Archives: Quiz

Entering financial information about events into the accounting system is called ____________________. Businesses might set up special journal columns for different accounts depending on the frequency of their use. Answer: T ____________________ are items that the bank adds to a […]

Payment of rent decreases the Cash account. The purpose of accounting is to provide financial information about a business to individuals and organizations. Answer: T Plant assets provide benefits over a long period of time. Answer: T ____________________ are deposits […]

The term “cash” has several different meanings. Items that are owned by a business and will provide future benefits are called ____________________. Answer: assets ____________________ design the accounting information system and focus on analyzing and interpreting information. Answer: Accountants In […]

The ____________________ process gives zero balances to the temporary accounts so that they can accumulate information for the next accounting period. The cash basis of accounting is used by some small businesses and by most individuals for tax purposes. Answer: […]

The outputs from a manual or an electronic payroll accounting system include all of the following EXCEPT a. payroll checks. b. a payroll register. c. an employee earnings record. d. time cards. Which of the following steps of the accounting […]

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: Answer: Answer: C Individual entries are posted from which of the following columns […]

The federal unemployment tax is levied on a. employers and is not deducted from employees’ earnings. b. employees and is deducted from their earnings. c. employers and is deducted from employees’ earnings. d. employees and employers. Vince Lupino works for […]

Supplies originally cost $500, but only $150 worth of supplies were used this period. The adjusting entry would be a. debit Supplies Expense, $150; credit Supplies, $150. b. debit Supplies Expense, $350; credit Supplies, $350. c. debit Supplies, $150; credit […]

Which of the following would be placed in the “Post. Ref.” column to indicate that the amount is not posted individually? a. the abbreviation “CJ” b. an “x” c. a dash d. a check mark Form 941 is a(n) a. […]

The bank statement for a checking account normally shows the a. amounts of deposits to be made. b. amount of deposits and other credits added during the period. c. checks written but not yet cashed. d. amounts to be collected […]

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 […]

Using the following information, prepare the journal entries to: Answer: Each check should be identified by its a. AAB number. b. MBA number. c. CPA number. d. ABA number. Jillian Diaz receives a regular salary of $1,500 a month and […]

The petty cash payments record indicates classified expenditures as follows: Automobile Expense, $20; Supplies Expense, $12; Postage Expense, $6; and Miscellaneous Expense, $5. The transaction would include a. debiting Automobile Expense. b. crediting Supplies Expense. c. debiting Cash. d. crediting […]

If a business records revenues when earned, regardless of whether cash has been received, and records expenses when they are incurred, the accounting system is a(n) a. accrual basis of accounting. b. cash basis of accounting. c. modified cash basis […]

Ian McCarthy works for Willow Tree Homes. His rate of pay is $16.00 per hour and he is paid 1 1/2 times the regular rate for all hours worked in excess of 40 per week. During the last week of […]

Public accountants do NOT offer which of the following services? a. auditing b. tax preparation c. management consulting d. marketing analysis Meghan started her business by investing $30,000 in cash. This transaction would a. increase assets and increase owner’s equity. […]

The process of bringing the book and the bank balance into agreement is called a. reconciling the bank statement. b. proving the cash. c. preparing a statement of payment. d. preparing a statement of disbursements. Show the effects of each […]

The balance in an expense account is closed to a(n) a. capital account. b. revenue account. c. drawing account. d. income summary account. Prepare a corrected trial balance by changing incorrect amounts and placing each amount in the proper column. […]

Cash is used to pay for a car for personal use by the owner. The transaction includes a. debiting Cash and crediting Drawing. b. debiting Drawing and crediting Cash. c. debiting Capital and crediting Cash. d. debiting Car Expense and […]

Which of the following is the proper sequence for end-of-the-month work with the combination journal? a. complete the individual postings, total and rule the columns, prove the journal, complete the summary postings b. prove the journal, total and rule the […]

The account to which the drawing account is closed is called a. Revenue. b. Income Summary. c. Owner’s Capital. d. Cash. What is the correct sequence for closing the temporary accounts? a. revenue accounts, expense accounts, Income Summary, drawing account […]

The account that should be credited for the total income tax withheld from employee’s earnings is a. FICA Tax Payable. b. FICA Tax Expense. c. Employee Income Tax Payable. d. Employee Income Tax Expense. A chart of accounts does NOT […]

Receipt stubs, carbon copies of receipts, cash register tapes, or memos of cash register totals provide information about a. cash payments. b. cash receipts. c. accounts payable. d. purchases of goods or services. Employers who have less than $2,500 due […]

Identify the classifications of the following accounts as either current or long-term liabilities for the December 31, 2014 balance sheet. a. Current liability b. Long-term liability An amount of money owed to a supplier based on the terms 2/20, n/40, […]

Which one of the following events involves a liability for a business? a. Loans to be repaid to banks b. Inventories purchased for cash c. Amounts invested by the owners d. Stock sold to the general public Which of the […]

Which one of the following is an accurate description of Allowance for Doubtful Accounts? a. Contra account b. Liability account c. Revenue account d. Expense account What should a company do to improve its accounts receivable turnover rate? a. Lower […]

When using the indirect method, how is the issuing of stock for cash shown on the statement of cash flows? a. Operating activity b. Investing activity c. Financing activity d. Non cash investing and financing activity For each item listed, […]

When a note is discounted at a bank, it is normally done with recourse. a. True b. False Tulsa Corp. reported the following information for 2015 and 2016. How much cash was paid for interest during 2016? a. $11,750 b. […]

Given below is information for Xu Corporation and Yang Computers, Inc. at the end of 2016. 1) Using the information provided above, compute the following for each company at December 31, 2016: A. Current ratio B. Acid-test ratio 2) Comment […]

What effects on a retail store’s accounting equation occur when merchandise returned by customers is recorded? a. Assets and stockholders’ equity decrease. b. Assets and stockholders’ equity increase. c. Assets decrease and liabilities increase. d. Stockholders’ equity decreases and liabilities […]

Described below are several transactions which an organization like the Rogers Symphony Orchestra might record. Several accounts from the organization’s financial statements also are listed below. Using these account titles, record each transaction in proper journal entry format in the […]

Discounting a note receivable a. Requires using an account called discount on notes receivable b. Is the process of lending money c. Slows the collection process d. Is the process of selling a promissory note If a credit memo appears […]

Turnover ratios differ from the current and quick ratios in that they a. are based on working capital instead of cash. b. are based on a point of time instead of a period of time. c. are activity ratios. d. […]

The following list contains several items that appear on an income statement. Select the choice that lists the items in the order they would appear on a multi-step income statement. a. 6, 1, 7, 4, 2, 3, 5 b. 7, […]

Assuming the indirect method for preparing the statement of cash flows is used, indicate whether these items should be added to net income (A), deducted from net income (D), or not be reported in the operating section of the statement […]

Under IFRS, if inventory is written down to a new lower market value, this cannot be reversed in later periods. a. True b. False Using the following information, what is the amount of cost of goods sold? a. $26,900 b. […]

Discount on Bonds Payable is a balance sheet item for Covington Products Company. How would it most likely be classified on the balance sheet? a. Current liability b. Long-term liability c. Current asset d. Contra-liability The system of accounting in […]

The excess of current assets over current liabilities is referred to as working capital. a. True b. False Select the statement on which each of the items provided below would be reported. a. Statement of retained earnings b. Statement of […]

Baker Corp. sold merchandise to a customer on credit. The invoice amount was $1,000; the invoice date was June 10; credit terms were 1/10, n/30. Which one of the following statements is true? a. The customer can take a $10 […]

Discount on Notes Payable is treated as a reduction of notes payable on the balance sheet. a. True b. False Verilux Company sold merchandise to Flight Corp. on November 1, 2014, for $10,000. Verilux accepted a promissory note from Flight […]

From the following list, select the proper section from the statement of cashflows in whi ch it would beclassified. a. Operating Activities b. Investing Activities c. Financing Activities Sold equipment no longer used in the business The FASB standards do […]

Readers.com uses a perpetual inventory system. If Readers.com uses the moving average method, how much is cost of goods sold for the units sold on February 15? a. $245 b. $255 c. $260 d. $270 Convertible bonds are attractive to […]

Interest expense is computed annually when a bond is issued for other than its face value. For a bond issued at a discount, how will this component change as the bond approaches maturity? a. decrease b. increase c. remain constant […]

When a bond issue is retired early, the amount of unamortized discount or premium is not considered in the calculation of a gain or loss. a. True b. False Match each of the following terms pertaining to liabilities to their […]

Match the terms with the descriptions related to merchandise sales and purchases. a. Transportation-in b. Perpetual inventory system c. Net purchases d. FOB Destination e. Cost of goods available for sale f. Periodic inventory system g. FOB Shipping point h. […]

Which one of the following procedures is incorrect for setting up and maintaining a petty cash fund? a. A check is prepared for a fixed amount; when the check is cashed, the money is entrusted to a petty cash custodian. […]

Given below is a list of items that may be reported on a statement of cash flows. Identify each as one of the following using the indirect method : a. Operating b. Investing c. Financing d. Not separately reported on […]

Indicate the type of each ratio listed below. a. liquidity ratio b. solvency ratio c. profitability ratio Profit margin ratio Select the statement on which each of the items provided below would be reported. a. Statement of retained earnings b. […]

A good system of internal controls requires that the physical custody of assets be separated from the accounting for those assets. This concept is known as safeguarding assets and records. a. True b. False The participating feature of stock allows […]

The establishment of a petty cash fund has no effect on the company’s total cash balance. a. True b. False Inventories and prepaid assets are excluded from the numerator used to compute the quick ratio. a. True b. False Answer: […]