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Financial Accounting - ACCT9101 > Chapter 4 - College Accounting: A Practical Approach > Flashcards

Chapter 4 - College Accounting: A Practical Approach Flashcards

1
Q

What is a worksheet?

A

A tool accountants use to organize and check data before preparing formal financial statements

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2
Q

Is a worksheet a formal statement?

A

NO

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3
Q

How many sections does the worksheet have?

A

5

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4
Q

What are the sections of the worksheet?

A
  1. Trial Balance
  2. Adjustments
  3. Adjusted Trial Balance
  4. Income Statement
  5. Balance Sheet
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5
Q

What are the purpose of adjusting entries?

A

Bring accounts up to date and recognize the revenue & expenses in the proper accounting period

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6
Q

What are some examples of items you need to adjust on the worksheet?

A
  • supplies
  • Prepaids
  • Equipment (depreciation)
  • expense (salaries, rent and supplies)
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7
Q

What is depreciation?

A

The allocation of the cost of an asset over its useful life

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8
Q

What is the most simple method of depreciation?

A

Straight line method

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9
Q

What does the below equation represent?

(Cost - Residual Value) / Estimated Years of Usefulness

A

Straight line depreciation

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10
Q

Are dollar signs and commas used on worksheets?

A

NO

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11
Q

Does a trial balance have to be completed separately from the worksheet?

A

NO it can be prepared right in the work sheet or if you prefer separate

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12
Q

Should adjustments on the work sheet still follow the rules of double entry accounting?

A

YES

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13
Q

What is the original cost considered in accounting? The Term for it..

A

Historical Cost

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14
Q

Which reports reflect the historical cost?

A

Balance sheet and ledger

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15
Q

What determines the used up amount of equipment over a set period of time?

A

Depreciation

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16
Q

What rules are set forth by the CRA for reporting depreciation for tax purposes?

A

CCA / Capital Cost Allowance

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17
Q

What is the definition of the straight line depreciation method?

A

Equal amounts are take over a successive period of time

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18
Q

What is residual value?

A

The value of an item at the end of its useful life

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19
Q

Depreciation is what kind of account?

A

Expense

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20
Q

Accumulated Depreciation is what type of account?

A

Contra-Asset

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21
Q

What is the purpose of the accumulated depreciation account?

A

Keep a running total of depreciation apart from the historical cost

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22
Q

Do Contra-Asset accounts work the same as asset accounts in terms of debits and credits?

A

NO

23
Q

What is a book value?

A

Remaining portion of the historical cost after depreciation is deducted that can be further reduced

24
Q

What is another name for book value?

A

Carrying Value

25
Q

Are book value and market value the same?

A

NO

26
Q

What would cause the historical cost to change?

A

If it is sold, retired or improved

27
Q

What rules do you want to think of when dealing with accrued salaries?

A

That revenue and expenses are recorded when they occurred not when the exchange of cash happens

28
Q

What is an accrued salary?

A

Unrecorded or unpaid salary’s that are not yet due

29
Q

What is another name for accrued salaries?

A

Salaries Payable

30
Q

What type of accounts is accrued salaries?

A

Liability

31
Q

When doe the accrued salaries liability account get reduced?

A

When the salary is paid

32
Q

What information does the adjusted trial balance show?

A

Summarizes the previous two sections of the worksheet

33
Q

To get the adjusted trial balance, what do you do?

A

Add the two previous columns and transfer the totals to the side with the larger figure

34
Q

What rule should you keep in mind when calculating the adjusted trial balance?

A

Debits and credits must balance

35
Q

What information doe the income statement on the worksheet show?

A

The adjusted revenue and expenses from the adjusted trial balance

36
Q

What two accounts are not listed on the income statement that we have added to the worksheet?

A

Accrued salaries and accumulated deprecation

37
Q

What are the three steps of preparing the income statement on the worksheet?

A
  1. Total the debits and credits
  2. Calculate the difference and place in the correct columns
  3. Total the 2 columns
38
Q

What accounts transfer from the adjust trial balance to the balance sheet on the worksheet?

A
  • assets
  • contra assets
  • liabilities
  • capital
  • withdrawals
39
Q

Which column does the net income carry over to?

A

Credit column

40
Q

What should you do with your finished worksheet before preparing the formal statements?

A

Double check your work

41
Q

For the formal income statement, will all the figures be listed in the worksheet?

A

YES

42
Q

Are there debit and credit columns on the formal income statement?

A

NO

43
Q

What is the inside column of the formal income statement used for?

A

Subtotalling

44
Q

What does not go on the formal income statement ?

A

Withdrawals

45
Q

Which is the first formal statement to be prepared after the worksheet?

A

Income Statement

46
Q

What will not be potentially portrayed on the worksheet you may need for preparing the formal statement of owners equity?

A

Beginning capital

47
Q

Where can you find the beginning capital for the formal statement of owners equity?

A

The Ledger

48
Q

What often doesn’t matche between the worksheet and the formal balance sheet?

A

The accounts

49
Q

Why do the accounts not match on the worksheet and the formal balance sheet?

A

They are grouped differently

50
Q

What account reduces the equipment on the formal balance sheet from the worksheet?

A

Accumulated deprecation

51
Q

What account reduces the owners equity on the formal balance sheet from the worksheet?

A

Withdrawals

52
Q

Why must you make the adjustments from the worksheet?

A

To ensure the ledger accounts correspond with the reports

53
Q

What do you use to adjust the journal with the adjustments from the worksheet?

A

Adjusting journal

54
Q

When must you make adjustments from worksheet by?

A

The start of the next accounting period

Financial Accounting - ACCT9101 (6 decks)

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