The third pair of columns on a 10-column work sheet prepared at the end of the period
would be the
a. Income Statement columns.
b. Adjustments columns.
c. Balance Sheet columns.
d. Adjusted Trial Balance columns.
When delivery equipment is purchased on account, the transaction to be entered by the
purchaser includes
a. debiting Delivery Equipment and crediting Accounts Payable.
b. debiting Delivery Expense and crediting Cash.
c. debiting Delivery Expense and crediting Accounts Payable.
d. debiting Delivery Equipment and crediting Cash.
The steps involved in handling all of the transactions and events completed during an
accounting period, beginning with placing data in a book of original entry and ending
with a post-closing trial balance, are referred to collectively as
a. input.
b. processing.
c. output.
d. the accounting cycle.
The accounting equation may be expressed as
a. owner’s equity = assets – liabilities.
b. revenue – expenses = net income.
c. revenue = net income – expenses.
d. liabilities – owner’s equity = assets.
Dr. Etana Jenson is a podiatrist. As of December 31, Jenson owned the following assets
related to the professional practice:
As of that date, Jenson owed business suppliers as follows:
Required:
Sue Lee paid $1,200 for office rent. This transaction would
a. increase assets and decrease owner’s equity.
b. increase assets and increase liabilities.
c. decrease assets and decrease liabilities.
d. decrease assets and decrease owner’s equity.
The simplest form of journal is one with
a. four columns.
b. three columns.
c. two columns.
d. one column.
Posting from the journal to the ledger does NOT involve which of the following steps?
a. Enter the date of each transaction in the accounts.
b. Enter the amount of each transaction in the accounts.
c. Enter the page of the journal from which each transaction is posted in the accounts.
d. Enter the description of the entry.
It is NOT necessary to post the total of which of the following columns to the related
ledger accounts?
a. the Cash Debit and Credit columns totals
b. the Wages Expense Debit column total
c. the General Debit and Credit column totals
d. the Medical Supplies Debit column total
Tyler paid $3,700 on account to the company from which equipment was purchased on
credit. This transaction would
a. decrease assets and decrease liabilities.
b. increase assets and increase owner’s equity.
c. increase assets and increase liabilities.
d. increase one asset and decrease another asset.
When an individual entry is posted from the combination journal to a ledger account,
what information is entered in the “Post. Ref.” column of the ledger account?
a. the letters “CJ”
b. the letters “CJ” and the page number
c. the letters “CJ” and the invoice number
d. the letters “CJ” and the year
Revenues
a. decrease liabilities.
b. decrease cash.
c. increase expenses.
d. increase owner’s equity.
The employer usually pays the entire cost of
a. FICA.
b. Workers’ Compensation Insurance.
c. Medical Insurance.
d. Disability Insurance.
Match the terms with the definitions.
a. direct deposit
b. electronic system
c. employee
d. employee earnings record
e. Fair Labor Standards Act (FLSA)
f. FICA taxes
g. gross pay
h. independent contractor
i. manual system
j. net pay
k. payroll processing center
l. payroll register
m. salary
n. wage-bracket method
o. wages
p. withholding allowance 1>A form used to assemble the data required at the end of
each payroll period.
2>Compensation for skilled or unskilled labor.
3>An employee’s total earnings.
4>Requires employers to pay overtime at 1 1/2 times the regular rate to any hourly
employee who works over 40 hours in a week.
5>The employee does not handle the paycheck; payment is made by the employer
directly to the employee’s bank.
6>Compensation for managerial or administrative services.
7>Exempts a specific dollar amount of an employee’s gross pay from federal income
tax withholding.
8>Payroll taxes withheld to provide Social Security and Medicare benefits.
9>Someone who works under the control and direction of an employer.
10>Employers determine the amount to withhold from an employee’s gross pay for a
specific time period from the appropriate wage-bracket table provided by the Internal
Revenue Service.
11>Gross pay less mandatory and voluntary deductions.
12>Someone who performs a service for a fee and does not work under the control and
direction of the company paying for the service.
13>A business that sells payroll record-keeping services.
14>Payroll system in which all records are prepared by hand.
15>A separate record of each employee’s earnings.
16>A computer system based on a software package that performs all payroll record
keeping and prepares payroll checks.
Compute the following:
If the owner of a company invested cash in a business enterprise, the transaction would
include
a. debiting Cash and crediting Capital.
b. debiting Capital and crediting Cash.
c. debiting Cash and crediting Revenue.
d. debiting Revenue and crediting Cash.
Falana received $7,000 in cash from a client for professional services rendered. This
transaction would
a. increase assets and increase owner’s equity.
b. decrease assets and increase owner’s equity.
c. increase liabilities and decrease owner’s equity.
d. decrease assets and decrease owner’s equity.
Examples of revenue accounts include all of the following EXCEPT
a. Wages.
b. Sales.
c. Delivery Fees.
d. Professional Fees.
Match the terms with the definitions.
a. balance
b. credit
c. credit balance
d. debit
e. debit balance
f. double-entry accounting
g. footings
h. normal balance
i. T account
j. trial balance 1>The side that increases an account.
2>To enter an amount on the right side of an account.
3>A tool used to illustrate the double-entry accounting system showing the account
title, left side, and right side.
4>The difference between the footings of an account.
5>The normal balance of liability, owner’s equity, and revenue accounts.
6>The normal balance of asset, expense, and drawing accounts.
7>A list of accounts, showing the title and balance of each account, used to prove that
the debit balances equal the credit balances.
8>The total dollar amounts on the debit and credit sides of an account.
9>A system in which each transaction has a dual effect on the accounting elements.
10>To enter an amount of the left side of an account.
The difference between the total debits and credits to an account is called a
a. balance.
b. ruling.
c. footing.
d. trial balance.
Most employers have to pay FICA and FUTA taxes.
The normal balance for an expense account would be on the ____________________
side.
Withdrawing cash from a business entity will result in an increase in owner’s equity.
Employer payroll taxes clearly are a significant cost of doing business.
A contra-account is used with a related account to bring about an increase in the net
amount of the two account balances.
Persons earning self-employment income of $400 or more must pay a self-employment
tax.
A credit increases liabilities and owner’s equity.
A debit to either the ____________________ account or a(n) ____________________
account will cause a decrease in the owner’s equity of a business.
Liabilities represent an “inside” interest in a business.
____________________ represent the amount a business charges customers for
products sold or services performed.