________________ 2. Insurance Expense ______________________________________________________________________________ 3. Supplies ______________________________________________________________________________ 4. Common Stock ______________________________________________________________________________ 5. Accounts Payable ______________________________________________________________________________ 6. Salaries Payable ______________________________________________________________________________ 7. Dividends ______________________________________________________________________________ 8. Accounts Receivable ______________________________________________________________________________ 9. Prepaid Insurance ______________________________________________________________________________ 10. Mortgage Payable

______________________________________________________________________________ BALANCE SHEET CLASSIFICATIONS Instructions Match the account titles given below with the appropriate Balance Sheet classification. An individual classification may be used more than once, or not at all. An account may also not appear in the balance sheet. Classifications A. Current Assets E. Current Liabilities B. Long-term Investments F. Long-term Liabilities C. Property, Plant and Equipment G. Stockholders Equity D. Intangible Assets H. Not separately presented on the Balance Sheet Account Titles _____ 1. Common Stock _____ 2. Unearned Rent Revenue _____ 3. Supplies _____ 4. Accounts Payable _____ 5. Patents _____ 6. Salaries Payable _____ 7. Equipment _____ 8. Service Revenue _____ 9. Rent Expense NORMAL BALANCES Instructions: Place a "D" (Debit) or "C" (Credit) in the space provided to indicate whether the account has a normal debit balance (D) or normal credit balance (C). _____ _____ _____ _____ _____ 1. Retained Earnings 2. Equipment 3. Depreciation Expense 4. Dividends 5. Service Revenue _____ 6. Common Stock _____ 7. Unearned Service Revenue _____ 8. Accumulated Depreciation _____ 9. Accounts Payable _____ 10. Prepaid Rent _____ 10. Prepaid Insurance _____ 11. Bonds Payable _____12. _____13. _____14. _____15. _____16. _____17. _____18. Taxes Payable Copyrights Accounts Receivable Mortgage Payable Dividends Accumulated DepreciationEquipment Retained Earnings

MATCHING Instructions: Match the items below by entering the appropriate letter in the space. A. General Journal G. Permanent Accounts

B. C. D. E. F.

Trial Balance Time period assumption Accrual Accounting Cash Basis Accounting Matching principle

H. I. J. K.

Revenue Recognition Principle Prepayments Accrued Expenses Adjusting Entries

____ 1. Expenses incurred but not yet paid in cash or recorded. ____ 2. An assumption that the economic life of a business can be divided into artificial time period. ____ 3. Accounting basis in which a company records revenues only when it receives cash and an expense only when it pays out cash. ____ 4. The principle that companies recognize revenue in the accounting period in which it is earned. ____ 5. The most basic form of journal. ____ 6. A list of accounts and their balances at a given time. ____ 7. Accounting basis in which companies record in the periods in which the events occur rather than in the periods in which the company receives or pays cash. ____ 8. Balance sheet accounts whose balances are carried forward to the next accounting period. ____ 9. The principle that dictates accomplishments (revenues). RATIOS Lurid Company reported the following information for 2010: Beginning inventory Cost of goods sold Ending inventory Net income Net sales Operating expenses Sales Instructions Compute each of the following ratios: (a) Gross profit rate (b) Inventory turnover ratio (c) Days in inventory (d) Profit margin ratio $ 90,000 400,000 110,000 40,000 525,000 60,000 510,000 that companies match efforts (expenses) with