Final Exam -- MyAccountingLab Quizzes 1-4 Flashcards
The amount a company expects to collect from customers appears on the
balance sheet in the current assets section
The financial statement that reports revenues and expenses is called the
income statement
Freedom Corporation hold cash of $9,000 and owes $28,000 on accounts payable. Freedom has accounts receivable of $33,000, inventory of #22,000, and land that cost $45,000. How much are Freedom’s total assets and liabilities?
Total Assets Total Liabilities
$109,000 $28,000
Best Instruments had retained earnings of $200,000 at December 31, 2011. Net income for 2012 totaled $105,000, and dividends for 2012 were $45,000. how much retained earnings should Best report at December 31, 2012?
$260,000
Which financial statement covers a period of time?
Income Statement AND Statement of Cash Flows
Revenues are
increases in retained earnings resulting from selling products or performing services
During May, assets increased by $28,000 and liabilities increased by $9,000. Stockholders’ equity must have
increased by $19,000
Assets - Liabilities = Stockholders’ equity
The primary objective of financial reporting is to provide information
useful for making investment and credit decisions
Net income appears on which financial statements(s)
Statement of Retained Earnings And Balance Sheet
Assets are usually reported at their
historical cost
Where do we first record a transaction
journal
Purchasing a laptop computer on account will
increase total liabilities
increase total assets
have no effect on stockholders’ equity
A trial balance is NOT the same as a balance sheet.
true
A trial balance can verify the quality of debits and credits.
true
A trial balance can be taken at any time.
true
A trial balance lists all the accounts with their current balances.
true
Liabilities are decreased by debits.
true
Dividends are NOT increased by credits.
true
Revenues are increased by credits.
true
Assets are increased by debits.
true
Receiving cash from a customer on account will
have no effect on total assets
What is the effect on total assets and stockholders’ equity of paying the telephone bill as soon as it is received each month?
Total Assets Stockholders’ Equity
Decrease Decrease
Purchasing a building for $105,000 by paying cash of $25,000 and signing a note payable for $80,000 will
Increase both assets and liabilities by $80,000
The journal entry to record the receipt of land and a building and the issuance of common stock
debits Land and Building and
credits common stock
bad question #9 quiz chapter 2
true
The journal entry to record the purchase of supplies on account
debits supplies and
credits accounts payable
A major purpose of preparing closing entries is to
update the Retained Earnings account
For 2012, Bryant Company had revenues in excess of expenses. Which statement describes Bryant’s closing entries at the end of 2012?
Revenues will be debited
Expenses will be credited
Retained Earnings will be credited
Fred Harris began a music business in July 2012….
see question #3 chapter 3 quiz
true
The unearned revenue account of…
see queston #4 chapter 3 quiz
true
see question #5 chapter 3 quiz
true
An adjusting entry recorded June salary expense that will be paid in July. What statement best describes the effect of this adjusting entry on the company’s accounting equation?
Assets are not affected
Liabilities are increased
Stockholders’ equity is decreased
What is the effect on the financial statement of recording depreciation on equipment?
net income, assets, and stockholders’ equity are ALL decreased
see question #8 chapter 3 quiz
true
see question #9 chapter 3 quiz
true
Give examples of accounts included in the closing entries.
Service Revenue
Retained Earnings
Depreciation Expense
(NOT accumulated deprecation)
In a bank reconciliation, a bank collection of a note receivable is
added to the book balance
A cash budget helps control cash by
helping to determine whether additional cash is available for investments or new financing is needed
If a bookkeeper mistakenly recorded a $19 deposit as $91, the error would be shown on the bank reconciliation as a
$72 deduction from the book balance
91 - 19 is 72
Give examples of control for cash received over-the-counter
the cash draswer should open only when teh sales clerk enters an amount on teh keys
a printed receipt must be given to the customer
the customer should be able to see the amounts entered into the cash register
(NOT – the sales clerk must have access to the cash register tapes – NOT)
Requiring that an employee with no access cash do the accounting is an example of which characteristic of internal control
separation of duties
In a bank reconciliation, an outstanding check is
deducted from the bank balance
Give examples of objectives of internal control
to safeguard assets
to ensure accurate and reliable accounting records
to comply with legal requirements
(NOT - to maximize net income - NOT)
In a bank reconciliation, an EFT cash payment is
deducted from the book balance
Before paying an invoice for goods received on account, the controller or treasurer should ensure that
the company has not already paid this invoice
the company is paying for the goods it ordered
the company is paying for the goods it actually received
If a bank reconciliation included a deposit in transit of $790, the entry to record this reconciling item would include a
NO ENTRY IS REQUIRED
