Accounting & Small Business Flashcards
1
Q
A temporary owner’s equity account used to record the earning of revenue.
A
sales
2
Q
The process of ledger recording of information is called
A
posting
3
Q
The profit and loss statement may be called
A
income and expense statement
4
Q
The proprietorship of a business may be decreased by
A
expenses and withdrawals of assets from the business by the owner
5
Q
The purchase journal is used for
A
recording purchase of an article on credit
6
Q
The records of a business are first written in a book called the
A
journal
7
Q
The selling price is determined by the cost of an item with an amount added to it. That amount added is called
A
mark-up
8
Q
The sole owner of a business is the
A
proprietor
9
Q
The time an owner allows for the payment of a scale is a/an
A
terms
10
Q
The total of sales of funeral services would be shown on the
A
income statement
11
Q
Which of the following is not a current asset?
- cash
- land
- inventory
- accounts receivable
A
land
12
Q
According to GAAP, a business is accounted for as a separate entity, separate and distinct from its owners. T/F
A
true
13
Q
A limited partnership allows an individual to invest and make management decisions in a business without incurring the liability associated with a regular partnership. T/F
A
false
14
Q
A partnership is limited to two individuals who both participate in the profits of the business according to some agreement. T/F
A
false
15
Q
A partnership is not a legal entity for most purposes. T/F
A
true
16
Q
A book for entry of a particular type of transaction is a/an
A
special journal
17
Q
Accounting information is used only by the owners of a business. T/F
A
false
18
Q
A book for recording the buying of goods on credit is called a
A
purchase journal
19
Q
After all adjusting and clearing entries are posted, the accounting cycle has been completed. T/F
A
false
20
Q
A check that has been issued but has not yet been paid is a/an
A
outstanding check
21
Q
An incoming partner is liable for partnership debts contracted before his entry into the business. T/F
A
true
22
Q
A CR side entry on a revenue account indicates the account has been
A
increased
23
Q
An individual owning a funeral home as a proprietorship reports business income on his own income tax returns and is generally not liable for debts incurred by the business. T/F
A
false
24
Q
A credit balance to show what is owed is normally shown as a/an
A
accounts payable
25
Debit memorandums originate with the buyer, while credit memorandums originate with the seller. T/F
false
26
A customers written promise to pay a sum of money to the business at a future date is called
note receivable
27
A decrease in net worth because of excess of costs and expenses over income is called
loss
28
A CR entry on an expense account indicates the account has been
decreased
29
A ledger is a book of
accounts
30
This group of accounts are credited to increase
liabilities and capital
31
This group of accounts when increased is debited
assets and expenses
32
To establish petty cash, you
DR petty cash and CR cash
33
Total debits and credits differences in a "T" account is the
balance
34
When a bank has been ordered to make payment on a check or draft, the bank is the
drawee
35
When a business keeps merchandise for sale, it is called
inventory
36
When a business owns things of value, they are classed as
assets
37
When a check or draft is made, the person who signs is known as
drawer
38
When a corporation makes a distribution of profits to its stockholders as declared by the board of directors, it is called
dividend
39
When a fixed asset is no longer of any value, the amount it will sell for is called
cost scrap value
40
Disbursements from petty cash funds are recorded in the accounts as they are made. T/F
false
41
Expenses incurred but not yet paid are called accrued expenses. T/F
true
42
Generally, you may only issue as many shares of total stock as you can sell or exchange in a one-year period. T/F
false
43
If the credit balance exceeds the debit balance in the income statement columns, the difference is net income for the period. T/F
true
44
If the total of the left side of an account exceeds the total of its right side, a credit balance is said to exist. T/F
false
45
Increases in all liability accounts are recorded by credits. T/F
true
46
A liability is something a funeral director
owes
47
Which government act regulates public entry and exit accommodations of the funeral home?
Americans with Disabilities Act
48
After completing interviews to hire a new employee and a decision is made not to hire a person because they were over the age of 55, this would be a violation of what government act?
Age Discrimination in Employment Act
49
What should be considered for business location?
room for expansion
50
What type of valuation method, to determine a selling price, is used by calculating the worth the business as if all tangible assets were sold at auction?
liquidation value approach
51
What is a disadvantage of the Limited Liability Company form of business?
if improperly structured, can be taxed as a "C" corporation
52
Making even small disbursements from cash receipts weakens internal control over cash. T/F
true
53
A loan from your bank which is secured by property is
a mortgage payable
54
Ordinary corporation stock usually entitles the owner to one vote for each ten shares he acquires plus the right to dividends. T/F
false
55
A mortgage payable for this month is a
current liability
56
Partnership property is not protected against the creditors of one partner. T/F
true
57
A person making a check or draft ordering payment to be made is the
drawer
58
A person owning a corporation's stock is called a
stakeholder
59
An official form which gives what is owed, what is owned, and what the owner is worth is the
balance sheet
60
A special fund for use is disbursing small sums of money is called a
petty cash
61
A tangible asset is a/an
capable of being touched
62
A total usually written in small pencil figures under the last entry of a column is
footing
63
A written promise to pay money to another person or business at a specific or determinable time is a/an
promissory note
64
When a fixed asset loses value due to wear over time, it is called
depreciation
65
When a funeral coach is purchased on credit, you
DR casket coach and CR accounts payable
66
When a liability account has a credit entry, it indicates the account has been
increased
67
When a liability account has a credit entry, it indicates the account has been
increased
68
When a liability account is DR, this indicates the account has been
decreased
69
When a proprietorship account is DR, it indicates the account has been
decreased
70
When all the accounts are listed showing their arrangement in the ledger, the listing is called the
chart of accounts
71
When an expense account is debited, it indicates the account has been
increased
72
When an income account is credited, it indicates that the account has been
increased
73
When business transactions result in increasing revenue, it is
income
74
Revenue accounts are closed to the income summary account by crediting revenues and debiting the income summary. T/F
false
75
Revenues usually increase both assets and owner equity. T/F
true
76
The balance sheet lists the assets of a business and the claims against those assets. T/F
true
77
The ending inventory of merchandise of one fiscal period is always the beginning inventory of the next period. T/F
true
78
The FIFO method of inventory valuation assigns the costs of the oldest units to the ending inventory. T/F
false
79
The gross profit method may be used to estimate the cost of inventory without the taking of a physical inventory. T/F
true
80
The left side of all accounts is referred to as the debit side. T/F
true
81
Accounts payable is a/an
liability account
82
The mechanics of double-entry bookkeeping require that for each transaction, total debits be equal in amount to total credits. T/F
true
83
Accounts receivable is a/an
asset account
84
The more people responsible for a given task, the effective the control. T/F
false
85
Accounts which you are unable to collect are
bad debts
86
The net worth of a firm is equal to its owner equity. T/F
true
87
An account called accounts payable will be shown on the
balance sheet
88
An official paper showing quantity, description, prices of items, total amount of purchase and terms of payments is called
invoice
89
Any debts that are not due and payable within a year are called
long-term liability
90
Any excess of current assets over current liabilities is called
net working capital
91
Any income received by not yet having services rendered is
deferred income
92
Anyone (person or company) who is to receive payment on a promissory note, check, draft, or money order is a
payee
93
Anyone who owes debts is a
debtor
94
The payment of a liability increases assets and the owner's equity. T/F
false
95
The principal of a note multiplied by the interest rate equals the interest on a note. T/F
false
96
The purchases account, used when merchandise is purchased for resale, shows whether the merchandise is on hand or has been sold. T/F
false
97
The purpose of the purchases account is to accumulate and summarize the cost of merchandise purchased during the period. T/F
true
98
The terms owner equity and liabilities are synonymous. T/F
false
99
The total assets of a firm are restricted to the amount that owners are able to provide with their own resources. T/F
false
100
Anything of value owned is a/an
asset
101
Theoretically, a bad debt becomes an expense when it is discovered to be uncollectible. T/F
true
102
To decrease an asset balance, you debit the account. T/F
false
103
Anything owed by a firm is
liabilities
104
Currency and coin kept in small amounts for payment of incidentals is called
petty cash
105
To the purchaser, the total cost of the goods acquired is always the amount paid to the supplier. T/F
false
106
A deduction allowed by the seller of goods or by the provider of services in order to motivate the customer to pay within a specified time.
cash discount
107
The quantity to be purchased which minimizes total costs is the
Economic Order Quantity (EOQ)
108
The average time required to sell inventory
age of inventory
109
An incentive offered to a buyer that results in a decreased cost per unit of goods or materials when purchased in greater numbers.
quantity discount
110
A trading arrangement in which a seller sends goods to a buyer or reseller who pays the seller only when the goods are sold.
consignment
111
You decide to utilize the Fixed Multiple method of price determination (mark-up = 300%) in your funeral home. You purchased two caskets today, one that cost you $920 and one that cost you $1100, what will be the retail price for these two caskets?
$2760 and $3300
112
A method of pricing by which each unit of service and merchandise is priced separately.
itemization
113
A price determination method whereby the wholesale cost is multiplied by a constant factor.
fixed multiple markup
114
A pricing method where there is an inverse relationship between the markup and the wholesale cost of the merchandise.
declining price
115
A pricing method which groups together selected services and/or merchandise.
package pricing
116
A method of price quotation in which one price includes both service and casket.
unit pricing
117
A method of price quotation showing separately the price of the service to be rendered and the price of the casket.
bi-unit pricing
118
A business or company that makes or manufactures a product is called a
manufacturing business
119
When a company buys a product from another business and sells it to its customers it is referred to as a _______ business.
retailer or merchandising
120
When a business provides a particular service to its customers it is aptly referred to as a ____ business.
service
121
A one owner business, the owner is responsible for reporting business income or loss on their own personal income tax.
sole proprietorship
122
A business structure which combines aspects of partnerships with the limited liability of a corporation.
limited liability company
123
A business formation that consists of two or more people that have combined their resources to carry on as co-owners of the lawful enterprise.
partnership
124
A business organization that has a distinct existence separate and apart from the existence of its individual members.
corporation
125
A statistical study of human populations regarding size, density, distribution, composition, and income
demographics
126
A summary of how a business intends to organize and implement activities required in order to be successful.
business plan
127
A tangible long-term operating asset.
fixed asset
128
Long-term capital invested in a small business.
fixed capital
129
Makes it illegal to discriminate against a person with a disability in private companies and state and local governments.
Americans with Disabilities Act of 1990
130
Prohibits discrimination against protected veterans by covered federal contractors and subcontractors.
Vietnam Veterans' Readjustment Assistance Act of 1974
131
A qualification that is necessary for the job.
Bona Fide Occupation Qualification
132
The number of times average inventory has been sold or used during a period.
inventory turnover
133
The difference between merchandise cost and retail selling price.
markup
134
A reduction of selling price below the original selling price.
markdown
135
Planning and executing the development, pricing, promotion, and distribution of a firm's goods and services.
marketing
136
The process of making the public aware of the products and services offered by a business.
advertising
137
Actions taken by a business entity in promoting goodwill between the organization and the public, the community, its employees and customers.
public relations
138
A brand is a name, term, design, or symbol (or combination of these) that identifies the products and/or services of a seller or group of sellers.
branding
139
A formal financial statement that reports earning activities for a specified time.
income statement
140
A financial statement that presents a firm's assets, liabilities, and owner's equity at a particular point in time.
balance sheet
141
The computation of financial data to analyze and compare a firm's economic performance and to expose business risks.
ratio analysis
142
The difference between total revenue and total expenses when total expenses are greater.
net loss
