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Section 1: Terms > Acct Fundamentals Assessment > Flashcards

Acct Fundamentals Assessment Flashcards

1
Q

In a sole proprietorship, the owner is NOT responsible for the debts of the business if the company is unable to pay. (T/F)

A

False

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2
Q

A partnership has __________ owners.

A

two or more

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3
Q

Assets always equal debts of the business plus the financial interest of the owner. (T/F)

A

True

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4
Q

The property that a business owns is referred to as its __________.

A

assest

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5
Q

A debit has the same impact on expenses and liabilities. (T/F)

A

False

A debit increases expenses but decreases liability accounts.

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6
Q

Expense accounts are increased on the ____________________ side of the T account.

A

debit

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7
Q

Account names are written in the general journal exactly as they appear in the chart of accounts. (T/F)

A

True

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8
Q

The process of recording transactions in a journal is referred to as ____________________.

A

journalizing

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9
Q

If the adjustment for supplies used is not recorded, the firm’s assets will be overstated. (T/F)

A

True

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10
Q

Accumulated depreciation is classified as a(n) ___________ account.

A

contra-asset

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11
Q

On a worksheet, the adjusted balance of Supplies is extended from the Adjusted Trial Balance Debit column to the ___________ Debit column.

A

Balance Sheet

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12
Q

The entry to close an expense account requires a credit to the Income Summary account. (T/F)

A

False

(The entry to close an expense account will include a credit to the expense account, with an offsetting debit to the income summary account.)

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13
Q

If the Income Summary account has a debit balance before it is closed, the firm experienced ____________________ from operations.

A

a net loss

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14
Q

After all the closing entries are posted to the ledger, the Income Summary account will have ____________________ balance.

A

a zero

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15
Q

A sales return or a sales allowance is usually recorded in the sales journal. (T/F)

A

False

(A sales return or a sales allowance may be recorded in either a general journal or a special sales returns and allowances journal, depending on the volume of sales returns and allowances, but they are not recorded in the sales journal.)

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16
Q

The quantity of goods kept on hand to sell to consumers is called _________________________.

A

merchandise inventory

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17
Q

The Purchases Returns and Allowances account has a normal debit balance. (T/F)

A

False

Purchase returns and allowances is a contra cost of goods sold account. Therefore, it has a normal credit balance.

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18
Q

The amount of an allowance received from a creditor is posted to the __________ column of the creditor’s account in the accounts payable subsidiary ledger.

A

debit

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19
Q

After a multicolumn special journal such as a cash receipts journal is totaled, it should be proved to be sure that the debits and credits in the journal are equal. (T/F)

A

True

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20
Q

Checks issued by a firm and entered in its accounting records that have not been paid by the bank are called __________ checks.

A

outstanding

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21
Q

To arrive at the accurate balance on a bank reconciliation statement, it is necessary to deduct any NSF checks from the bank statement balance. (T/F)

A

False

(To arrive at the accurate balance on a bank reconciliation statement, it is necessary to deduct any NSF checks from the book balance, not the bank statement balance.)

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22
Q

To transfer ownership of a check from one party to another, it is necessary to __________ the check.

A

endorse

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23
Q

The overtime rate is usually one and one-half times the regular hourly rate. (T/F)

A

True

24
Q

If an employee works for more than one employer during the year, the social security tax is deducted and matched by only one employer. (T/F)

A

False

(If an employee works for more than one employer during the year, the social security tax is deducted and matched by each employer.)

25
Q

A(n) __________ is paid by the company to carry out a specific task or job but is not under the direct supervision, control, and direction of the company.

A

independent contractor

26
Q

A worker who is paid an agreed amount for each week or month or year, regardless of the actual hours worked, is said to be paid on a(n) __________ basis.

A

salary

27
Q

The amount of social security tax withheld depends on an employee’s gross earnings, marital status, and number of withholding allowances. (T/F)

A

False

28
Q

Federal law requires that social security, Medicare, and federal income taxes be deducted from the gross pay of most employees. (T/F)

A

True

29
Q

Medicare taxes are levied in an equal amount on both employers and employees. (T/F)

A

True

30
Q

Once an employee’s year-to-date wages reach a certain amount prescribed by law, social security tax is no longer withheld. (T/F)

A

True

31
Q

Multiple copies of Form W-3 are provided to each employee by January 31 for the previous calendar year’s earnings. (T/F)

A

False

(Multiple copies of Form W-2 are provided to each employee by January 31 for the previous calendar year’s earnings. Form W-3 is submitted with Forms W-2 to the Social Security Administration.)

32
Q

If an employee leaves the firm before the end of the year, the employee may ask for and receive a Form W-2 within 30 days after the request or after the final wage payment. (T/F)

A

True

33
Q

The entry to record a payroll tax that is incurred by the employer would include a debit to a(n) __________ account.

A

expense

34
Q

Form 940 must be filed __________ time(s) a year.

A

one

35
Q

Both the employer and the employee are responsible for paying…

A

Social Security and Medicare.

36
Q

After the closing entries are posted, the balance of the owner’s capital account agrees with the amount of owner’s equity shown on the balance sheet for the period. (T/F)

A

True

37
Q

The ____________________ is prepared to make sure that the general ledger is in balance after adjusting and closing entries have been recorded and posted.

A

post-closing trial balance

38
Q

Under a periodic inventory system, the Merchandise Inventory account is debited when goods are purchased for resale and credited when goods are sold and delivered to customers. (T/F)

A

False

(All purchases of merchandise are debited to the Purchases account, while all sales of merchandise are credited to the Sales account.)

39
Q

The account “allowance for doubtful accounts” is a contra-revenue account. (T/F)

A

False

Allowance for Doubtful Accounts is a contra-asset account that is reported on the balance sheet.

40
Q

To determine the amount of the annual depreciation, the depreciable base is divided by the __________.

A

useful life in years

41
Q

The procedure that most nearly attains the objective of matching revenues and expenses to specific accounting periods is called the __________ basis of accounting.

A

accrual

42
Q

Net income is recorded on the net income line in the __________ column of the _________ section of the worksheet.

A

credit column of the balance sheet section

43
Q

The statement of owner’s equity is prepared before the balance sheet so that the ending owner’s capital balance is available for the balance sheet. (T/F)

A

True

44
Q

After all adjusting entries are posted, the balances of the general ledger accounts should match the amounts shown in the Adjusted Trial Balance section of the worksheet. (T/F)

A

True

45
Q

All accounts appearing in the ____________________ section of the worksheet are closed to the Income Summary account.

A

income statement

46
Q

An adjusting entry was made for $600 of accrued salaries at the end of 2021. The adjusting entry was then reversed. To record the first payroll of 2022, which totaled $1,500, Salaries Expense should be debited for $___________________.

A

$1500

47
Q

An income statement that has one total for all revenues and one total for all expenses is known as a…

A

single-step income statement

48
Q 
Which of the following is not a current liability?
Multiple Choice
•	Accounts Payable
•	Salaries Payable
•	Prepaid Insurance
•	Interest Payable
A

prepaid insurance

49
Q

A double line drawn under the figures in a money column shows that the computation is complete. (T/F)

A

True

50
Q

The __________ is the financial report that shows the assets, liabilities, and owner’s equity of a business on a specific date.

A

balance sheet

51
Q 
The balance sheet shows:
Multiple Choice
•	the results of business operations.
•	all revenues and expenses.
•	the amount of net income or loss.
•	the financial position of a business at a given time.
A

the financial position of a business at a given time.

52
Q

The Balance Ledger form displays the date, description, post reference, debit, and credit for each entry. (T/F)

A

True

53
Q

Which of the following statements is NOT correct?
Multiple Choice
• The description of a journal entry should include a reference to the source of the information contained in the entry.
• If goods are purchased on credit, the supplier’s invoice number is used as the source document for the transaction.
• The credit portion of a general journal entry is always recorded first.
• A firm should be able to trace amounts through the accounting records and back to their source documents.

A

The credit portion of a general journal entry is always recorded first.

(Debit is always recorded first.)

54
Q

The description of a journal entry should include a reference to the source of the information contained in the entry. (T/F)

A

True

55
Q

If goods are purchased on credit, the supplier’s invoice number is used as the source document for the transaction. (T/F)

A

True

56
Q

The balance sheet shows…

A

the financial position of a business at a given time.

Section 1: Terms (14 decks)

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