Assets
Divided into two types of equity, claims by creditors and/or claims by the owner.
Assets decrease; owner's equity decreases
How does the owner withdrawing cash from the business affect the accounting equation?
accounting
Information system that provides reports to stakeholders.
owner's equity
____ is not considered an asset.
Drawing
A credit signifies a decrease in____.
Expense with a debit balance
The classification and normal balance of the supplies expense account is a (an)
Assets, expenses
Which of the following groups of accounts have a normal debit balance?
Accounts
Records of increases and decreases in individual financial statement items.
debit
A____ may signify a (an) decrease in liability accounts.
when the services are rendered w/o regard to when cash is received.
Using accrual accounting, revenue is recorded and reported only_____.
when they are incurred, whether or not cash is paid.
Using accrual accounting, expenses are recorded and reported only_____
Adjusting entries
______ are needed to bring accounts up to date and match revenue and expense.
Matching concept
Determines that expenses related to revenue be reported at the same time the revenue is reported.
Verify that the debits and credits balance.
What is the purpose of the adjusted trial balance?
indicates there is an error on the worksheet.
The difference between the totals of the debit and credit of the Adjusted Trial balance columns on a work sheet_____.
No financial statement
On which financial statement will Income summary be shown?
Closing Entries
Must be journalized and posted
The worksheet
Which of the following is not an essential part of the accounting records?
Sales Discounts credit column
Cash payments journal would not include a___.
January 31 for Accounts Payable
The total of the Accounts Payable Subsidiary ledger at January 31 should equal the amount reported in the post-closing trial balance at___.
General Journal
Which journal would adjusting entries be found?
Subsidiary ledger
Every controlling account must have its own____
Accounts receivable subsidiary ledger
Each individual entry in the Revenue Journal is posted to____
Income Operations
Gross profit minus operating expenses is equal to
Current Asset
Merchandise inventory is classified on the balance sheet as a_____
seller
Who pays (bears) the freight costs when the terms are FOB destination?
Sales
Generally, the revenue account for a merchandising business is entitled____
Returning inventory that is defective or broken
Which of the following is not an example for safeguarding inventory?
Last-in-first out
The inventory method that considers the inventory to be composed of the units of merchandise acquired earliest is called____
Net realizable value
Damaged merchandise that can only be sold at prices below cost should be valued at___
Part of the internal control system
The bank reconciliation is
Book Errors
Journal entries based on the bank reconciliation are required in the depositor's accounts for____
Establishing the fund
Entries are made to the petty cash account when___
Deduction from the balance per bank statement
The amount of the outstanding checks is included on the bank reconciliation as a(an)
compensating balance
A minimum cash balance required by a bank is called
Money claims against other entities
The term "receivables" includes all____
Contra asset, credit
The type of account and normal balance for Allowance for Doubtful accounts is____
Direct write-off method and the allowance method
Two methods of accounting for uncollectible accounts are the _____
Maturity Value
The amount of the promissory note plus the interest earned on the due date is called the_____
Asset Account
A capital expenditure is a debit to____
Residual Value
A fixed assets estimated value at the time is to be retired from service is called____
Trademark
The exclusive right to use a certain name or symbol is called a____
Patents
Which intangible assets are amortized over their useful life?