Reversing entries are dated on the first day of the new accounting period.
A transaction is any event that affects the financial position of the business and can be
easily estimated.
The horizontal analysis of the balance sheet is based on the comparative balance sheet.
An invoice is also known as a bill.
The balance sheet section of the worksheet includes the asset and liability accounts and
all equity accounts except revenues and expenses.
When a seller grants a sales allowance, the customer does not return any goods to the
seller.
A debit always means a decrease, and a credit always means an increase.
Maywood, Inc. signs a $11,000, 8.5%, six-month note dated November 1, 2017. The
interest expense recorded for this note in 2017 will be ________.
A) $935
B) $156
C) $468
D) $312
Which of the following statements is true of a trial balance?
A) A trial balance is the first step in the accounting cycle.
B) A trial balance is also known as a balance sheet.
C) A trial balance is a list of all accounts with their balances.
D) A trial balance is also known as the chart of accounts.
In a purchases journal, the total of the ________ column is not posted to the general
ledger.
A) Merchandise Inventory DR
B) Other Accounts DR, Amount
C) Accounts Payable CR
D) Office Supplies DR
Two methods of estimating uncollectible receivables are ________.
A) the allowance method and the amortization method
B) the aging-of-accounts-receivable method and the percent-of-sales method
C) the gross-up method and the direct write-off method
D) the direct write-off method and the percent-of-completion method
When a company uses the allowance method to measure bad debts, ________.
A) the Bad Debts Expense account is debited when an account is written off
B) the amount of bad debts expense is estimated at the end of the accounting period
C) the Allowance for Bad Debts account balance is added to the balance of the
Accounts Receivable account to arrive at the net realizable value
D) the Allowance for Bad Debts account is debited when the bad debts expense is
estimated
Which of the following deductions is paid by both the employer and employee?
A) federal income taxes
B) federal unemployment taxes
C) FICA taxes
D) SUTA taxes
Thirty years ago, Star Grocer Corporation purchased a building for its grocery store for
$30,000. Based on inflation estimates, the amount of the building has been adjusted in
the accounting records. The building is now reported at $75,000 in Star Grocer’s
financial statements. Which of the following concepts or principles of accounting is
being violated?
A) going concern assumption
B) revenue realization concept
C) economic entity assumption
D) cost principle
Which of the following is provided in a typical chart of accounts?
A) Account balance
B) Account number
C) Dates of transactions
D) Transaction amounts
Which of the following amounts could differ if a company, using the LIFO inventory
costing method, shifts from a periodic inventory system to a perpetual inventory
system?
A) ending merchandise inventory
B) sales revenue
C) purchases
D) purchase returns
On March 31, 2017, Park Place, Inc. shows the following data on its balance sheet:
Assume that Park Place sells 1,500 shares of treasury stock at $33 per share. What is
total stockholders’ equity after this transaction?
A) $6,940,500
B) $7,039,500
C) $6,979,500
D) $7,000,500