Purchase invoices received from suppliers provide information about
a. cash receipts.
b. sales of goods.
c. purchases of goods or services.
d. cash payments.
Compute the following:
Individual entries are posted from which of the following columns in the combination
journal to the proper general ledger account?
a. Post. Ref. column
b. Date column
c. Cash Credit column
d. General Debit column
Examining a transaction or event to determine its fundamental significance to the
business so that the relevant information may be properly processed is called
a. recording.
b. analyzing.
c. classifying.
d. interpreting.
In reconciling a bank statement, the bank statement balance is $1,000 and the balance
per books is $1,205. A bank service charge is $5; a deposit in transit totals $500; and
outstanding checks total $300. The journal entry for a bank service charge would
include
a. debiting Cash and crediting Miscellaneous Expense.
b. debiting Cash and crediting Owner’s Capital.
c. debiting Accounts Payable and crediting Cash.
d. debiting Miscellaneous Expense and crediting Cash.
A form of balance sheet that lists the liabilities and the owner’s equity sections below
the assets section is called the
a. account form.
b. journal form.
c. report form.
d. current form.
To use an ATM machine, the depositor must have a
a. Bank number.
b. PIN number.
c. BIN number.
d. TIN number.
Match the terms with the definitions.
a. restrictive endorsement
b. bank reconciliation
c. bank statement
d. blank endorsement
e. canceled checks
f. petty cash fund
g. payee
h. check
i. check stub
j. petty cash payments record
k. NSF checks
l. deposit ticket
m. deposits in transit
n. drawee
o. drawer
p. electronic funds transfer
q. endorsement
r. magnetic ink character recognition code
1>A report used to bring the book and bank balances into agreement.
2>The depositor’s checks paid by the bank during the bank statement period.
3>A process using a computer rather than paper checks to complete transactions with
the bank.
4>A statement of account issued by a bank to each depositor once a month.
5>A form showing a detailed listing of items being deposited.
6>The bank on which the check is drawn.
7>A fund established to pay for small items with cash.
8>In some checkbooks, a document attached to a check that contains space for relevant
information about the check.
9>Deposits that have not reached or been recorded by the bank before the bank
statement is prepared.
10>The person being paid the cash.
11>Stamping or writing the depositor’s name and sometimes other information on the
back of the check.
12>An endorsement where the depositor simply signs the back of the check, making the
check payable to any bearer.
13>An endorsement where the depositor adds words such as “For deposit” to restrict
the payment of the check.
14>The character code used to print identifying information on the lower left front side
of each check.
15>Checks deposited by the depositor that are not paid because the drawer did not have
sufficient funds.
After estimating its payroll for the year, an employer usually pays workers’
compensation insurance
a. at the beginning of the year.
b. monthly.
c. quarterly.
d. at the end of the year.
A credit
a. increases assets.
b. is on the right side.
c. decreases liabilities.
d. decreases owner’s equity.
The Posting Reference column of the journal provides a cross-reference between the
a. ledger and accounts.
b. journal and ledger.
c. ledger and financial statements.
d. journal and financial statements.
When all taxes have been paid, the Social Security Tax Payable account will have
a. a debit balance.
b. a credit balance.
c. a zero balance.
d. equal debit and credit balances.
Use the adjusted trial balance below. a. For each account, open a T account, title the
account, and place its balance in it.
b. Prepare closing entries in general journal format.
c. Post closing entries to the T accounts. Give each entry a reference letter.
d. Prepare a post-closing trial balance.
A self-employment tax is a contribution to the
a. charities of the individual owner’s choice.
b. SUTA programs.
c. FUTA programs.
d. Social Security and Medicare programs.
To reconcile the bank statement, which of the following amounts would be subtracted
from the bank statement balance?
a. service charge
b. outstanding checks
c. deposits in transit
d. amounts collected by the bank for the depositor’s account
Corrections in accounts should be made by
a. correction fluid.
b. neat erasure.
c. the ruling method.
d. a permanent marker.
A purchase of an asset on account
a. increases cash.
b. decreases owner’s equity.
c. increases assets.
d. decreases expenses.
The purchase of an asset on account and making a partial payment results in all of the
following EXCEPT
a. an increase in an asset account.
b. a decrease in the Cash account.
c. a balanced accounting equation.
d. an increase in owner’s equity.
An example of an expense is
a. investments.
b. supplies consumed.
c. prepaid insurance.
d. withdrawals by the owner.
A contra-asset has a debit balance.
The flow of data through the accounting information system includes analyzing
transactions, journalizing, posting, and preparing a trial balance.
A(n) ____________________ can be prepared daily, weekly, monthly, or whenever
desired to prove the equality of the debits and credits in the ledger accounts.
The Modica Spa pays its employees time and half for all hours in excess of 40 hours per
week. Employees are paid every Friday. The following information is from the payroll
register for December 4. All employees are single. Number the checks beginning with
213.
The Social Security tax rate is 6.2% and the Medicare tax rate is 1.45%. Required:
The Social Security, Medicare, and FUTA tax accounts are debited when the taxes are
actually paid to the IRS.
The ____________________ is generally established to pay for small items with cash.
Revenue accounts normally have debit balances.
An electronic payroll system is one in which data is processed using computers
equipped with payroll software.
The ____________________, sometimes called the profit and loss statement, reports
the profitability of business operations for a specific period of time.