Accounting Flashcards
An entry mode on the debit side of an expense account indicates that the account has been:
balanced
decresed
footed
increased
increased
A ledger is a book of what?
accounting statements
accounts
original entry
trial balances
accounts
Basic accounting theory is based upon:
a double book
double entry
single entry
triple entry
double entry
An entry on the debit side of a liability account indicates the account has been:
balanced
decreased
footed
increaesd
debit office supplies and credit accounts payable
Purchase of office supplies on credit is recorded by:
credit office supplies and debit accounts payable
debit office supplies and credit accounts payable
debit office supplies and credit purchases
debit purchases and credit accounts payable
debit office supplies and credit accounts payable
An accounting year ending on some date other than December 31st is called:
calendar year
current year
fiscal year
physical year
fiscal year
The things owned by a business are called:
assets
capital
liabilities
revenue
assets
An entry made on the debit side of an asset account indicates that the account has been:
balanced
decreased
increased
footed
increased
How is the payment of rent by cash recorded?
debit accounts payable and credit cash
debit cash and credit capital
debit cash and credit rent expense
debit rent expense and credit cash
debit rent expense and credit cash
The beginning balance in the supplies account is $600. During the month an additional $800 worth of supplies were purchased. At the end of the month, an inventory of the supplies found only $300 remained on hand. What would be the amount of the adjusting entry for the supplies account?
$300
$1100
$1400
$1700
$1100
When a funeral director buys a funeral coach on credit, he/she would:
credit casket coach and debit accounts payable
debit cash and credit casket coach
debit casket coach and credit accounts accounts payable
debit casket coach and credit cash
debit casket coach and credit accounts accounts payable
The group of accounts which you credit to increase are:
assets and expenses
liabilties and assets
liabilities and capital
liabilities and expenses
liabilities and capital
An entry made on the debit side of the proprietorship account indicates that the account has been:
balanced
decreased
footed
increased
decreased
The group of accounts which you debit when increased are:
assets and capital
assets and expenses
assets and income
assets and liabilities
assets and expenses
A group of accounts constitues a/an:
journal
ledger
posting
special journal
ledger
The accounts payable account would be shown on the :
Accounts Receivable Ledger
Balance Sheet
Income Statement
Profit and Loss Statement
Balance Sheet
Advertising expense would be reflected on the:
Balance Sheet
Income Statement
Statement of Financial Condition
Statement of Owner’s Equity
Income Statement
The totaling of a column in a journal or ledger account is called:
closing
footing
journalizing
posting
footing
The right side of a standard account is called the:
credit side
debit side
loss side
profit side
credit side
The amount of revenue from the sale of funeral services would be shown on the:
Balance Sheet
Profit and Loss Statement
Statement of Assets and Liabilities
Statement of Financial Condition
Profit and Loss Statement
Another term for Profit and Loss Statement is:
Balance Sheet
Income Statement
Statement of Financial Condition
Trial Balance
Income Statement
Accounts receivable is a/an:
Asset account
Capital account
Liability account
Revenue account
Asset account
A person to whom a debt is owed is called a:
credit
creditor
debt
debtor
creditor
A plant asset was purchased by the funeral home costing $8,000. It has a useful life of 3 years and a salvage value of $2,000. Using the straight-line method of depreciation, what would be the yearly amount of depreciation?
$166.67
$1,000
$2,000
$2,667
$2,000
Which of the following does not appear on the balance sheet?
Assets
Expenses
Liabilties
Proprietorship
Expenses
Liabilties are all things a funeral home business:
owes
owns
sells
spends
owes
A Profit and Loss Statement can be prepared:
at any time
only once a month
only every three months
only every six months
at any time
An entry on the credit side of a revenue account indicates the account has been:
balanced
decreased
footed
increased
increased
When cash is spent in the acquisition of an asset the net worth of a business is:
decreased
footed
increased
not affected
not affected
The process of recording information in the ledger is called:
balancing
footing
journalizing
posting
posting
If the total of the operating expense section of the income statement is smaller than the total of the income section, the difference is called:
gross profit
net loss
net profit
net worth
net profit
Double entry bookkeeping means an entry is made:
as a debit and credit
as an asset and a liability
in a double book
in a journal and ledger
as a debit and credit
The proprietorship of a business may be increased by:
borrowing from banks and purchase of assets on credit
collection of accounts receivable and borrowing from banks
net income and borrowing from banks
net income and investment of assets in the business by the owner
net income and investment of assets in the business by the owner
Expense means a/an
decrease in owners equity
increase in an asset
increase in owners equity
increase in sales
decrease in owners equity
Which of the following accounts would be used to assist the accountant in an adjusting entry involving depreciation?
Accumulated depreciation
Allowance for doubtful accounts
Automobile
Automobile expense
Accumulated depreciation
The proprietorship of a business may be decreased by
collection of accounts receivable and borrowing from banks
expenses and withdrawals of assets from the business by the owner
net income and borrowing from banks
net income and investment of assets in the business by the owner
expenses and withdrawals of assets from the business by the owner
The difference between the two sides of an account is called the
account balance
account number
account schedule
net profit
account balance
To establish a petty cash fund, one would
debit accounts payable and credit cash
debit cash and credit petty cash
debit cash and credit accounts payable
debit petty cash and credit cash
debit petty cash and credit cash
The title of an account which would normally have a credit balance is
accounts payable
accounts receivable
advertising expense
cash
accounts payable
The abbreviation for “debit” is
Db.
Dbt.
Dr.
Dt.
Dr.
An increase in proprietorship as the result of a business transaction is a/an
asset
income
liability
net worth
income
The abbreviation for “credit” is
Cd.
Cr.
Cred.
Ct.
Cr.
A list of accounts that shows the arrangement of the accounts in the ledger is called
Accounts Receivable Ledger
Balance Sheet
Chart of Accounts
Trial Balance
Chart of Accounts
A person who signs a check or draft ordering payment to be made is called the
drawee
drawer
maker
payee
drawer
Which of the following does not qualify as a current asset?
Accounts receivable
Cash
Land
Office supplies
Land
A person or concern, usually a bank, that has been ordered to make payment on a check or draft is called the
drawee
drawer
maker
payee
drawee
A person or company who will receive payment on a promisory note, check, draft or money order is called the
drawee
drawer
maker
payee
payee
A synonym for fair wear and tear of a durable asset is
antiquated
depreciation
obsolescence
redundant
depreciation
F.I.C.A. refers to
city tax
federal income tax
social security tax
state income tax
social security tax
A language of business employed to communicate financial information based upon the recording, classification, summarization, and interpretation of financial data is called
accounting
budgeting
financial management
merchnadising
accounting
Property of a relatively permanent nature used in the operation of a business and not intended for resale is called
current asset
current liability
fixed asset
fixed liability
fixed asset
Assets = Liabilities + Owner’s Equity is the
accounting equation
expanded accounting equation
formula for determining net worth
formula for GAAP
accounting equation
Debts that are not due and payable within a year are called
current assets
current liabilities
fixed assets
fixed liabilities
fixed liabilities
The increase in net worth due to the excess of income over costs and expenses is called
loss
overhead
principal
profit
profit
The difference between cost of goods sold and their selling price is called
cost of goods available for sale
ending inventory
gross profit
net profit
gross profit
Money paid for the use of money is called
bad debts
interest
petty cash
principal
interest
The excess of current assets over current liabilities is called
net worth
overhead
total capital
working capital
working capital
The difference between net sales and cost of goods sold is
gross margin
interest
principal
sales tax
gross margin
A written promise of a customer to pay the business a sum of money at a future date is called a/an
accounts payable
accounts receivable
note payable
note receivable
note receivable
What are goods purchased for resale at a profit?
capital
fixed assets
merchandise
supplies
merchandise
A disbursement is a
budget
footing
payment
receipt
payment
The person who orders the bank to make payment of a financial instrument is properly termed a/an
drawee
drawer
endorser
payee
drawer
What would be the closing entry to close the revenue account?
Debit capital, credit revenue
Debit expense and revenue summary, credit revenue
Debit revenue , credit expense and revenue summary
Debit revenue, credit expenses
Debit revenue , credit expense and revenue summary
The sole owner of a business is a
drawer
maker
partner
proprietor
proprietor
Income received but not yet earned is
a bad debt
deferred income
interest
net profit
deferred income
A fund of currency and coin established for the payment of small amounts of money is
accounts payable
drawing account
fixed assets
petty cash
petty cash
A paper showing quantity, description, prices of items, total amount of purchase, and terms of payment is a/an
deposit slip
invoice
journal
ledger
invoice
The difference between total sales and sales returns and allowances is
net loss
net profit
net sales
net worth
net sales
One who has made a sale is called a/an
consignor
maker
payee
vendor
vendor
The amount added to the cost of an article to determine the selling price of that article is the
interest
mark up
net profit
other income
mark up
An estimate of revenue and probable expense for a given period of time is a
balance sheet
bank statement
bill
budget
budget
A total written in small pencil figures, under the last entry in a column is the
assets
balance
footing
journalizing
footing
The person or business concern to whom a shipment is made is a
consignee
drawee
payee
vendee
consignee
A double line under the last entry on a T-account means
do not post this entry
the entry is complete
the entry is correct
there is more to do to the entry
the entry is complete
A distribution of profits of a corporation to its stockholders as declared by the board of directors
is
dividend
gross earnings
interest
investment
dividend
Increases in the owner’s equity resulting from business operations is known as
income
interest
overhead
principal
income
That portion of a plant asset’s original cost that cannot be depreciated is called
cost
mark-up
scrap value
take home pay
scrap value
The basic accounting theory is based upon
double entry
single entry
triple entry
both A & B
double entry
A decrease in net worth due to excess of costs and expenses over income is
loss
proprietorship
retained earnings
take home pay
loss
The acronym REID is used when
closing temporary accounts
correcting journal entries
making adjustments to the ledger
posting journal entries to the ledger
closing temporary accounts
The merchandise that business keeps on hand for sale is the
fixed assets
inventory
overhead
supplies
inventory
The period of time required to purchase goods and services and turn them back into cash is called
a calendar year
a fiscal year
the accounting cycle
the normal operating cycle
the normal operating cycle
Which of the following represents the difference between the total assets and the total liabilities?
- Capital
- Net income
- Net worth
- Owner’s equity
1 only
1 and 2 only
1, 2 and 4 only
1, 3, and 4 only
1, 3, and 4 only
A ledger is a book of
accounts
accounting statements
original entry
trial balance
accounts
An entry on the debit side of the owners equity indicates that the account has been
decreased
increased
both
neither
decreased
An entry on the credit side of an expense account indicates the account has been
adjusted
balanced
closed
increased
closed
The holder or person owning stock in a corporation is the
accountant
director
maker
stockholder
stockholder
The book of original entry is in
alpha-numeric order
chronological order
highest to lowest order
numeric order
chronological order
The debts one owes are
assets
expenses
income
liabilities
liabilities
At the end of the month a funeral home’s assets totaled $50,000; the liabilities totaled $20,000; revenue for the month totaled $6,000; and the total expenses amounted to $4,000. Which of the following statements is true?
- net income = $2,000
- net loss =
- owner’s equity = $30,000
- owner’s equity = $70,000
1 and 3
1 and 4
2 and 3
2 and 4
1 and 3
The things one owns are
assets
capital accounts
liabilities
revenues
assets
Accounts payable is a/an
asset account
expense account
liability account
owner’s equity account
liability account
Sales minus cost of goods sold equals
gross profit
net profit
overhead
operation expenses
gross profit
The amount of depreciation taken during the current fiscal year is properly termed
accumulated depreciation
cumulative depreciation
current depreciation
depreciation expense
depreciation expense
Goodwill is classified as a/an
intangible asset
liability account
revenue account
tangible asset
intangible asset
The decrease in the value of a fixed asset is called
a discount
an obsolescence
credit
depreciation
depreciation
What is another name for the Profit and Loss Statement?
Balance Sheet
Income Statement
Statement of Financial Condition
Work Sheet
Income Statement
What is the process of recording information in the ledger?
balancing
editing
journalizing
posting
posting
The amount of income from the sale of funeral services would be shown on which formal financial statement?
Balance Sheet
Profit and Loss Statement
Trial Balance
Work Sheet
Profit and Loss Statement
What is the primary purpose of a business?
prestige
profit
sales
service
profit
The left side of a standard account is called the
credit side
debit side
profit side
sales side
debit side
The only time the debit side of the revenue account is used is when you make
adjusting entries
closing entries
journalizing entries
posting entries
closing entries
Income earned but not received is called
accrued income
deferred income
fiscal income
future income
accrued income
When cash is spent in the acquisition of an asset the impact on the accounting equation is
the asset cash is credited
the asset cash is debited
the new asset is credited
the owner’s equity is credited
the asset cash is credited
The totaling of a column of a journal or ledger is called
footing
journalizing
posting
summarizing
footing
An entry on the credit side of a liability account indicates that the account has been
audited
balanced
decreased
increased
increased
What is the cost of operating a business called?
accounts payable
fixed liabilities
overhead
revenue loss
overhead
Checks returned to the depositor that have been paid by the bank are
canceled checks
deposit checks
order checks
outstanding checks
canceled checks
Working capital is a measure of
investing activities
leverage
liquidity
profitability
liquidity
A check that has been issued but not presented for payment to a bank is called a
canceled check
deposited check
order check
outstanding check
outstanding check
The debit side of the T-account is the
left side
minus side
plus side
right side
left side
A book in which the daily transactions of a business are first written is the
index
ledger
journal
schedule
journal
Accounts receivable which are uncollectable are
accrued income
bad debts
fixed assets
incurred income
bad debts
The credit side of the T-account is the
left side
minus side
plus side
right side
right side
A ledger must contain
all accounts
assets
cash disbursed
liabilities
all accounts
A decrease in owner’s equity resulting from a business transaction is a/an
expense
income
liability
net worth
expense
A loan from a bank secured by property is
a mortgage payable
a note receivable
an account payable
an asset
a mortgage payable
An increase to which account will increase owner’s equity?
Account Payable
Client Fees
Drawing
Rent Expense
Client Fees
Salary expense is considered to be
a cost of goods sold
an operating expense
capitalization
fixed expense
an operating expense
A term which is used synonymously with operating expense is
cost of goods sold
gross profit
net sales
overhead
overhead
Posting is a/an
form of advertising
recording of figures
transfer of figures from the journal to the ledger
transportation of figures
transfer of figures from the journal to the ledger
When delivery revenue is earned on account, which accounts increase and decrease?
Accounts Receivable decreases; Revenues decreases
Accounts Receivable increases; Revenues decreases
Accounts Receivable increases; Revenues increases
Cash increases; Revenues increases
Accounts Receivable increases; Revenues increases
Accounts receivable are examples of
assets
income
liabilities
proprietorship
assets
An employee is paid a salary of $1,850 per month. He/she is also paid time and a half for all hours worked in excess of forty hours per week. If she/he worked 62 hours last week, what would be the employee’s gross earnings for the week?
$569.41
$629.14
$779.14
$869.41
$779.14
A special fund for use in disbursing small sums of money is called a/an
impress fund
loan fund
petty cash fund
working fund
petty cash fund
A journal designed for recording a particular type of transaction is known as a/an
combination journal
general journal
general ledger
special journal
special journal
Mr. Quigley is paid an hourly rate of $5.00 per hour. He is also paid time and a half for any hours worked in excess of 40 hours per week. For the current pay period, he worked a total of 60 hours. If his FICA tax is 6%, and his withholding is 10%, what is his take home pay for the week?
$294.00
$315.85
$329.00
$350.00
$294.00
If a funeral home sells a funeral service on a 30 day account, the entry to record the transaction would be to
debit accounts payable, credit purchases
debit accounts receivable, credit sales
debit notes receivable, credit sales
debit sales, credit accounts receivable
debit accounts receivable, credit sales
Liability accounts are indentified by the account title followed by the word
drawing
expense
payable
revenue
payable
If a funeral director receives payment from a client who had purchased a service on a 30 day account, he/she would make which of the following entries in the journal
debit accounts receivable, credit cash
debit cash, credit accounts receivable
debit cash, credit sales
debit purchases, credit cash
debit cash, credit accounts receivable
Expenses are listed on which of the following reports?
- Balance Sheet
- Income Statement
- Profit and Loss Statement
- Statement of Financial Condition
1 and 2
1 and 3
2 and 3
2 and 4
2 and 3
If a funeral home purchases caskets from a casket company on a 30 day account, the funeral home accountant would record the transaction as follows
debit purchases, credit accounts payable
debit purchases, credit account receivable
debit purchases, credit cash
debit sales, credit purchases
debit purchases, credit accounts payable
The report that shows the financial condition of the business at a point in time is called the
- Balance Sheet
- Income Statement
- Profit and Loss Statement
- Statement of Financial Condition
1 and 2
1 and 4
2 and 3
3 and 4
1 and 4
A funeral car is purchased by a funeral home for $30,000. The vehicle will be used for five years and then replaced. If the estimated slavage value will be $5,000, what will be the amount of yearly depreciation using the straightline method of depreciation for computation?
$2,000
$3,500
$5,000
$6,500
$5,000
Methods of depreciation that allow the business to recover the cost early in the life of the asset include
- accumulated depreciation
- double declining balance
- straight line depreciation
- sum of the years digits
1 and 3
1 and 4
2 and 3
2 and 4
2 and 4
The accounting equation may be stated as
- liabilities = assets + owner’s equity
- assets + liabilties = owner’s equity
- assets = liabilties + owner’s quity
- assets - liabilities = owner’s equity
1 and 2
1 and 3
2 and 4
3 and 4
3 and 4
The account that provides a current or future benefit to the business is properly termed
a drawing account
a liability account
an asset account
an expense account
an asset account
When you recognize revenue when it is earned, and expenses when they are incurred you are operating under the
accrual basis of accounting
cash basis of accounting
fiscal basis of accounting
modified cash basis of accounting
accrual basis of accounting
Which of the following would be a Statement of Financial Condition?
Asset List
Balance Sheet
Liability Listing
Owner’s Equity Sheet
Balance Sheet
What is current assets divided by current liabilities?
Current Ratio
Depreciation
Valuation
Working Capital
Current Ratio
What is a summary of the results of operations for a specified period of time?
Balance Sheet
Ledger
Journal
Profit and Loss Statement
Profit and Loss Statement
What is the excess of current assets over current liabilities?
Debt
Net Capital
Notes Payable
Owner’s Equity
Net Capital
Who is the person or business concern by whom shipment is made?
Consignor
Creditor
Drawer
Drawee
Consignor
What is the difference between assets and liabilities?
Accounts Payable
Accounts Receivable
Fixed Income
Owner’s Equtiy
Owner’s Equtiy
With which type of business would you have stockholders?
A Corporation
A Partnership
A Proprietorship
Answer Text
A Corporation
What is a written promise that pledges real property as security for the payment of a debt?
Account Payble
Interest
Investment
Mortgage Payable
Mortgage Payable
What is a document issued by a state which permits a corporation to operate?
A Charter
A Consignor Agreement
A Permit of Operations
A Propietorship
A Charter
What are assets which will not be sold during the fiscal period?
Captial
Current Assets
Fixed Assets
Fixed Liabilities
Fixed Assets
What is the money or other assets supplied by the owner for the operation of a business?
Interest
Investment
Mortgage
Negotiable Instrument
Investment
Which of the following is levied on the earnings of individuals and businesses by federal, state and local government?
Accrued Liability Tax
Depreciation
Income Tax
Sales tax
Income Tax
