Thẻ ghi nhớ: ACC101 | Quizlet

Shareholder's equity does not include:

A. Reserves

B. Retained earnings

C. Share capital

D. Preference shares

E. Contingent assets

E. Contingent assets

A company purchased new computers at a cost of $28,000 on January 1,2010. The computers are estimated to have a useful life of 5 years and have a salvage value of 3,000. The company uses the straight-line method of depreciation. How much depreciation expense will be recorded for the computers for the year ended December 31,2010?

A. $5,000

B. $6,000

C. $3,000

D. $5,600

E. $6,500

A. $5,000

The financial statement that reports the assets, liabilities, and stockholders' (owner's) equity at a specific date is the

A. Balance sheet

B. Income statement

C. Ledger

D. General journal

E. None of these

A. Balance sheet

Tangible assets include:

A. Vehicle

B. Equipment.

C. Buildings.

D. Machinery.

E. All of these.

E. All of these.

Which accounts don't need to do closing entries?

A. Revenue

B. Income Summary

C. Non - current Liability

D. Withdrawals

E. Expense

C. Non - current Liability

Depreciation is

A. The assigning or allocating of a fixed asset's cost to expense over the accounting periods that the asset is likely to be used.

B. The assigning or allocating of a current asset's cost to expense over the accounting periods that the asset is likely to be used.

C. The assigning or allocating of an intangible asset's cost to expense over the accounting periods.

D. The assigning or allocating of a fixed asset's cost to expense over the accounting periods.

E. None of these

A. The assigning or allocating of a fixed asset's cost to expense over the accounting periods that the asset is likely to be used.

Which of the following will be presented in a direct Cashflow Statement?

A. Bad debt expense

B. Increases in Prepaid expenses

C. Gain in disposal of asset

D. Cash received from customers

E. Increases in account receivable

D. Cash received from customers

The amount of due on the maturity date of a $12,000, 60-day 8%, note receivable is:

A. $6,000.

B. $12,000.

C. $160.

D. $12,160.

E. $5,920.

D. $12,160.

Provide descriptions for this transaction:

Debit expense $2,000 and Credit supplies $2,000

A. Purchased supplies by cash

B. Used supplies

C. Counted supplies

D. Purchased supplies on credit

E. None of these

B. Used supplies

Which of the following is a liability?

A. Note payable

B. Note receivable

C. Cash

D. Inventory

E. Expense

A. Note payable

If accrues salaries were recorded on December 31 with a credit to Salaries Payable, the entry to record payment of these wages on the following January 5 would include:

A. A debit to Cash and a credit to Salaries Payable.

B. A debit to Cash and a credit to Prepaid Salaries.

C. A debit to Salaries Payable and a credit to Cash.

D. A debit to Salaries Payable and a credit to Salaries Expense.

E. No entry would be necessary on January 5.

C. A debit to Salaries Payable and a credit to Cash.

Prepaid expenses, depreciation, accrued expenses, unearned revenues, and accrued revenues are all examples of:

A. Items that require contra accounts.

B. Items that require adjusting entries.

C. Asset and equity.

D. Asset accounts.

E. Income statement accounts.

B. Items that require adjusting entries.

Which statement is true about revenue:

A. Revenue is reported in the financial statements as a liability on the balance sheet.

B. Revenue is reported in the financial statements as an asset on the balance sheet.

C. Revenue is reported in the financial statements as an owner's equity on the balance sheet.

D. Revenue is reported in the financial statements on the income statement.

E. Revenue is reported in the financial statements on the cash flow statement.

D. Revenue is reported in the financial statements on the income statement.

On 11 December, the company provided service and received $4400. What is the journal entry to record this, given that service the company provides is a subject to VAT of 10%?

A. Dr Cash 4400 Cr Service revenue 4400

B. Dr Cash 4000 Cr Service revenue 4000

C. Dr Cash 4400 Cr Service revenue 4000 Cr VAT payable 400

D. Dr Revenue 4000 Dr VAT receivable 400 Cr Cash 4400

E. Dr Service revenue 4400 Cr Cash 4000 Cr VAT payable 400

C. Dr Cash 4400 Cr Service revenue 4000 Cr VAT payable 400

At the beginning of January of the current year, a Law company has a normal balance of $50,000 for accounts receivable. During January, the company collected $14,000 from customers and provided additional services to customers on account totaling $12,000. Additional, company used service of $1,000 on credit. At the end of January, the balance in the accounts receivable account should be:

A. $49,000.

B. $48,000.

C. $36,000

D. $26,000

E. $76,000

B. $48,000.

Which statement is true?

A. Current liabilities include accounts receivable, unearned revenues, and salaries payable.

B. Current liabilities include prepayment, unearned revenues, and salaries payable

C. Current liabilities include revenue, unearned revenues, and salaries payable.

D. Current liabilities include accounts payable, unearned revenues, and salaries payable.

E. Current liabilities include expense, unearned revenues, and salaries payable.

D. Current liabilities include accounts payable, unearned revenues, and salaries payable.

The summary amounts below appear in the Income Statement and Balance Sheet columns of a company's December 31 work sheet. Prepare the necessary closing entries into INCOME SUMMARY

Asset: $15,000 Liability: $14,000 Revenue: $10,000 Withdrawal: $1,000

A. Debit Revenue: $10,000 Credit Income summary: $10,000

B. Debit Income summary: $10,000 Credit Revenue: $10,000

C. Debit owner capital: $10,000 Credit Revenue: $10,000

D. Debit owner capital: $1,000 Credit Withdrawal: $1,000

E. Debit Withdrawal: $1,000 Credit owner capital: $1,000

A. Debit Revenue: $10,000 Credit Income summary: $10,000

Journal entries recorded at the end of each accounting period to prepare the revenue, expense, and withdrawals accounts for the upcoming period and to update the owner's capital account for the events of the period just finished are referred to as:

A. Adjusting entries.

B. Closing entries.

C. Final entries.

D. Work sheet entries.

E. Updating entries.

B. Closing entries.

Which discounts are offered based on quantities purchased?

A. Credit discounts

B. Trade discounts

C. Purchase discounts

D. Payment discounts

E. None of these

B. Trade discounts

Which discounts are provided to customers as an incentive for them to pay early?

A. Credit discounts

B. Trade discounts

C. Purchase discounts

D. Payment discounts

E. None of these

C. Purchase discounts

Identity the consequences of not making adjustment for accrued expense

A. Overstatement of liabilities

B. Understatement of liabilities

C. Overstatement of expenses

D. Understatement of capital

E. Overstatement of Assets

B. Understatement of liabilities

Invested $10,000 cash, and $15,000 of computer equipment. Prepare journal entries to record the above transactions

A. Debit Cash $ 25,000

Credit Capital $25,000

B. Debit Cash $ 10,000

Debit Equipment $ 15,000

Credit Capital $25,000

C. Credit Cash $ 10,000

Credit Equipment $ 15,000

Debit Capital $25,000

D. Credit Cash $ 25,000

Debit Capital $25,000

E. Debit Cash $ 10,000

Credit Capital $10,000

B. Debit Cash $ 10,000

Debit Equipment $ 15,000

Credit Capital $25,000

Which of the following assets is not depreciated?

A. Vehicle

B. Machine

C. Inventory

D. Buildings

E. All of these are depreciated

C. Inventory

Flash had cash inflows from operations $62,500, cash outflows from investing activities of $47,000, and cash inflows from financing of $25,000. The net change in cash was:

A. $40,500 increase.

B. $40,500 decrease.

C. $134,500 decrease.

D. $134,000 increase.

E. $9,500 increase.

A. $40,500 increase.

The operating activities of a business exclude:

A. Borrowing.

B. Purchasing inventories

C. Advertising

D. Distribution.

E. All of these.

A. Borrowing.

Justin Corporation uses a weighted-average perpetual inventory system. August 2, 10 units were purchased at $12 per unit.

August 18, 15 units were purchased at $14 per unit.

August 29, 12 units were sold.

What was the amount of the cost of goods sold for this sale?

A $148.00.

B. $150.50.

C. $158.40.

D. $210.00.

E. $330.00.

C. $158.40.

The buyer is responsible for the cost of shipping when goods are sold with the terms FOB

A. Shipping board

B. Shipping point

C. Destination

D. On board

E. None of these

B. Shipping point

At the beginning of January of the current year, Thomas Law Center's ledger reflected a normal balance of $52,000 for accounts receivable. During January, the company collected $14,800 from customers on account and provided additional services to customers on account totaling $12,500. Additionally, during January one customer paid Thomas $5,000 for services to be provided in the future. At the end of January, the balance in the accounts receivable account should be:

A. $54700

B. $49700

C. $47000

D. $64500

E. $42200

B. $49700

ACB Co. agreed to purchase $150,000 inventories from XZY Co. XZY shipped the goods FOB destination. On December 31, ACB Co. was aware that the goods had been shipped and would be received any day in January. Which statement is true?

A. ACB Co. should include the goods in its inventory calculated on December 31.

B. ACB Co. should include the goods in its inventory calculated on December 31, but should not record the obligation to pay for them.

C. ACB Co. should not include the goods in its inventory calculated on December 31, but should include the related payable on its balance sheet at December 31.

D. ACB Co. should not include the goods in its inventory calculated on December 31, nor the related payable on its balance sheet at December 31.

E. None of these

D. ACB Co. should not include the goods in its inventory calculated on December 31, nor the related payable on its balance sheet at December 31.

Which account is noncurrent or long-term asset

A. Equipment, supplies, vehicle

B. Equipment, building, vehicle

C. Equipment, prepaid expense, vehicle

D. Equipment, account receivable, vehicle

E. None of these

B. Equipment, building, vehicle

Moffat Company has assets of $600,000, liabilities of $250,000, and equity of $350,000. What is the entry needed to record when Moffat Company bills to a client for $25,000 of contract completed?

A. +$25,000 accounts receivable, -$25,000 accounts payable.

B. +$25,000 accounts receivable, +$25,000 accounts payable

C. +$25,000 accounts receivable, +$25,000 cash.

D. +$25,000 accounts receivable, +$25,000 revenue.

E. +$25,000 accounts receivable, -$25,000 revenue.

D. +$25,000 accounts receivable, +$25,000 revenue.

Somethings of value that cannot be physically touched, such as a brand, franchise, trademark, or patent is the definition of

A. Tangible assets

B. Intangible assets

C. Liquidity assets

D. Current assets

E. Non-current liabilities

B. Intangible assets

Which statement is true?

A. The cost of an inventory item includes its invoice cost plus any discount, and plus any added costs necessary to put it in a place and condition for sale. B. The cost of an inventory item includes its invoice cost plus any discount, and minus any added costs necessary to put it in a place and condition for sale.

C. The cost of an inventory item includes its invoice cost minus any discount, and minus any added costs necessary to put it in a place and condition for sale.

D. The cost of an inventory item includes its invoice cost minus any discount

E. The cost of an inventory item includes its invoice cost minus any discount, and plus any added costs necessary to put it in a place and condition for sale.

E. The cost of an inventory item includes its invoice cost minus any discount, and plus any added costs necessary to put it in a place and condition for sale.

How is Stock dividend different from cash dividend?

A. Stock dividend increases cash account balance of the corporation

B. Stock dividend reduces equity

C. Stock dividend reduces assets

D. Stock dividend does not reduce assets and equity

E. Stock dividend increased retained earnings

D. Stock dividend does not reduce assets and equity

An adjusting entry could be made for each of the following except:

A. Prepaid expenses.

B. Depreciation.

C. Unearned revenues.

D. Account payable.

E. Accrued revenues.

D. Account payable.

An example of an investing activity is

A. Paying wages of employees.

B. Withdrawals by the owner.

C. Purchase of land.

D. Selling inventory.

E. Contribution from owner.

C. Purchase of land.

Branz Company had credit sales during the current year which amounted to $700,000. Historically, 3% of credit sales are uncollectible. If Branz uses the allowance method of recording uncollectible accounts, a proper journal entry to record bad debt expense for the year would be:

A. Dr. Accounts Receivable 21,000 Cr. Allow. for Uncollectible Accounts 21,000

B. Dr. Uncollectible Accounts Expense 21,000 Cr. Accounts Receivable 21,000 C. Dr. Bad debts Expense 21,000 Cr. Allow. for Uncollectible Accounts 21,000

D. Dr. Allow. for Uncollectible Accounts 21,000 Cr. Accounts Receivable 21,000 E. None of these

C. Dr. Bad debts Expense 21,000 Cr. Allow. for Uncollectible Accounts 21,000

Which statement is true:

A. Depreciation Expense is shown on the income statement in order to achieve accounting's matching principle.

B. Depreciation Expense is shown on the balance sheet in order to achieve accounting's matching principle.

C. Depreciation Expense is shown on the income statement

D. Depreciation Expense is shown on the balance sheet

E. None of these

A. Depreciation Expense is shown on the income statement in order to achieve accounting's matching principle.

Accountant of the company wrote an entry in journal:

Dr Allowance for doubtful account 2000

Cr Account receivable This entry is written to: 2000

A. Write off an uncollectible account receivable

B. Record bad debt expense for the period

C. Close bad debt expense

D. Close allowance for doubtful account

A. Write off an uncollectible account receivable

The useful life of a fixed asset is:

A. The length of time it is productively used in a company's operations.

B. Never related to its physical life.

C. Its productive life, but not to exceed one year.

D. Don't need to be determined

E. Determined by law.

A. The length of time it is productively used in a company's operations.

A painting is offered for sale at $240,000 but is currently assessed at $215,000. The purchaser believes this painting worth $235,000 but ultimately purchases it for $225,000. According to historical cost principle, the purchaser records this painting at:

A. $240,000

B. $215,000

C. $235,000

D. $225,000

E. $230,000

D. $225,000

Selling products for cash $300 and $700 on credit. Show the general journal entry to record sale revenue of this transaction.

A. Debit Cash $ 300 Debit Account Receivable $700 Credit Revenue $1,000

B. Debit Cash $300 Debit Account Payable $700 Credit Revenue $1,000

C. Debit Account Receivable $700 Credit Unearned Revenue $700

D. Debit Unearned Revenue S700 Credit Account Receivable $700

E. Debit Cash $ 700 Credit Revenue $700

A. Debit Cash $ 300 Debit Account Receivable $700 Credit Revenue $1,000

Prepaid expenses are:

A. Payments made for products and services that do not ever expire.

B. Classified as liabilities on the balance sheet.

C. Decreases in equity.

D. Assets that represent prepayments of future expenses.

E. Promises of payments by customers.

D. Assets that represent prepayments of future expenses.

Newton Company uses the allowance method of accounting for uncollectible accounts. On May 3, the Newton Company wrote off the $3,000 uncollectible account of its customer, P. Best. The journal entry on May 3 is:

A. Dr allowance for doubtful debts 3000

Cr account receivable 3000

B. Dr bad debt expense 3000

Cr account receivable 3000

C. Dr bad debt expense 3000

Cr Allowance for doubtful debt 3000

D. Dr account receivable 3000

Cr bad debt expense 3000

E. Dr Accounts receivable 3000

Cr Cash 3000

A. Dr allowance for doubtful debts 3000

Cr account receivable 3000

The right side of a T-account is a(n):

A. Debit.

B. Increase.

C. Credit.

D. Decrease.

E. Account balance.

C. Credit.

Which type of information would be of most interested to creditors?

A. Dividend declared

B. Ability of the company to pay debts

C. Last year's profit

D. Current share price

E. None of these

B. Ability of the company to pay debts

What accounting principle requires credit sales revenue also included in the income statement?

A. Cash basis

B. Accrual basis

C. Accounting period assumption

D. Monetary unit assumption

E. Historical cost principle

B. Accrual basis

The summary amounts below appear in the Income Statement and Balance Sheet columns of a company's December 31 work sheet. Prepare the necessary closing entries into INCOME SUMMARY

Asset: $15,000 Liability: $14,000 Expense: $8,000 Withdrawal: $1,000

A. Credit Income summary: $8,000

Debit Expense: $8,000

B. Credit Expense: $8,000

Debit Income summary: $8,000

C. Credit withdrawal: $1,000

Debit Income summary: $1,000

D. Credit Asset: $15,000

Debit Income summary: $15,000

E. Credit Withdrawal: $1,000

Debit owner capital: $1,000

B. Credit Expense: $8,000

Debit Income summary: $8,000

Which statement is true:

A. Merchandise available for sale includes Beginning inventory and ending inventory.

B. Merchandise available for sale includes Beginning inventory and cost of goods sold.

C. Merchandise available for sale includes Beginning inventory and Net cost of purchases.

D. Merchandise available for sale includes ending inventory and Net cost of purchases.

E. None of these

C. Merchandise available for sale includes Beginning inventory and Net cost of purchases.

Which accounts need to do closing entries?

A. Close Revenue accounts to Income Summary

B. Close Expense accounts to Income Summary

C. Close Income Summary account to Owner's Capital.

D. Close Withdrawals account to Owner's Capital

E. All of these

E. All of these

Acme-Jones Company uses a weighted-average perpetual inventory system. August 2, 8 units were purchased at $12 per unit.

August 18, 15 units were purchased at $14 per unit.

August 29, 20 units were sold.

August 31, 10 units were purchased at $16 per unit.

What is the per-unit value of ending inventory on August 31?

A. $12.00.

B. $13.30.

C. $15.38.

D. $16.00.

E. $17.74.

C. $15.38.

Distributions by a business to its owners are called:

A. Withdrawals.

B. Expenses.

C. Assets.

D. Retained earnings.

E. Net Income.

A. Withdrawals.

Which statement is true?

A. Ending inventory is equal to merchandise available for sale minus beginning inventory.

B. Ending inventory is equal to merchandise available for sale minus cost of goods sold

C. Ending inventory is equal to merchandise available for sale minus net cost of purchases.

D. Beginning inventory is equal to merchandise available for sale minus cost of goods sold.

E. None of these.

B. Ending inventory is equal to merchandise available for sale minus cost of goods sold

A company's Office Supplies account shows a beginning balance of $600 and an ending balance of $400. If office supplies expense for the year is $3,100, what amount office supplies was purchase during

A. $2,700.

B. $2,900.

C. $3,300.

D. $3,500.

E. $3,700.

B. $2,900.

The balance in the prepaid insurance account before adjustment at the end of the year is $4,800, which represents the insurance premiums for four months. The premiums were paid on November 1. The adjusting entry required on December 31 is:

A. Debit Insurance Expense, $2,400; credit Prepaid Insurance, $2,400.

B. Debit Prepaid Insurance, $2,400, credit Insurance Expense, $2,400.

C. Debit Insurance Expense, $1,200, credit Prepaid Insurance, $1,200

D. Debit Prepaid Insurance, $1,200, credit Insurance Expense, $1,200

E. Debit Cash, $4,800; Credit Prepaid Insurance, $4,800.

A. Debit Insurance Expense, $2,400; credit Prepaid Insurance, $2,400.

On June 30, 2009, Apricot Co. paid $7,500 cash for a service that will be performed during two-year period. On June 30, 2009 Apricot should record

A. A credit to an expense for $7,500 and debit cash $ 7,500

B. A debit to a prepaid expense for $7,500 and credit cash $ 7,500

C. A debit to a prepaid expense for $7,500 and credit account payable $ 7,500

D. A credit to a prepaid expense for $7,500 and debit cash $ 7,500

E. A debit to expense for $7,500 and credit cash $ 7,500

B. A debit to a prepaid expense for $7,500 and credit cash $ 7,500

Electron borrowed $15,000 cash from TechCom by signing a promissory note. TechCom's entry to record the transaction should include a:

A. Debit to Notes Receivable for $15,000.

B. Debit to Accounts Receivable for $15,000

C. Credit to Notes Receivable for $15,000.

D. Debit Notes Payable for $15,000.

E. Debit to Cash for $15,000.

A. Debit to Notes Receivable for $15,000.

After preparing and posting the closing entries to close revenues (and gains) and expenses (and losses) into the income summary, the income summary account has a debit balance of $33,000. The entry to close the income summary account will include:

A. A debit of $33,000 to owner withdrawals.

B. A credit of $33,000 to owner withdrawals.

C. A debit of $33,000 to income summary.

D. A debit of $33,000 to retained earnings.

E. A credit of $33,000 to retained earnings.

D. A debit of $33,000 to retained earnings.

A company purchased new computers at a cost of $14,000 on October 1,2010. The computers are estimated to have a useful life of 4 years and a salvage value of $2,000. The company uses the straight-line method of depreciation. How much depreciation expense will be recorded for the computers for the year ended December 31, 2010?

A. $250

B. $750

C. $875

D. $1,000

E. $3,000

B. $750

Which statement is true:

A. Generally when an expense or withdraw is involved in a transaction, it will be debit

B. Generally when an expense or withdraw is involved in a transaction, it will be credit

C. Generally when an make loan or withdraw is involved in a transaction, it will be debit

D. Generally when make loan or withdraw is involved in a transaction, it will be credit| E. None of these

A. Generally when an expense or withdraw is involved in a transaction, it will be debit

An example of an operating activity is:

A. Paying wages.

B. Purchasing office equipment.

C. Borrowing money from a bank.

D. Selling stock.

E. Paying off a loan.

A. Paying wages.

Which statement is true about tangible asset?

A. Tangible assets are assets held for sale

B. Tangible assets are assets held for operating activity of the company

C. Tangible assets are assets acquired by loan

D. Tangible assets are assets never reduce value

E. Tangible assets are assets increase value over the time

B. Tangible assets are assets held for operating activity of the company

Provide descriptions for this transaction: Decrease cash $3500 and Decrease equity $3500

A. Withdraw cash from the business by owner or paid cash for an expense

B. Withdraw cash from the business by owner

C. paid cash for an expense

D. Collected cash from customers

E. None of these

A. Withdraw cash from the business by owner or paid cash for an expense

Taylor Company uses the direct write-off method of recording uncollectible accounts receivable. Recently, a customer informed Tayler that he would be unable to pay $300 owned to Taylor. Taylor's proper journal entry to reflect this event would be:

A. Dr. Uncollectible Accounts Expense 300 Cr. Allowance. for Uncollectible Accounts 300

B. Dr. Allowance. for Uncollectible Accounts 300 Cr. Accounts Receivable 300 C. Dr. Uncollectible Accounts Expense 300 Cr. Accounts Receivable 300

D. Dr. revenue 300 Cr. Accounts Receivable 300

E. None of these

C. Dr. Uncollectible Accounts Expense 300 Cr. Accounts Receivable 300

Which statement is true about Mary's capital:

A. The owner's equity account that contains the amount invested in the sole proprietorship by Mary Smith plus the net income since the company began minus the draws made by Mary Smith since the company began.

B. The owner's equity account that contains the amount invested in the sole proprietorship by Mary Smith minus the net income since the company began minus the draws made by Mary Smith since the company began.

C. The owner's equity account that contains the amount invested in the sole proprietorship by Mary Smith plus the net income since the company began plus the draws made by Mary Smith since the company began.

D. The owner's equity account that contains the amount invested in the sole proprietorship by Mary Smith plus the net income since the company began E. None of these

A. The owner's equity account that contains the amount invested in the sole proprietorship by Mary Smith plus the net income since the company began minus the draws made by Mary Smith since the company began.

When a sale is made with the credit terms of 2/10, net 30, the ''2" refers to the:

A. Interest rate

B. Selling day

C. Payment Due date

D. Discount rate

E. None of these

D. Discount rate

A company has a $100,000; 9%; 120 day note payable issued on 6 December. How much of interest payable will be reported in the balance sheet as at 31 December?

A. 0 because interest is not yet paid

B. 625

C. 360

D. 450

E. 500

B. 625

A company has sales of $350,000, Account Receivable of $50,000 and estimates that 0.7% of its sales are uncollectible. The estimated amount of bad debts expense is:

A. $350

B. $2,450.

C. $3,450.

D. $300

E. $530

B. $2,450.

Income statement and Balance sheet

A. Report effects of cash-relating transactions

B. Do not explain the changes in cash during the period

C. Record sources and uses of cash during the period

D. Are classified into operating activities, investing activities and financing activities.

E. None of these

B. Do not explain the changes in cash during the period

The adjusting entry to record the earned but unpaid salaries of employees at the end of an accounting period is:

A. Debit Unpaid Salaries and credit Salaries Payable.

B. Debit Salaries Payable and credit Salaries Expense.

C. Debit Salaries Expense and credit Cash.

D. Debit Salaries Expense and credit Salaries Payable.

E. Debit Cash and credit Salaries Expense.

D. Debit Salaries Expense and credit Salaries Payable.

Costs included in the Merchandise Inventory account can include:

A. Invoice price minus any discount, Transportation-in, Storage, Insurance

B. Invoice price plus any discount, Transportation-in, Storage, Insurance

C. Invoice price minus any discount, Transportation-out, Storage, Insurance

D. Invoice price minus any discount, Transportation-in, cost of goods sold

E. All of these

A. Invoice price minus any discount, Transportation-in, Storage, Insurance

Which statement is true?

A. Income summary and withdrawals accounts are permanent accounts and should be closed at the end of the accounting period

B. Income summary and withdrawals accounts are temporary accounts and should be closed at the end of the accounting period.

C. Income summary and withdrawals accounts are temporary accounts and don't need to be closed at the end of the accounting period

D. Income summary and Liability accounts are temporary accounts and should be closed at the end of the accounting period.

E. Income summary and asset accounts are temporary accounts and should be closed at the end of the accounting period.

B. Income summary and withdrawals accounts are temporary accounts and should be closed at the end of the accounting period.

Provide descriptions for this transaction: Debit insurance expense $8000 and credit Insurance - prepaid expense $8000

A. Paid insurance fee by cash $8,000

B. Adjusting prepaid expense at the end of period $8,000

C. Arrange insurance contract on credit $8,000

D. Arrange inventory contract by cash $8,000

E. None of these

B. Adjusting prepaid expense at the end of period $8,000

A method of valuing the cost of goods sold that uses the cost of the oldest items in inventory first. What is it?

A. FIFO

B. LIFO

C. Weighted Average

D. Specific method

E. None of these

A. FIFO

Which is true about account receivable:

A. Money which is owed to a company by a customer for products and services provided on credit.

B. Money which is owed to a company by a customer for products and services provided.

C. Money which is borrowed by a company for products and services bought on credit.

D. Money which is borrowed by a company for products and services bought.

E. None of these

A. Money which is owed to a company by a customer for products and services provided on credit.

Which accounts belong to Permanent Accounts?

A. Revenue, asset, liability

B. Revenue, expense, income summary

C. Asset, liability, owner capital

D. Revenue, expense, withdrawal

E. Asset, liability, revenue

C. Asset, liability, owner capital

An example of a financing activity is:

A. Buying office supplies.

B. Obtaining a long-term loan.

C. Buying office equipment.

D. Selling inventory.

E. Buying land.

B. Obtaining a long-term loan.

A record of financial transactions in order by date and often defined as the book of original entry. This statement is about:

A. None of these

B. A Ledger

C. A Source document

D. A General journal

E. An Income statement

D. A General journal

The following transactions occurred during July:

1. Received $900 cash for services provided to a customer during July.

2. Received $2,200 cash investment from Barbara Hanson, the owner of the business.

3. Received $750 from a customer in partial payment of his account receivable which arose from sales in June.

4. Provide services to a customer on credit, $375

5. Borrowed $6,000 from the bank by signing a promissory note.

6. Received $1,250 cash from a customer for services to be rendered next year.

What was the amount of revenue for July?

A. $ 900.

B. $ 1,275

C. $ 2,525.

D. $ 3,275.

E. $11,100.

B. $ 1,275

John, the owner of Matt company, withdrew $8,000 from the business during the current year. The entry to close the withdrawals account at the end of the year, is

A. Debit capital $8,000 and credit withdrawal $ 8,000

B. Debit capital $8,000 and credit cash $ 8,000

C. Debit capital $8,000 and credit expense $ 8,000

D. Debit expense $8,000 and credit income $ 8,000

E. Credit capital $8,000 and debit withdrawal $ 8,000

A. Debit capital $8,000 and credit withdrawal $ 8,000

Which kind of account is accumulated depreciation?

A. Asset account

B. Liability account

C. Equity account|

D. Temporary account

E. Contra - asset account

E. Contra - asset account

Of the following account types, which would be increased by a debit?

A. Liabilities and expenses.

B. Assets and equity.

C. Assets and expenses.

D. Equity and revenues.

E. None of these

C. Assets and expenses.

The Company obtained a machine for $10,000 on January 1, 2019. It estimates the salvage value of $2,000 and useful life of 8 years. What is the accumulated depreciation as at 31 December 2020 using double balance declining method?

A. $1,000

B. $2343.75

C. $2,500

D. $2,000

E. $4,375

E. $4,375

Calculated as sales minus all costs directly related to those sales. It is about: A. Cost of goods sold

B. Expense

C. Revenue

D. Gross profit

E. Profit

D. Gross profit

The seller is responsible for the costs of shipping its goods to the buyer when the terms of the sale are FOB:

A. Shipping board

B. Shipping point

C. Destination

D. On board

E. None of these

C. Destination

A payment to an owner for personal use is called a(n):

A. Liability.

B. Withdrawal.

C. Expense.

D. Contribution.

E. Investment.

B. Withdrawal.

A company has $20,000 in outstanding accounts receivable and it uses the allowance method toaccount for uncollectible accounts. Experience suggests that 6% of outstanding receivables are uncollectible.The current Credit balance (before adjustments) in the allowance for doubtful accounts is $800. The journal entry to record the adjustment to the allowance account includes a debit to Bad Debts Expense for:

A. $1200

B. $500

C. $400

D. $1000

E. None of these

C. $400

Accounts receivable that may become uncollectable and will be written off, is known as:

A. Expense

B. Account receivable

C. Bad debts

D. Debts

E. Bad debt expense

C. Bad debts

How will it affect Income Statement if an accrued expense of $450 is forgotten to record at the end of the period?

A. Net Income in the Income Statement will be overstated for $450

B. Net Income in the Income Statement will not be affected

C. Income Statement will not be affected but Balance sheet will be understated

D. Net income in the Income Statement will be understated for $450

E. Net income in the Income Statement will be overstated $900

A. Net Income in the Income Statement will be overstated for $450

Statement of retained earnings does not include:

A. Dividends paid

B. Transfer to general reserves

C. Prior period adjustments

D. Net income

E. Revaluation of long-term investments

E. Revaluation of long-term investments

A chart of accounts generally starts with which of the following types of accounts?

A. Asset accounts

B. Liability accounts

C. Expense accounts

D. Equity accounts

E. Revenue accounts

A. Asset accounts

Which of the following statements is correct?

A. The left side of a T-account is the credit side.

B. Debits decrease asset and expense accounts, and increase liability, equity, and revenue accounts.

C. The left side of a T-account is the debit side.

D. Credits increase asset and expense accounts, and decrease liability, equity, and revenue accounts.

E. In certain circumstances the total amount debited need not equal the total amount credited for a particular

transaction

C. The left side of a T-account is the debit side.

On April 30, Holden Company had an Accounts Receivable balance of $18,000. During the month of May, total credits to Accounts Receivable were $52,000 from customer payments. The May 31 Accounts Receivable balance was $13,000. What was the amount of credit sales during May?

A. $ 5,000.

B. $47,000.

C. $52,000.

D. $57,000.

E. $32,000.

B. $47,000.

The Income Summary account is used:

A. To adjust and update asset and liability accounts.

B. To close the revenue and expense accounts.

C. To determine the appropriate withdrawal amount.

D. To replace the income statement under certain circumstances.

E. To replace the capital account in some businesses.

B. To close the revenue and expense accounts.

Adjusting entries at the end of an accounting period would not be required for which of the following?

A. Multi-period costs that must be split among 2 or more accounting periods

B. Multi-period revenues that must be split among 2 or more accounting periods

C. Expenses that have been incurred in a given period but not as yet recorded in the accounts

D. Revenue that has been earned and recorded in the accounting records.

E. None of these

D. Revenue that has been earned and recorded in the accounting records.

The rule that requires financial statements to reflect the assumption that the business will continue operating instead of being closed or sold, unless evidence shows that it will not continue, is the:

A. Going-concern principle.

B. Business entity principle.

C. Objectivity principle.

D. Cost Principle.

E. Monetary unit principle

A. Going-concern principle.

What is the cost principle?

A. The principle that an audit will always cost more than it is worth

B. The principle that assets are reflected on a company's balance sheet at the greater of their cost or their fair value

C. The principle that liabilities are always reflected at the current cost of liquidating them.

D. The principle that assets are recorded at their historical cost.

E. The principle that assets are reflected on a company's balance sheet at the lower of their cost or their fair value

D. The principle that assets are recorded at their historical cost.

The special account used only in the closing process to temporarily hold the amounts of revenues and expenses before the net difference is added to (or subtracted from) the owner's capital account is the:

A. Income Summary account.

B. Closing account.

C. Balance column account.

D. Profit accounts.

E. Loss accounts.

A. Income Summary account.

The inventory system continually updates accounting records for merchandising transactions.

A. FIFO inventory system

B. LIFO inventory system

C. Weighted inventory system

D. Perpetual inventory system

E. Periodic inventory system

D. Perpetual inventory system

How are interests earned from depositing in bank adjusted in Bank reconciliation statement?

A. Deducted from Bank statement balance

B. Added to Bank statement balance

C. Deducted from accounting book balance

D. Added to accounting book balance

E. None of these

D. Added to accounting book balance