CHAPTER 4 Flashcards
Types of Major Accounts
Account is the basic storage of information in accounting. An account may be depicted through a ‘T-account.’ Which of the following is not one of the parts of a T-account?
1. Account title
2. Left side or debit side
3. Right side or credit side
4. Upside down or bottoms up
4
Upside down or bottoms up
Which of the following is not one of the five major accounts?
1. Assets
2. Income
3. Equity
4. Losses
4
Losses
Which of the following is not one of the balance sheet (statement of financial position accounts?
1. Assets
2. Liabilities
3. Equity
4. Income
4
Income
It is a list of all the accounts used by a business.
1. Trial balance
2. Contact list
3. Chart of accounts
4. Organizational chart
3
Chart of accounts
An account with the following numbering ‘2100’ is most likely to be a(an)
1. asset account.
2. liability account.
3. equity account.
4. expense account.
2
liability account.
The money held by a business, including the increases or decreases thereto, is recorded in this account.
1. Cash
2. Accounts receivable
3. Owner’s equity
4. Sales
1
Cash
Receivables that are supported only by oral or informal promise to pay.
1. Cash
2. Accounts receivable
3. Accounts payable
4. Notes receivable
2
Accounts receivable
Contributions by the business owner to the business and profits or losses of the business are recorded in this account.
1. Owner’s equity
2. Owner’s drawings
3. Sales
4. Salaries expense
1
Owner’s equity
Revenues earned from the sale of goods are recorded in this account.
1. Inventory income
2. Goods income
3. Sales
4. Service fees
3
Sales
This represents the value of inventories that have been sold, and consequently charged as expense, during the accounting period.
1. Inventory
2. Cost of sales(Cost of goods sold)
3. Supplies expense
4. Freight-out
2
Cost of sales (Cost of goods sold)
Receivables that are supported by written or formal promises to pay in the form of promissory notes.
1. Inventory
2. Accounts receivable
3. Notes payable
4. Notes receivable
4
Notes receivable
Goods that are held for sale by a business.
1. Cash
2. Accounts receivable
3. Accounts payable
4. Inventory
4
Inventory
The unused portion of rent paid in advance.
1. Prepaid rent
2. Rent expense
3. Cash
4. Inventory
1
Prepaid rent
Salaries earned by employees but not yet paid.
1. Salaries expense
2. Salaries payable
3. Employee points
4. Employee credits
2
Salaries payable
Salaries earned by employees, whether paid or not.
1. Salaries expense
2. Salaries payable
3. Employee points
4. Employee credits
1
Salaries expense
Temporary withdrawals of the owner from the business during the period are recorded in this account.
1. Owner’s expense
2. Owner’s drawings
3. Withdrawal expense
4. Salaries expense
2
Owner’s drawings
Income collected in advance but not yet earned.
1. Unearned income
2. Early income
3. Sales
4. Service fees
1
Unearned income
Obligations supported by oral or informal promises to pay by the debtor.
1. Cash
2. Accounts receivable
3. Accounts payable
4. Notes payable
3
Accounts payable
The cost of inventories that have been sold during the period.
1. Cost of sales
2. Cost of inventories
3. Inventory
4. Selling expense
1
Cost of sales
The amount of estimated losses from uncollectible accounts receivable during the period.
1. Good expense
2. Bad expense
3. Ugly expense
4. Bad debts expense
4
Bad debt expense
A merchandising or manufacturing business uses this account to record revenues earned from primary business activities.
1. Sales
2. Services
3. Gains
4. Seals
1
Sales
Obligations supported by written or formal promises to pay by the debtor in the form of promissory notes.
1. Notes receivable
2. Accounts receivable
3. Accounts payable
4. Notes payable
4
Notes payable
The structure owned and being used by a business in its operations.
1. Building
2. Base
3. Castle
4. Kingdom
1
Building
The portion of the cost of a building that is already recognized as expenses since the building was acquired and made available for use.
1. Accumulated depreciation - building
2. Upkeep
3. Accumulated upkeep
4. Repairs and maintenance expense
1
Accoumulated depreciation - building
The cost of unused office and other supplies.
1. Prepaid rent
2. Prepaid supplies
3. Cash
4. Accounts receivable
2
Prepaid supplies
Interest incurred by a borrower but not yet paid.
1. Interest payable
2. Interest expense
3. Notes payable
4. Notes receivable
1
Interest payable
Interest incurred by a borrower, whether paid or not.
1. Interest payable
2. Interest expense
3. Notes payable
4. Notes receivable
2
Interest expense
The seller’s cost of delivering goods to customers.
1. Freight-out
2. Freight-in
3. Freight-good
4. Freight-bad
1
Freight-out
The cost of promotional or marketing activities during the period.
1. Market expense
2. Advertising expense
3. Groceries
4. Insurance expense
2
Advertising expense
The cost of gasoline, hotel accommodation, taxi fare, and similar expenditures.
1. Transportation and travel expense
2. Interest expense
3. Taxi expense
4. Gas expense
1
Transporation and travel expense
The cost of the lot on which the building of a business has been constructed is recorded in an account described as
1. Realm.
2. Ground.
3. Land.
4. Earth.
3
Land.
Entity A sells an asset that is not an inventory for Php100. The carrying amount of the asset is Php180. The Php80 difference represents a
1. gain.
2. loss.
3. revenue.
4. interest income.
2
loss.
Interest earned by a lender but not yet collected.
1. Interest receivable
2. Interest income
3. Notes payable
4. Notes receivable
1
Interest receivable
Interest earned by a lender, whether collected or not.
1. Interest receivable
2. Interest income
3. Notes payable
4. Notes receivable
2
Interest income
Revenues earned from rendering services.
1. Unearned income
2. Rendering income
3. Sales
4. Service fees
4
Service fees
The cost of supplies used in an accounting period.
1. Prepaid supplies
2. Supplies cost
3. Supplies expense
4. Surprise expense
3
Supplies expense
The portion of the cost of a building or equipment that has been charged as expense in the current accounting period.
1. Accumulated deduction
2. Deduction expense
3. Accumulated depreciation
4. Depreciation expense
3
Accumulated depreciation
You opened up a business. Your initial investment to the business will be recorded in which of the following accounts?
1. Owner’s payable
2. Owner’s equity
3. Notes payable
4. Accounts payable
2
Owner’s equity
In conjunction with #38 above, which of the following would most likely be your first expense?
1. Equipment
2. Inventory
3. Taxes and licenses
4. Utilities expense
3
Taxes and licenses
You purchase goods that will be held for sale in the ordinary course of your business activities. You will record the goods as
1. Expense.
2. Income.
3. Accounts receivable.
4. Inventory.
4
Inventory
You are a business owner. Your business needed additional capital so you obtained a loan from a bank. The bank made you sign a contract promising to repay the loan after a year. Which of the following accounts is increased by this transaction?
1. Accounts payable
2. Notes payable
3. Accounts receivable
4. Notes receivable
2
Notes payable
From the point of view of the bank who lent you the loan in #41 above, which of the following accounts is increased?
1. Accounts payable
2. Notes payable
3. Accounts receivable
4. Notes receivable
4
Notes receivable
A customer bought goods from your business, on credit. The customer orally promised to pay the sale price next week. Which of the following accounts is increased by this transaction?
1. Accounts payable
2. Notes payable
3. Accounts receivable
4. Notes receivable
3
Accounts payable
From the point of view of the customer who bought goods from your business in #43 above, which of the following accounts is increased?
1. Accounts payable
2. Notes payable
3. Accounts receivable
4. Notes receivable
1
Accounts payable
When you collected the dues of the customer in #43 above, which of the following accounts is increased?
1. Accounts payable
2. Cash
3. Accounts receivable
4. Notes receivable
2
Cash
From the point of view of the customer who paid you in #45 above, which of the following accounts is decreased?
1. Inventory
2. Cash
3. Accounts receivable
4. Notes receivable
2
Cash
You purchased a computer for Php100,000. Which of the following accounts is increased by this transaction?
1. Cash
2. Owner’s capital
3. Computer equipment
4. Inventory
3
Computer equipment
You expect to use the computer in #47 above over the next 5 years. How much is the depreciation expense per yer?
1. 10,000
2. 20,000
3. 7,143
4. 100,000
2
20,000
After using the computer #’s 47 and 48 above for 3 years, how much is the balance of the “Accumulated depreciation - Computer equipment” account?
1. 60,000
2. 30,000
3. 20,000
4. 90,000
1
60,000
At the end of Year 2, how much is the carrying amount of the computer equipment in #’s 47 and 48 above?
1. 50,000
2. 40,000
3. 60,000
4. 0
3
60,000
