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39 Cards in this Set

  • Front
  • Back
Profit is the difference between:

a. assets and liabilities
b. the incoming cash and outgoing cash
c. the assets purchased with cash contributed by the owner and the cash spent to operate the business
d. the assets received for goods and services and the amounts used to provide the goods and services
Which of the following is not a step in providing accounting info to stakeholders?
a. design the accounting info system
b. prepare accounting surveys
c. identify stakeholders
d. record economic data
Which one of the following is a specialized field of accounting?
a. social accounting
b. tax accounting
c. environmental accounting
d. all of the above
the business entity concept means that
a. the owner is part of the business entity
b. an entity is organized according to state or federal statutes
c. an entity is organized according to the rules set by the FASB
d. the entity is an individual economic unit for which data are recorded, analyzed, and reported
The Reynolds company estimated that the value of its land had increased from 10000 to 16000 and therefore wrote up the land account to 16000. Which accounting concept(s) was violated?
a. cost concept
b. objectivity concept
c. all of the above
d. none of the above
John Williams owns and operates Indoor Advertising Co. Recently, John withdrew 18000 from indoor advertising, and he contributed 10000 in his name to the Red Cross. The contribution of the 10000 should be recorded on the accounting records of which of the following entities?
a. indoor advertising and the red cross
b. john williams personal records and the red cross
c. john williams persoanl records and indoor advertising
d. john williams personal records, indoor advertising, and the red cross
which of the following is not a business transaction?
a. make a sales offer
b. sell goods for cash
c. receive cash for services to be rendered later
d. pay for supplies
Al Shea is the sole owner and operator of SawTooth Co. As the end of its acctg period, dec 31, 2005, ST Co has assets of 925,000 and liabilities of 285,000. During 06 al shea invested an additional 50000 and paid dividends of 30000 from teh business. What is the amt of net income during 06, assuming that as of dec 31, 2006, assets were 980,000, and liabilities were 255000
an account is said to have a debit balance if
a. the amt of the debits exceeds the amt of the credits
b. there are more entries on the debit side than on the credit side
c. its normal balance is debit wo regard to the amts or # of entries on the debit side
d. the 1st entry of the acctg pd was posted on the debit side
Which of the following groups of accounts have a normal debit balance
a. revenues, liabilities, stockholders' equity
b. stockholders' equity, assets
c. liability, expenses
d. assets, expenses
a debit balance in which of the following accts would indicate a likely error?
a. salaries payable
b. notes payable
c. dividends
d. supplies
a patient has a physical exam and asks the bookkeeper to mail the bill. the bookkeeper should:
a. make no entry until the cash is rcd
b. debit cash and credit accounts receivable
c. debit cash and credit fees earned
d. debit accts receivable and credit fees earned
Proof that $ amt of the debits = $ amt of the credits in the ledger means
a. all the info from the journal was correctly transferred to the ledger
b. all accts have their correct balances in the ledger
c. only the journal is accurate, the ledger may be incorrect
d. only that the debit $ amts equal the credit $ amts
which of the following errors, each considered individually, would cause the trial balance totals to be unequal
a. a transaction was not posted
b. a pmt of 96 for insurance was posted as debit of 46 to pre pd insurance and a credit of 46 to cash
c. a pmt of 311 to a creditor was posted as a debit of 3111 to accts payable and a debit to accts receivable
d. cash received from customers on acct was posted as a debit of 140 to cash and a credit to 140 to accts payable
the matching concept
a. addresses the relationship between the journal and the balance sheet
b. determines whether the normal balance of an acct is a debit or credit
c. requires that the $ amt of debits = $ amt of credits on a trial balance
d. determines that expenses related to revenue can be reported @ the same time the revenue is reported
accrued expenses have
a. not yet been incurred, paid, or recorded
b. been incurred, not paid, but have been recorded
c. been incurred, not paid, and not recorded
d. been paid but have no yet been incurred
adjusting entries are
a. the same as correcting entries
b. needed to bring accts up to date and match revenue and expenses
c. optional under generally accepted accounting principles
d. rarely needed in lg companies
the balance in the pre paid rent acct before adjustment at the end of the yr is 15000, which reps 3 months rent pd on dec 1. the adj entry required on dec 31 is
a. debit rent expense 5000 credit prepaid rent 5000
b. debit prepaid rent 10000, credit rent expense 5000
c. debit rent expense 10000 credit prepaid rent 5000
d. debit prepaid rent 5000 credit rent expense 5000
the dif between the balance of a fixed asset acct and the related accumulated depreciation acct is termed
a. hist cost
b. contra asset
c. book value
d. market value
the unearned rent acct has a balance of 40000. if 3000 or the 40000 is unearned @ the end of the acctg pd the amt of the adjusting entry is
a. 3000
b. 40000
c. 37000
d. 43000
@ the end of the fiscal yr the usual adj entry for depreciation on equipment was omitted. which of the following statements is true?
a. total assets will be understated @ the end of the current yr
b. the balance sheet and income statement will be misstated but the retained earnings statement will be correct for the current yr
c. net income will be overstated for the current yr
d. total liabilities and total assets will be understated
vertical analysis can result from
a. comparing each item on balance sheets from 2 dif periods with each other
b. comparing each item on balance sheets from 2 dif companies for 2 dif periods w each other
c. comparing each item on an imcome statement w the amt of assets on the balance sheet
d. comparing each item on a balance sheet w the amt of total assets on the balance sheet
notes receivable due in 345 days appears on the
a. balance sheet in the current assets location
b. balance sheet in the fixed assets section
c. balance sheet in the current liabilities section
d. income statement as an expense
prepaid insurance is reported on the balance sheet as a
a. current asset
b. fixed asset
c. current liability
d. long term liability
adjusting entries are dated in the journal as of
a. the date they are actually journalized
b. the last day of the acctg pd
c. the first day of the acctg pd
d. the middle of the acctg pd
the post closing trial balance differs from the adj trial balance in that it
a. does not take into account closing entries
b. does not take into account adj entries
c. does not include balance sheet accts
d. does not include income statement accts
a current ratio of 4.3 means that
a. there are $4.30 in current assets available to pay each $ of current liabilites
b. the co cannot pay its debts as they come due
c. there are 4.30 in current assets for every $4.30 in current liabilities
d. there are $4 in current assets for every $3 in current liabilities
which one of the following is not a dif between a retail business and a service business
a. in what is sold
b. greatest # of new accts
c.specialized journals
d. changes in financial statements
a co using the periodic inventory sys has the following acct balances: merchandise inventory @ the beginning of the yr 4000, transport in 450, purchases 12000, purchases returns and allowances, 2300, purchases discounts 220. the cost of merch purchased is = to
a. 13930
b. 9930
c. 9489
d. 14520
the inventory sys employing acct records that continuously disclose the amt of inventory is called
a. retail
b. periodic
c. physical
d. perpetual
in credit terms of 1/10, n/30, the 1 reps the
a. # of days in the discount period
b. full amt of the invoice
c. # of days when the entire amt is due
d. % of the cash discount
Sales to customers who use bank credit cards such as mastercard or visa are generally treated as
a.sales on acct
b. sales returns
c. cash sales
d. sales when the credit card co remits the cash
when merch is returned the buyer would credit
a. merch inventory
b. purchases return and allowances
c. accts payable
d. a or b depending on the inventory sys used
a net sales to asset ratio of 1.5 means
a. assets are one and one half times as lg as sales
b. that for every $1.50 of sales there is $1 in assets
c. that for every $1.50 of assets, there is $1 of sales
d. assets are being poorly utilized
allowance for doubtful accts has a credit balance of 800 @ the end of the yr (before adjustment), and an analysis of accts in the customers ledger indicates doubtful accts of 15000. which of the following entries records the proper provision for doubtful accts?
a. debit uncollectable accounts expense, 800, credit allowance for doubtful accts, 14200
b. debit uncollectible accounts expense, 14200, credit allowance for doubtfula ccts, 14200
c. debit allowance for doubtful accts 800, credit uncollectible accts expense, 800
d. debit allowance for doubtful accts, 15800, credit uncollectible accts expense 15800
allowance for doubtful accts has a debit balnce of 500 @ the end of the yr (before adjustment) and uncollectible accts expense is est @ 3% of net sales. if net sales are 600000, the amt of the adjusting entry to record the provision for doubtful accts is
a. 18500
b. 17500
c. 18000
d. none of the above
if the allowance method of acctg for uncollectible receivables is used, what gen ledger acct is credited to write off a customer's acct as uncollectible?
a. uncollectible accts expense
b. accts receivable
c. allowance for doubtful accts
d. interest expense
the balance in allowance for doubtful accts must be carefully considered prior to the end of the year adjustment when applying which method
a. direct write off
b. estimate based on sales
c. estimate based on an analysis of receivables
d. both b and c
the # of days' sales in receivables
a. is an est of length of time the receivables have been outstanding
b. measures the # of times the receivables turn over each yr
c. is net credit sales divided by avg receivables
d. is not meaningful and therefore is not used