Which group should make use of accounting information when determining whether to open an additional store location?
Owners and Managers
What is one reason for honest and ethical accounting practices?
To ensure clarity of accounting data for all interested parties.
Which group is an organization focused on developing GAAP within the United States?
FASB- Financial Accounting Standards Board
Which financial statement shows the results of operations for a given period?
Income Statement shows given period
Balance Sheet shows given point
From the adjusted trial balance, which account is entered in the balance sheet columns?
Owners Capital
What information does an accountant enter into the general ledger?
Credit amount
A corporation paid $5,000 for the current month's payroll. Which entry is needed?
Debit Wages Expense $5,000
Credit Cash $5,000
The accounting supervisor is reviewing a junior accountant's journal entries prior to posting to the general ledger. Which journal entry would cause the trial balance to be imbalanced?
$600 insurance bill received and paid in the same month. $600 debit to insurance expense and $60 credit to cash.
A corporation did not yet receive the September electric bill, so it decided to accrue an estimate of $1,000. What is the appropriate journal entry?
Credit to Utilities Payable
Which account is used to close revenue and expense accounts?
Income Summary
On November 30, 2014, Company A paid $6,000 rent for December and January. What would be the correct adjusting entry at the end of December to show the expiration of one month's rent?
Debit Rent Expense $3,000
Credit to Prepaid Rent $3,000
A company recently purchased a truck for $11,000 with a $1,000 salvage value. What is the proper adjusting entry to recognize $2,000 worth of depreciation on the truck for this year?
Debit Depreciation Expense for $2,000
Credit Accumulated Depreciation for $2,000
A company paid $1,800 for supplies during the accounting period. At the end of the accounting period, the company had $500 of supplies on hand. What adjustment should be entered on the worksheet?
Debit Supplies Expense $1,300
Credit Supplies $1,300
Which list includes assets held by a local small business?
Office equipment, company vehicles, and cash
Which account is on the income statement?
Sales revenue
The balance sheet is a reflection of which fundamental accounting equation?
Assets= liabilities + owners equity
What information is contained in the balance sheet and the income statement?
The balance sheet contains assets, liabilities, and owner's equity and the income statement contains revenues, expenses, and net profit/ loss.
Which financial statement shows all the expenses of doing business over a specific period of time?
Income Statement
Examination of Company A's finances show assets of $50,000 and owner's equity of $45,000. What are liabilities for Company A?
$5,000
Examination of Company A's finances show liabilities of $50,000 and owner's equity of $45,000. What are the assets for Company A?
Assets=Liability+Owner's Equity
$95,000
What would a bookkeeper debit to record the purchase of machinery with a long-term loan?
Debit Machinery
Credit Accounts Payable
What are the key components of every double-entry bookkeeping record?
At least one debit entry and at least one credit entry.
What is the next step if the trial balance debit and credit columns are not equal?
Analyze the trial balance and financial records to find the error.
A company has just purchased a new computer system for $100,000 in cash. How should this transaction be recorded?
Debit Equipment $100,000
Credit Cash $100,000
A company writes a check to purchase printer cartridges. Which account would be debited in the journal entry to record this purchase?
Debit Office Supplies
Credit Cash
Which two accounts will have adjusting journal entries to record the interest that has been incurred but not paid on a note payable?
Interest Expense
Interest Payable
Which adjusting entry is required to reflect a change in the supplies account balance?
A debit to supplies expense and a credit to supplies.
According to GAAP, when is the earliest instance that revenue should be recorded?
When the good or service has been provided
Which statement is true about the accrual basis accounting?
Revenue is recognized when earned, and expenses are recognized when incurred.
Using the cash basis method of accounting, which of the following journal entries would be correct when the company is paying for supplies?
Debit Supplies Expense
Credit Cash
A company has a lease which requires that it pays its annual office space rent in advance on December 31 of each year. On a quarterly basis this expense totals $10,000. To account for this transaction how should the rent expense be recorded on the firm's
It should be recorded as a decrease of $10,000 in the asset accounts under prepaid rent.
Smith's Consulting Services issued a check for $10,000 on December 1 to prepay the rent for the months of Dec and Jan. What Journal entry should they make?
Debit Prepaid rent for $10,000
Credit Cash for $10,000
After analyzing source documents to determine their effects on the basic accounting equation, which step should an accountant perform next?
Journalize the transactions
During which accounting cycle step do managers compare revenues, expenses, and profit from one accounting period to another?
Interpret the financial information ??
The worksheet pulls together certain information. What is this information needed for?
Enter correcting entries
Prepare the income statement ??
What information does an income summary account provide?
A summary of revenue and expenses from the point of view of the owner
Cash: 100,000
Accts Rec: 20,000
Accts Pay: 50,000
Accum. Depreciation: 20,000
Prepaid Rent: 10,000
Equp: 40,000
Firm Capital: 100,000
Cash, Acct Rec, Prepaid Rent, Equip=170,000
Acct Pay, Accum Dep, Firm Capital=170,000
Cash: 100,000
Accts Rec: 20,000
Accts Pay: 40,000
Accum Dep: 20,000
Prepaid Rent: 10,000
Equip: 40,000
Firm Capital: ???
Cash, Accts Rec, Prepaid Rent, Equip=170,000
Accts Pay and Accum Dep=60,000
170,000-60,000=110,000
Firm Capital=110,000
Cash: 10,500
Accts Rec: 35,000
Allowance for Double Accts: 2,000
Inventory: 12,500
Property, Plant, and Equip: 41,000
Taxes Payable: 15,000
Accts Pay: 8,000
Salaries Payable: 7,000
Assets:
Cash, Accts Rec, Allowance, Inventory, PPE=97,000
Liabilities:
Taxes Pay, Salaries Pay, Accts Pay=30,000
**Contra Accts are subtracted
Using numbers above, what will the owner's equity be?
$67,000
An accountant is preparing financial statements for a firm and realizes that adjustments need to be made to the financial statements based on equipment depreciation for the quarter. How will the financial statements be affected by this type of adjustment?
Depreciation expense is increased on the income statement and accumulated depreciation is increased on the balance sheet
An accountant is preparing financial statements for a firm and realizes that adjustments need to be made to the financial statements based on supplies used for the quarter. How will the financial statements be affected by this type of adjustment?
Supplies expense is increased on the income statement and supplies is decreased on the balance sheet
An accountant is preparing financial statements for a firm and realizes that adjustments need to be made to the financial statements based on increased allowances for questionable accounts receivable. How will this affect the firm's bottom line for the pe
The increased allowances for bad debt will lower the firm's net income for the period. ??
Which statement reflects effective internal controls?
Each check should be matched to an approved invoice or payment authorization. ??
Which situation is an improper use of petty cash?
$450 airline ticket for next month's travel to a conference.
What is an appropriate control over cash receipts?
Bonding Employees
While completing the bank reconciliation, two items need attention. A check that was written to pay for electricity in the amount of $180 was mistakenly recorded in the cash disbursements journal for $108. Utilities expense matched cash disbursement. Inte
Increase in utilities expense: $72
Increase in interest income: $15
Decrease in cash: $72
While completing a bank reconciliation, an accountant determines that there are $3,500 of outstanding checks and $6,000 of deposits in transit. If the unadjusted bank balance is $20,000, what is the adjust bank balance?
$17,500
Which concept dictates that a company must make adjustments to accounts receivable because each period there is a risk that not all customers will pay their account in full?
Allowance method
Which method is used when calculating uncollectible accounts expense using the income statement approach?
Percentage of net credit sales is the income statement approach.
Percentage of receivables is the balance sheet approach.
What is the required adjustments to reflect allowance for doubtful accounts?
Debit Uncollectible Accounts Expense, Credit Allowance for Doubtful Accounts
A company allows established the company posted Sales of $245,000 including $125,000 on credit. What adjusting entry should be made at year end to record the estimated expense from uncollectible accounts using the percent of net credit sales method?
Debit $6,250 Uncollectible Accounts Expense, credit $6,250 to Allowance for Doubtful Accounts
A firm sells a truck to a customer for $35,000 and the customer is required to pay for the vehicle within 90 days. How is this purchase entered on the accounts receivable ledger?
$35,000 Debit
A firm accepts returns of $2,000 worth of merchandise from a customer. How should the return be entered on the firm's accounts receivable ledger?
$2,000 Credit
A store sells a large number of goods to a customer using credit cards. Which journal should the store use to minimize the recording of these purchases?
Sales journal- Credit card companies
**For companies who do a large number of credit card sales, if not they would use accounts receivable and sales accounts that already exist.
A customer returns damaged merchandise to the seller. The selling price was $150, cost of goods sold was $100, and the sales tax charged was $18. In the seller's general journal, what is the amount debited to Sales Returns and Allowances?
$100
For a purchase return, which statement is true regarding the Purchase Account?
The Purchase Account would be directly credited to provide accurate purchase numbers
A firm receives an allowance of $300 for damaged merchandise received from a vendor. The firm is not required to return the damaged goods. How should the firm enter this into their general journal?
Debit accounts payable $300
Credit purchase returns and allowances $300
In the accounts payable ledger, a supplier's account has a beginning balance of $2,400. A transaction of $800 is posted from the purchases journal. What is the balance of the supplier's account?
$3,200 Credit
When a company purchases inventory on account, what should the journal entry include?
An increase in liabilities
Which three pieces of information are employers required to collect and maintain as part of employee payroll records?
Proof of US Employment Eligibility
Cumulative Wages Paid During the Year
Amount of Income Tax Withheld from the Employee's Pay in a Given Year
A person owns a small business and has one employee. The employee is full-time, working 40 hours per week at an hourly rate of $12. Assume a 20% federal income tax rate, 6.2% FICA rate and 1.45% Medicare tax rate. What are the wages payable for one week f
Wages: $480
Federal: $96
FICA: $29.76
Medicare: $6.96
Total: $347.28
A company employs 10 individuals. The employees are all paid piece rate $0.10 per label completed. The employees completed 4,000 pieces each this week. Assume a 15% federal income tax rate, 6.2% FICA rate, and 1.45% Medicare tax rate. What are the wages p
Wages: $400
Federal: $60
FICA: $24.80
Medicare: $5.80
Total: $309.40
A company has two salaried employees that are paid weekly.
Employee 1: $400 per week
Employee 2: $425 per week
Based on their W-4 forms, the following Federal Income taxes should be withheld for each employee.
Employee 1: $13
Employee 2: $32
The only with
Decrease in Assets:
Increase in expense:
Increase in Liabilities:
A company has a gross pay for January of $10,000.
FICA: $620
Medicare: $145
Federal: $500
SUTA: $270
FUTA: $620
Wages Payable: $8,735
To which two government agencies would a large company that is operating at a loss have to make payments?
State Government for State income taxes
Federal Government for federal taxes
Which fundamental principal requires an accounting information system to work and be consistent with the overall goals of the company?
Compatibility Principal