Part 1 Flashcards
Basic accounting theory is based on
double entry
The group of accounts which you debit when increased are
assets and expenses
The group of accounts which you credit to increase are
liabilities and capital
When a funeral director buys a casket coach on credit, he would
debit casket coach and credit accounts payable
The payment of rent buy cash is recorded
debit rent expense and credit cash
Purchase of office supplies on credit is recorded by
debit office supplies and credit accounts payable
A ledgar is a book of
accounts
An entry on the debit side of a liability account indicates the accounts had been
decreased
An entry made on the debit side of the proprietorship account indicates that the account has been
decreased
An entry made on the debit side of an expense account indicates that the account has been
increased
The beginning balance in the supplies account is $600, During the mouth an additional $800 worth of supplies were purchased, At the end of the month, an inventory of the supplies found that only $300 remained on hand. What would be the amount of the Adjusting entry for the supplies account?
$1100
An entry made on the debit side of an asset account indicates that the account had been
increased
The things of value owned by a business are
assets
An accounting year ending on some date other than December 31 st is called
fiscal year
A person to whom a debit is owned is called a
creditor
Which of these does not appear on the balance sheet
expenses
Liabilities are all things a funeral director
owes
a profit and loss statement can be prepared
at any time
An entry on the credit side of a revenue account indicates the account has been
increased
When cash is spent in the acquisition of an asset the net worth of a business is
not affected
The process of recording information in the ledger is caled
posting
Accounts Receivable is a/an
asset account
Another term for Profit and Loss Statement is
Income Statement
The amount of revenue from the sale of funeral services would be shown on the
Profit and Loss Statement
The right side of a statement account is called the
credit side
The totaling of a column in a journal or ledger account is called
footing
Advertising expense would be reflected on the
Income Statement
The accounts payable account would be shows on the
Balance Sheet
A group of accounts constitutes a/an
ledger
A person or concern, usually a bank, that has been ordered to make payment on a check or draft is called
drawee
A person or company who will receive payment on a promissory note, check, draft or money order is called the
payee
F.I.C.A refers to
Social secruity
Property of a relatively permanent nature used in the operation of a business and not intended for resale is called
fixed asset
Debts that are not due and payable within a year are called
fixed liablities
The difference between cost of goods sold and their selling price is called
gross profit
the excess of current assets over current liabilities is called
working capital
A written promise of a customer to pay the business a sum of money at a future date is called
note recievable
Goods purchased for resale at a profit
merchandise
The difference between net sales and cost of goods sold
gross margin
Money paid for the use of money is called
interest
The increase in net worth due to the excess of income over costs and expenses is called
profit
Assets= Liabilities+ Owner’s Equity is the
accounting equation
A language of business employed to communicate financial information based upon the recording, classification, summmarization, and interpretation of financial data is called
accounting
A synonym for fair wear and tear of a durable
depreciation
Which of these does not qualify as a current asset?
land
If the total of the opening expenses section of the income statement is smaller than the total of the income section, the difference is
net profit
Expense means a/ an
decrease in owners equity
Which of the following accounts would be used to assist the accountant in an adjusting entry involving depreciation
accumulated sepreation
The difference between the two sides if an account is called
account balance
The title of an account which would normally have a credit balance is
accounts payable
An increase in proprietorship as in result of a business transaction is a /an
income
A list of accounts that shows the arrangement of the account in the ledger is called
Chart of Accounts
Double entry bookkeeping means an entry is made
as a debit and credit
The proprietorship of a business may be increase by
net income and investment of assets in the business by the owner
The proprietorship of a business may be decrease by
expenses and withdrawals of assets from the business by the owner
To establish a petty cash fund, one would
debit petty cash and credit cash
The abbreviation for “debit” is
Dr.
The abbreviation for “credit” is
Cr.
A person who signs a check or draft ordering payment to be made is called the
drawer
A disbursement is a
payment
What would be the closing entry to close the revenue account?
debit revenue, credit expense and revenue summary
Income received but not yet earned is
deferred income
A paper showing quantity, description, prices of items, total amount of purchase, and terms of payment is a/ an
invoice
Income received but not earned is
Deferred income
What would be the closing entry to close the revenue accounnt
debit revenue, credit expense and revue summary
One who has made a sale is called a/ an
vendor
An estimate of revenue and probable expense for a given period of time is a
budget
The person or business concern to whom a shipment is made is a
consigness
A distribution of profits of a corporation to its stockholders as declared by the board of director is stockholders as declared by the board of director is
dividend
The person who orders the bank to make payment of a financial instrument is properly termed a / an
drawer
The sole owner of a business is a
proprietor
A fund of currency and coin established for the payment of small amounts of money is
petty cash
The difference between total sales and sales returns and allowances is
net sales
The amount added to the cost of an article to determine the selling price of that article is the
mark- up
A total, written in small pencil figures, under the last entry in a column is the
footing
A double line under the last entry on a T- account means
the entry is complete
Increases in the owner’s equity resulting from business operations is known as
income
