Accounting Test 2 (Chap 4-6)

Front 1

_____ REPRESENTS THE EXPENSE OF GOODS THAT ARE SOLD TO CUSTOMERS.

Back 1

COST OF GOODS SOLD

Front 2

_____ IS A USEFUL MEANS OF MEASURING THE PROFITABILITY OF SALES TRANSACTIONS.

Back 2

GROSS PROFIT

Front 3

TWO APPROACHES USED IN ACCOUNTING FOR MERCHANDISE INVENTORIES:

Back 3

PERPETUAL & PERIODIC INVENTORY SYSTEMS

Front 4

PAYMENTS IN ADVANCE OFTEN MADE FOR SUCH ITEMS AS INSURANCE, RENT, AND OFFICE SUPPLIES.

Back 4

PREPAID EXPENSE

Front 5

DEPR. EXPENSE (PER PERIOD)=

Back 5

COST OF THE ASSET/ EST. USEFUL LIFE

Front 6

THE SYSTEMATIC ALLOCATION OF THE COST OF A DEPRECIABLE ASSET TO EXPENSE OVER THE ASSET'S USEFUL LIFE.

Back 6

DEPRECIATION

Front 7

TO GROW OR ACCUMULATE OVER TIME; EX.) INTEREST EXPENSE

Back 7

ACCRUE

Front 8

A CONTRA-ASSET ACCOUNT SHOWN AS A DEDUCTION FROM THE RELATED ASSET ACCOUNT IN THE BALANCE SHEET. DEPRECIATION TAKEN THROUGHOUT THE USEFUL LIFE OF AN ASSET IS ACCUMULATED IN THIS ACCOUNT.

Back 8

ACCUMULATED DEPRECIATION

Front 9

ENTRIES MADE AT THE END OF THE ACCOUNTING PERIOD FOR THE PURPOSE OF RECOGNIZING REVENUE AND EXPENSES THAT ARE NOT PROPERLY MEASURED AS A RESULT OF JOURNALIZING TRANSACTIONS AS THEY OCCUR.

Back 9

ADJUSTING ENTRIES

Front 10

AN ACCOUNT WITH A CREDIT BALANCE THAT IS OFFSET AGAINST OR DEDUCTED FROM AN ASSET ACCOUNT TO PRODUCE THE PROPER BALANCE SHEET AMOUNT FOR THE ASSET.

Back 10

CONTRA-ASSET ACCOUNT

Front 11

SOMETHING OF LITTLE OR NO CONSEQUENCE.

Back 11

IMMATERIAL

Front 12

THE ACCOUNTING PRINCIPLE OF OFFSETTING REVENUE WITH THE EXPENSES INCURRED IN PRODUCING THAT REVENUE. REQUIRES RECOGNITION OF EXPENSES IN THE PERIODS THAT THE GOODS AND SERVICES ARE USED IN THE EFFORT TO PRODUCE REVENUE.

Back 12

MATCHING (PRINCIPLE)

Front 13

THE RELATIVE IMPORTANCE OF AN ITEM OR AMOUNT.

Back 13

MATERIALITY

Front 14

THE ACCOUNTING PRINCIPLE THAT GOVERNS THE TIMING OF REVENUE RECOGNITION. BASICALLY, THE PRINCIPLE INDICATES THAT REVENUE SHOULD BE RECOGNIZED IN THE PERIOD IN WHICH IT IS EARNED.

Back 14

REALIZATION (PRINCIPLE)

Front 15

THE WIDELY USED APPROACH OF RECOGNIZING AN EQUAL AMOUNT OF DEPR EXPENSE IN EACH PERIOD OF A DEPRECIABLE ASSET'S USEFUL LIFE.

Back 15

STRAIGHT-LINE METHOD OF DEPR

Front 16

AN OBLIGATION TO DELIVER GOODS OR RENDER SERVICES IN THE FUTURE, STEMMING FROM THE RECEIPT OF ADVANCE PAYMENT.

Back 16

UNEARNED REVENUE

Front 17

JOURNAL ENTRIES MADE AT THE END OF THE PERIOD FOR THE PURPOSE OF CLOSING TEMPORARY ACCOUNTS (REVENUE, EXPENSE, AND DIVIDENDS ACCOUNTS) AND TRANSFERRING BALANCES TO THE RETAINED EARNINGS ACCOUNT.

Back 17

CLOSING ENTRIES

Front 18

CASH AND OTHER ASSETS THAT CAN BE CONVERTED INTO CASH OR USED UP WITHIN A RELITIVELY SHORT PERIOD OF TIME WITHOUT INTERFERING WITH NORMAL BUSINESS OPERATIONS.

Back 18

CURRENT ASSETS

Front 19

EXISTING OBLIGATIONS THAT ARE EXPECTED TO BE SATISFIED WITH A COMPANY'S CURRENT ASSETS WITHIN A RELATIVELY SHORT PERIOD OF TIME.

Back 19

CURRENT LIABILITIES

Front 20

COMPUTER SOFTWARE USED FOR RECORDING TRANSACTIONS, MAINTAINING JOURNALS AND LEDGERS, AND PREPARING FINANCIAL STATEMENTS. ALSO INCLUDES SPREADSHEET CAPABILITIES FOR SHOWING THE EFFECTS OF PROPOSED ADJUSTING ENTRIES OR TRANSACIONS ON THE FINANCIAL STATEMENTS WITHOUT ACTUALLY RECORDING THESE ENTRIES IN THE ACCOUNTING RECORDS.

Back 20

GENERAL LEDGER SOFTWARE

Front 21

THE SUMMARY ACCOUNT IN THE LEDGER TO WHICH REVENUE AND EXPENSE ACCOUNTS ARE CLOSED AT THE END OF THE PERIOD. THE BALANCE (CREDIT BALANCE FOR A NET INCOME, DEBIT BALANCE FOR A NET LOSS) IS TRANSFERRED TO THE RETAINED EARNINGS ACCOUNT.

Back 21

INCOME SUMMARY

Front 22

FINANCIAL STATEMENTS PREPARED FOR PERIODS OF LESS THAN ONE YEAR (INCLUDES MONTHLY AND QUARTERLY STATEMENTS).

Back 22

INTERIM FINANCIAL STATEMENTS

Front 23

SUPPLEMENTAL DISCLOSURES THAT ACCOMPANY FINANCIAL STATEMENTS.

Back 23

NOTES

Front 24

A COMPARISON OF SALES FIGURES AT ESTABLISHED STORES WITH EXISTING "TRACK RECORDS".

Back 24

COMPARABLE STORE SALES

Front 25

A DEBIT BALANCE ACCOUNT THAT IS OFFSET AGAINST REVENUE IN THE INCOME STATEMENT. EX.) SALES DISCOUNTS, SALES RETURNS, AND ALLOWANCES.

Back 25

CONTRA-REVENUE ACCOUNT

Front 26

A GENERAL LEDGER ACCOUNT THAT SUMMARIZES THE CONTENT OF A SPECIFIC SUBSIDIARY LEDGER.

Back 26

CONTROL ACCOUNT

Front 27

THE COST TO A MERCHANDISING COMPANY OF THE GOODS IT HAS SOLD TO ITS CUSTOMER DURING THE PERIOD.

Back 27

COST OF GOODS SOLD

Front 28

GROSS PROFIT=

Back 28

NET SALES REV - COST OF GOODS SOLD

Front 29

GROSS PROFIT EXPRESSED AS A PERCENTAGE OF NET SALES.

Back 29

GROSS PROFIT MARGIN

Front 30

MERCHANDISE INTENDED FOR RESALE TO CUSTOMERS.

Back 30

INVENTORY

Front 31

THE LOSS OF MERCHANDISE THROUGH SUCH CAUSES AS SHOPLIFTING, BREAKAGE, AND SPOILAGE.

Back 31

INVENTORY SHRINKAGE

Front 32

GROSS SALES REVENUE LESS SALES RETURNS AND ALLOWANCES AND SALES DISCOUNTS. THE MOST WIDELY USED MEAUSURE OF DOLLAR SALES VOLUME; USUALLY THE FIRST FIGURE SHOWN IN AN INCOME STATEMENT.

Back 32

NET SALES

Front 33

THE REPEATING SEQUENCE OF TRANSACTIONS BY WHICH A BUSINESS GENERATES ITS REVENUE AND CASH RECEIPTS FROM CUSTOMERS.

Back 33

OPERATING CYCLE

Front 34

_____ ELIMINATES THE NEED FOR RECORDING THE COST OF GOODS SOLD AS SALES OCCUR. HOWEVER THE AMOUNTS OF INVENTORY AND THE COST OF GOODS SOLD ARE NOT KNOWN UNTIL A COMPLETE PHYSICAL INVENTORY IS TAKEN AT YEAR-END.

Back 34

PERIODIC INVENTORY SYSTEM

Front 35

A SYSTEM OF ACCOUNTING FOR MERCHANDISING TRANSACTIONS IN WHICH THE INVENTORY AND COST OF GOODS SOLD ACCOUNTS ARE KEPT PERPETUALLY UP-TO-DATE.

Back 35

PERPETUAL INVENTORY SYSTEM

Front 36

ELECTRONIC CASH REGISTERS USED FOR COMPUTER-BASED PROCESSING OF SALES TRANSACTIONS. IDENTIFIES EACH ITEM OF MERCHANDISE FROM ITS BAR CODE AND THEN AUTOMATICALLY RECORDS THE SALE AND UPDATES THE COMPUTER-BASED INVENTORY RECORDS. PERMITS THE USE OF PERPETUAL INVENTORY SYSTEMS IN MANY BUSINESSES THAT SELL A HIGH VOLUME OF LOW-COST MERCHANDISE.

Back 36

POINT-OF-SALE (POS) TERMINALS

Front 37

A MEASURE OF EFFICIENT USE OF AVAILABLE SPACE.

Back 37

SALES PER SQUARE FOOT OF SELLING SPACE

Front 38

AN ACCOUNTING RECORD OR DEVICE DESIGNED FOR RECORDING LARGE NUMBERS OF A PARTICULAR TYPE OF TRANSACTION QUICKLY AND EFFIECIENTLY.

Back 38

SPECIAL JOURNAL

Front 39

A LEDGER CONTAINING SEPERATE ACCOUNTS FOR EACH OF THE ITEMS MAKING UP THE BALANCE OF A CONTROL ACCOUNT IN THE GENERAL LEDGER.

Back 39

SUBSIDIARY LEDGER

Front 40

THE PROCEDURE OF COUNTING ALL MERCHANDISE ON HAND AND DETERMINING ITS COST.

Back 40

PHYSICAL INVENTORY

Front 41

AN ACCOUNTING CYCLE THAT BEGINS ON JUNE 1 AND ENDS THE FOLLOWING MAY 31 REPRESENTS A COMPANY'S:
A.) FISCAL PERIOD
B.) FISCAL YEAR
C.) CALENDAR YEAR
D.) BOTH A AND B
E.) BOTH A AND C

Back 41

D

Front 42

COLUMN HEADINGS ON A WORKSHEET INCLUDE WHICH OF THE FOLLOWING?
A.) TRIAL BALANCE
B.) ADJUSTED TRIAL BALANCE
C.) INCOME STATEMENT AND BALANCE SHEET
D.) TRIAL BALANCE AND ADJUSTMENTS
E.) A, B, C, AND D

Back 42

E

Front 43

THE INCOME STATEMENT CREDIT COLUMN OF THE WORK SHEET CONTAINS:
A.) REVENUE ACCOUNT BALANCES
B.) ASSET ACCOUNT BALANCES
C.) LIABILITY ACCOUNT BALANCES
D.) EXPENSE ACCOUNT BALANCES
E.) NONE OF THESE

Back 43

A

Front 44

ASSETS CREATED BY PAYMENTS THAT EXPIRE AS THEY ARE USED ARE CALLED:
A.) INTERNAL TRANSACTIONS
B.) DRAWING ACCOUNTS
C.) PREPAID ASSETS
D.) EXTERNAL TRANSACTIONS
E.) NONE OF THESE

Back 44

C

Front 45

WAGES PAYABLE ARE:
A.) WAGES THAT HAVE BEEN PAID
B.) WAGES THAT WERE OWED AND HAVE NOT BEEN PAID
C.) WAGES THAT HAVE BEEN NEITHER PAID NOR OWED
D.) WAGES THAT HAVE NOT BEEN PAID
E.) NONE OF THESE

Back 45

B

Front 46

IN WHICH COLUMNS OF A WORKSHEET WOULD THE ADJUSTED BALANCE OF PREPAID INSURANCE APPEAR?
A.) ADJUSTED TRIAL BALANCE CREDIT, BALANCE SHEET DEBIT
B.) INCOME STATEMENT CREDIT, BALANCE SHEET DEBIT
C.) ADJUSTED TRIAL BALANCE CREDIT, BALANCE SHEET CREDIT
D.) ADJUSTED TRIAL BALANCE DEBIT, BALANCE SHEET DEBIT
E.) NONE OF THESE

Back 46

D

Front 47

JENSEN COMPANY BOUGHT OFFICE EQUIPMENT ON JANUARY 4 OF THIS YEAR FOR $4,500. AT THE TIME OF PURCHASE, THE EQUIP WAS ESTIMATED TO HAVE A USEFUL LIFE OF FOUR YEARS AND A TRADE-IN VALUE OF $1,000 AT THE END OF 4 YEARS. USING THE STRAIGHT-LINE METHOD, THE AMOUNT OF ONE YEAR'S DEPR IS:
A.) $3,500
B.) $250
C.) $875
D.) $4,504
E.) NONE OF THESE

Back 47

C

Front 48

A BUSINESS FIRM PAYS WEEKLY WAGES OF $5,000 ON FRIDAY FOR A FIVE-DAY WEEK ENDING ON THAT DAY. IF THE FISCAL PERIOD ENDS ON WEDNESDAY, THE ADJUSTING ENTRY IS:
A.) DEBIT WAGES EXPENSE, $3,000; CREDIT DRAWING, $3,000
B.) DEBIT WAGES EXPENSE, $3,000; CREDIT WAGES PAYABLE, $3,000
C.) DEBIT DRAWING, $3,000; CREDIT WAGES PAYABLE, $3,000
D.) DEBIT WAGES PAYABLE, $3,000; CREDIT WAGES EXPENSE, $3,000
E.) NONE OF THESE

Back 48

B

Front 49

IF TOTAL DEBITS EXCEED TOTAL CREDITS IN THE INCOME STATEMENT COLUMNS OF A WORKSHEET:
A.) A MISTAKE HAS BEEN MADE
B.) A NET INCOME HAS OCCURRED
C.) A NET LOSS HAS OCCURED
D.) NO CONCLUSION CAN BE DRAWN UNTIL THE CLOSING ENTRIES HAVE BEEN MADE
E.) NONE OF THESE IS TRUE

Back 49

C

Front 50

WHEN POSTING ADJUSTING ENTRIES TO THE GENERAL LEDGER ACCOUNTS, WHICH OF THE FOLLOWING IS FALSE?
A.) WRITE THE WORD "CLOSING" IN THE ITEM COLUMN
B.) WRITE "ADJUSTING" IN THE ITEM COLUMN
C.) IT IS NECASSARY TO POST ADJUSTING ENTRIES TO LEDGER ACCOUNTS IN ORDER TO BRING CERTAIN ACCOUNT BALANCES UP TO DATE
D.) BOTH A AND B ARE FALSE
E.) NONE OF THESE ARE FALSE

Back 50

A

Front 51

WHEN USING THE MACRS METHOD OF DEPR, THE TRADE-IN VALUE OF THE ASSET IS:
A.) NOT TAKEN INTO ACCOUNT WHEN CALCULATING DEPR
B.) NOT TAKEN INTO ACCOUNT UNTIL THE END OF THE DEPR SCHEDULE
C.) SUBTRACTED FROM THE PURCHASE PRICE BEFORE CALCULATING DEPR
D.) ADDED TO THE PURCHASE PRICE BEFORE CALCULATING DEPR
E.) NONE OF THESE

Back 51

A

Front 52

FOR FEDERAL INCOME TAX PURPOSES, A COMPANY CAN USE WHICH OF THE FOLLOWING METHODS OF DEPR FOR ASSETS PLACED IN SERVICE AFTER DECEMBER 31, 1986?
A.) DOUBLE-DECLINING-BALANCE METHOD
B.) ACRS
C.) MACRS
D.) ALL OF THESE
E.) NONE OF THESE

Back 52

C

Front 53

CLOSING ENTRIES ARE JOURNALIZED AND POSTED TO:
A.) CLOSE THE REVENUE ACCOUNTS
B.) CLOSE THE EXPENSE ACCOUNTS
C.) CLOSE THE INCOME SUMMARY AND TRANSFER PROFIT OR LOSS TO CAPITAL
D.) CLOSE THE DRAWING ACCOUNT
E.) DO ALL OF THESE

Back 53

E

Front 54

WHICH OF THE FOLLOWING SEQUENCES OF STEPS BEST DESCRIBES THE CORRECT SEQUENCE IN THE ACCOUNTING CYCLE?
A.) SOURCE DOCUMENTS, JOURNAL, LEDGER, WORKSHEET, FINANCIAL STATEMENTS
B.) SOURCE DOCUMENTS, WORKSHEET, JOURNAL, LEDGER, FINANCIAL STATEMENTS
C.) SOURCE DOCUMENTS, LEDGER, JOURNAL, WORKSHEET, FINANCIAL STATEMENTS
D.) WORKSHEET, SOURCE DOCUMENTS, FINANCIAL STATEMENTS, LEDGER, JOURNAL
E.) NONE OF THESE

Back 54

A

Front 55

WHICH OF THE FOLLOWING ACCOUNTS SHOULD BE CLOSED TO INCOME SUMMARY AT THE END OF THE FISCAL YEAR?
A.) RENT EXPENSE
B.) CASH
C.) ACCOUNTS PAYABLE
D.) ALL OF THESE
E.) NONE OF THESE

Back 55

A

Front 56

THE FIRST STEP IN THE CLOSING PROCEDURE:
A.) CLOSES THE INCOME SUMMARY ACCOUNT
B.) CLOSES THE CAPITAL ACCOUNT
C.) CLOSES THE REVENUE ACCOUNT(S)
D.) CLOSES THE EXPENSE ACCOUNTS
E.) DOES NONE OF THESE

Back 56

C

Front 57

WHICH OF THE FOLLOWING ACCOUNTS WOULD NOT BE INVOLVED IN CLOSING ENTRIES?
A.) PREPAID INSURANCE
B.) R. LEE, DRAWING
C.) SALARIES EXPENSE
D.) R. LEE, CAPITAL
E.) NONE OF THESE

Back 57

A

Front 58

THE POST-CLOSING TRIAL BALANCE IS PREPARED FROM:
A.) THE WORKSHEET
B.) THE GENERAL JOURNAL
C.) THE CHART OF ACCOUNTS
D.) THE FINANCIAL STATEMENTS
E.) NONE OF THESE

Back 58

E

Front 59

WHICH OF THE FOLLOWING ACCOUNTS IN THE LEDGER WOULD NOT ORDINARILY APPEAR IN THE POST-CLOSING TRIAL BALANCE?
A.) DRAWING
B.) ACCOUNTS RECIEVABLE
C.) INCOME FROM SERVICES
D.) RENT EXPENSE
E.) NONE OF THESE

Back 59

B

Front 60

REVENUE IS RECORDED WHEN EARNED AND EXPENSES ARE RECORDED WHEN THEY ARE INCURRED WHEN USING WHICH OF THE FOLLOWING ACCOUNTING METHODS?
A.) ACCRUAL BASIS
B.) CASH-RECEIPTS-AND-DISBURSEMENTS BASIS
C.) MODIFIED CASH BASIS
D.) INTERIM BASIS
E.) NONE OF THESE

Back 60

A

Front 61

UNDER THE MODIFIED CASH BASIS, ADJUSTING ENTRIES ARE USUALLY MADE FOR:
A.) DEPRECIATION
B.) WAGES ACCRUED
C.) INSURANCE EXPIRED
D.) A AND C
E.) NONE OF THESE

Back 61

D

Front 62

FINANCIAL STATEMENTS PREPARED DURING THE FISCAL YEAR FOR PERIODS OF OVER TWELVE MONTHS ARE CALLED:
A.) TEMPORARY STATEMENTS
B.) INTERNAL STATEMENTS
C.) INTERIOR STATEMENTS
D.) ALL OF THESE
E.) NONE OF THESE

Back 62

E

Front 63

A PATIENT'S LEDGER RECORD CARD CAN INCLUDE:
A.) INFORMATION REGARDING COLLECTIONS
B.) PAYMENT PLANS
C.) PERSONAL INFORMATION
D.) ALL OF THESE
E.) NONE OF THESE

Back 63

D

Front 64

SPECIFICALLY NAMED COLUMNS IN A COMBINED JOURNAL:
A.) ARE USED FOR BOTH DEBITS AND CREDITS TO ANY ACCOUNT
B.) ARE SET UP TO RECORD ACCOUNTS THAT ARE USED FREQUENTLY BY A PARTICULAR BUSINESS
C.) ARE SET UP TO RECORD ACCOUNTS THAT ARE NOT USED FREQUENTLY BY A PARTICULAR BUSINESS
D.) A AND B ARE CORRECT
E.) A AND C ARE CORRECT

Back 64

B

Front 65

ON THE PATIENT'S LEDGER RECORD CARD, THE DEBITS AND CREDITS:
A.) MEAN INCREASES AND DECREASES IN THE AMOUNT OWED (TO) PATIENTS, RESPECTIVELY
B.) MEAN INCREASES AND DECREASES IN THE AMOUNT OWED (BY) PATIENTS, RESPECTIVELY
C.) MEAN THE SAME AS WITH AN ACCOUNTS PAYABLE ACCOUNT
D.) BOTH B AND C
E.) NONE OF THESE

Back 65

B

Front 66

WHICH OF THE FOLLOWING STATEMENTS IS TRUE WHEN USING A COMBINED JOURNAL?
A.) ALL THE ENTERPRISE'S ACCOUNTS ARE RECORDED IN SPECIAL COLUMNS IN THE COMBINED JOURNAL
B.) IT IS DESIGNED TO MAKE RECORDING AND POSTING TRANSACTIONS MORE EFFICIENT
C.) THE ACCOUNT NAME COLUMN IS USED TO RECORD THE TITLE OF ALL THE ACCOUNTS RECORDED IN THE COMBINED JOURNAL.
D.) ALL OF THESE ARE TRUE
E.) NONE OF THESE ARE TRUE

Back 66

B

Front 67

WHEN USING A COMBINED JOURNAL, THERE IS A(N):
A.) CASH DEBIT COLUMN
B.) CASH CREDIT COLUMN
C.) OTHER ACCOUNTS DEBIT COLUMN
D.) OTHER ACCOUNTS CREDIT COLUMN
E.) ALL OF THESE

Back 67

E

Front 68

WHICH OF THE FOLLOWING STATEMENTS ABOUT A COMBINED JOURNAL MAKE THE RECORDING AND POSTING OF TRANSACTIONS MORE EFFICIENT WHEN USING A COMBINED JOURNAL?
A.) NO EXPLANATIONS ARE GIVEN
B.) MOST TRANSACTIONS ARE RECORDED ON ONE LINE
C.) SPECIAL COLUMNS ARE SET UP FOR FREQUENTLY USED ACCOUNTS
D.) ALL OF THESE
E.) NONE OF THESE

Back 68

D

Front 69

WHEN POSTING FROM THE COMBINED JOURNAL TO THE GENERAL LEDGER ACCOUNTS:
A.) THE LEDGER ACCOUNT # IS RECORDED IN THE SPECIAL COLUMN IMMEDIATELY BELOW THE TOTAL
B.) THE LEDGER ACCOUNT # IS RECORDED IN THE POST REF. COLUMN OF THE COMBINED JOURNAL
C.) THE JOURNAL PAGE # IS RECORDED IN THE POST REF. COLUMN OF THE LEDGER ACCOUNT
D.) ALL OF THESE ARE TRUE
E.) NONE OF THESE ARE TRUE

Back 69

D

Front 70

WHEN AMOUNTS ARE LISTED IN THE OTHER ACCOUNTS COLUMNS OF A COMBINED JOURNAL, THEY ARE POSTED:
A.) SEPERATELY, ON A DAILY BASIS
B.) SEPARATELY, AT THE END OF EACH MONTH
C.) AS TOTALS, ON A DAILY BASIS
D.) AS TOTALS, AT THE END OF EACH MONTH
E.) NONE OF THESE

Back 70

A

Front 71

A PROFESSIONAL ENTERPRISE USES A COMBINED JOURNAL AS THEIR BASIS FOR RECORDKEEPING AND THEY ARE USING THE MODIFIED CASH BASIS OF ACCOUNTING:
A.) RECORDS ITEMS THAT ARE GOING TO LAST MORE THAN ONE YEAR AS EXPENSES
B.) RECORDS OFFICE SUPPLIES AS PREPAID EXPENSES
C.) RECORDS ADJUSTING ENTRIES FOR DEPR OF ASSETS
D.) ALL OF THESE
E.) NONE OF THESE

Back 71

C

Front 72

WHEN RECORDING AMOUNTS IN A COMBINED JOURNAL:
A.) CLOSING ENTRIES ARE WRITTEN RIGHT BELOW ADJUSTING ENTRIES
B.) ADJUSTING ENTRIES ARE WRITTEN RIGHT BELOW CLOSING ENTRIES
C.) INDIVIDUAL ENTRIES MUST NOT BE SPLIT BETWEEN TWO PAGES
D.) A AND C ARE TRUE
E.) B AND C ARE TRUE

Back 72

D

Front 73

ADJUSTING ENTRIES ARE NEEDED WHENEVER REVENUE OR EXPENSES AFFECT _____ ACCOUNTING PERIOD.

Back 73

MORE THAN ONE

Front 74

EVERY ADJUSTING ENTRY INVOLVES A CHANGE IN EITHER A _____ OR _____ AND AN _____ OR _____.

Back 74

REVENUE OR EXPENSE
ASSET OR LIABILITY

Front 75

_____ RECOGNIZES PORTION OF ASSET CONSUMED AS EXPENSE, AND REDUCES BALANCE OF ASSET ACCOUNT.

Back 75

ADJUSTING ENTRY

Front 76

EXAMPLES OF ASSETS TO EXPENSES:

Back 76

DEPRECIATION
SUPPLIES
EXPIRING INSURANCE POLICIES

Front 77

_____ ARE PHYSICAL OBJECTS THAT RETAIN THEIR SIZE AND SHAPE BUT LOSE THEIR ECONOMIC USEFULNESS OVER TIME.

Back 77

DEPRECIABLE ASSETS

Front 78

EXAMPLES OF LIABILITIES TO REVENUE:

Back 78

AIRLINE TICKET SALES
SPORTS TEAMS' SALES OF SEASON TICKETS

Front 79

REVENUES THAT BENEFIT MORE THAN ONE ACCOUNTING PERIOD ARE RECORDED AS _____.

Back 79

LIABILITIES

Front 80

EXAMPLES OF ACCRUING UNPAID EXPENSES:

Back 80

INTEREST
WAGES AND SALARIES
PROPERTY TAXES

Front 81

EXAMPLES OF ACCRUING UNCOLLECTED REVENUE:

Back 81

INTEREST EARNED
WORK COMPLETED BUT NOT YET BILLED TO CUSTOMER

Front 82

OPERATING CYCLE OF A MERCHANDISING COMPANY:

Back 82

1. PURCHASE OF MERCHANDISE
2. SALE OF MERCHANDISE ON ACCOUNT
3. COLLECTION OF THE RECEIVABLES

Front 83

YOUR STORE LOST $2,OOO DUE TO SHRINKAGE, POST THIS TO THE GENERAL JOURNAL.

Back 83

DEBIT- COST OF GOODS SOLD ($2,000)
CREDIT- INVENTORY ($2,000)

Front 84

2/10, n/30=

Back 84

2% DISCOUNT IF PAID IN 10 DAYS, OTHERWISE FULL PAYMENT DUE IN 30 DAYS.

Front 85

DELIVERY COSTS INCURRED BY SELLERS ARE _____ TO DELIVERY EXPENSE, AN OPERATING EXPENSE.

Back 85

DEBITED

Front 86

MOST BUSINESSES USE _____ RATHER THAN A GENERAL JOURNAL TO RECORD ROUTINE TRANSACTIONS THAT OCCUR FREQUENTLY.

Back 86

SPECIAL JOURNALS

Front 87

SALES DISCOUNTS AND ALLOWANCES ARE _____ ACCOUNTS.

Back 87

CONTRA-REVENUE