General Flashcards
FOB shipping point means
Buyer is responsible for fees
Assets and Expense are increased by a
Debit
True or False.
Cash account would not be closed at the end of the accounting period?
True
Which accounts decrease owner’s equity?
Expense Accounts
Balance Sheet Accounts
Assets, liabilities, Owner’s Equity
Income Statement Accounts
Income, COGS, Expenses, other Income and expenses
Accounts Payable is reflected on the
Balance Sheet
Fees Earned - Total operating Expenses =
Net Income
Assets - Liabilities =
Owner’s Equity
Liabilities + Owner’s Equity =
Assets
Normal Credit balance of Revenue =
Credit
Assets & Expenses have a normal __________ balance.
Debit
Capital has a normal _________ balance.
Credit
A business pays weekly salaries of $30,000 on Friday for a five-day week ending on that day. The adjusting entry necessary at the end of the fiscal period ending on Weds is
Dr Salary Expense, $18,000
Cr Salaries Payable, $18,000
To figure, divide salary by days = salary per day Then, multiply the salary per day by how many days are left after the pay period ends. 30,000/5 day week = 6,000 per day
6,000 x 3 days left (Wed. Thurs. Fri) = 18,000
The following accounts were taken from the Adjusted Trial Balance:
Accumulated Depreciation $ 4,600 Fees Earned 8,000 Depreciation Expense 800 Rent Expense 700 Prepaid Insurance 4,500 Supplies 1,900 Supplies Expenses 4,200
Net income for the period is _____?
2,300
Fees Earned minus expenses = net income Fees Earned - Depreciation Exp., Insurance Exp., Rent Exp.
8,000-800-700-4200 = 2,300
A company with sales of $51,000, Cost of Goods Sold 10,000 and a net income of $15,000 would operating expenses of
$26,000
Sales -Cost of Merchandise sold =Gross Profit - Operating Expenses =Net Income Given just Sales and Net Income amounts you cannot determine how much the cost of merchandise sold would be or how much operating expenses would be. If given either of those two you could figure it out.
Which of the following accounts should be closed to Income Summary at the end of the fiscal year?
Cost of Merchandise Sold and all operating expenses:
The face value of a note is
the principal of the original note with no interest added.
What is the formula to calculate interest due on the following note.
60-day,12% note for $48,000, dated June 8, is received from a customer. The interest due at maturity is
Face Amount x interest % x time = interest
48,000 X 12% X 60/360 = 960
Allowance for Doubtful Accounts has a credit balance of $100 at the end of the year (before adjustment), an “analysis of accounts receivables” indicates we have accounts that are doubtful of $5,000. What is the adjustment to record the allowance for doubtful accounts?
DR Uncollect. Accounts Expense 4900
CR Allowance Doubtful Accounts 4900
The allowance for doubtful debts account already has a credit balance of $100. Simply subtract this credit from the new analysis amount and that amount would be your AJE.
Merchandise inventory at the end of the year was inadvertently overstated. What is the effect of the error on gross profit?
Overstated
A new machine with a initial cost of $44,000, a residual value of $4,000. Has a depreciable cost of?
40,000
Revenues & Liabilities have a normal ___________ balance.
credit
Merchandise Inventory is a ________ asset.
Current
In credit terms of 1/10, n/30, the “1” represents the
percent of the cash discount
the revenue account for a merchandising business is entitled
Sales
FOB Destination means
Seller pays shipping costs
