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Accounting > Review > Flashcards

Review Flashcards

1
Q

An incentive discount for the customer to pay early is called…

A

Prompt Payment Discount (606)

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2
Q

What account do we consider when returning purchases?

A

608

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3
Q

If the cost of transporting the goods is responsibility of the company…

A

it must be added at the purchase value

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4
Q

Merchandise Sold what does its balance represent at the end of the accounting period?

A

the GROSS SALES: the total sales made by the organization

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5
Q

account debited when a defective or unsatisfactory item is returned by the customer

A

SALES RETURNS AND SIMILAR TRANSACTIONS (708)

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6
Q

In Spain VAT is levied at a standard rate of

A

21%

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7
Q

Define input VAT

A

records the VAT registered or paid in advance when the company buys goods or services

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8
Q

Define Output VAT

A

registers the VAT charge to customers when the company sells its goods or services

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9
Q

Define VAT payable

A

amount owed to tax office by the company

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10
Q

Define VAT Recoverable

A

(receivable) amount owed to the company by the tax office

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11
Q

Name de codes for VAT recoverable, VAT payable, Input VAT and Output VAT

A

Input VAT - 472
Output VAT - 477
VAT payable - 4750
VAT recoverable - 4700

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12
Q

define volumen discounts and its code

A

Discounts and similar reductions granted to the company for having reached a certain volume of orders
code - 609

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13
Q

Define Changes in inventories of merchandise

A

Changes between the closing and opening balances of (300)

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14
Q

Accounting cycle steps

A 
1- Journal 
2- Ledgers
3- Income Statement
4- closing Entries 
5- Balance Sheet 
6- VAT liquidation
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15
Q

what are the temporary accounts?

A

expenses and revenues, groups 6 and 7

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16
Q

group 1 contains..

A

Equity & non- current liabilities

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17
Q

group 2 contains..

A

Non- current assets

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18
Q

group 3 contains..

A

Inventories

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19
Q

group 4 contains..

A

current assets and trade accounts

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20
Q

group 5 contains..

A

current liabilities and financial accounts

21
Q

what are finished goods?

A

produce our own products to sell

22
Q

what is the difference between purchase price and acquisition price?

A

Purchase prices don’t include mandatory charges while acquisition price includes them. example of a mandatory charge : transportation.

23
Q

How many discounts are there, how are they called and what are their codes.

A

1- Volume Discounts (purchase 609, sales 709)
2- Prompt Payment (purchase 606, sales 706)
3- Others (purchase 608, sales 708)

24
Q

What are financial Assets, how long do they last and which are them?

A

Financial Assets are investments.
They can be long or short term depending of the intention of the investor.
There are two types, Shares (owners) and bonds (lends).

25
Q

What are bonds and how many types are there?

A

Bonds are loans. they can be public (government) or private (corporations).

26
Q

TRUE OR FALSE

All accounts begin each fiscal year with zero balances

A

FALSE

27
Q

TRUE OR FALSE

Assets are decreased with debit entries

A

FALSE

28
Q

TRUE OR FALSE

Revenues are increased with credit entries

A

TRUE

29
Q

TRUE OR FALSE

Transactions are first recorded in the general ledger and then posted to the journal

A

FALSE

30
Q

Choose the INCORRECT balance of XXX Co Ledgers:

a) Accounts Payable: credit balance 1200€;
b) Retained earnings: credit balance 23000€
c) Short-term creditors: debit balance 50300€;
d) Sales: debit balance 2330€.

A

d) Sales: debit balance 2330€.

31
Q

On May 21, L&L SA earned 2000€ of services for a client on account. On May 27, the company received 500€ of the amount owed. The remaining balance will be collected on June 21. The May 21 journal entry will include:

a) A Credit to revenue of 2000€
b) A Debit to Cash of 2000€;
c) A Credit to Accounts Receivable of 2000€;
d) More than one of these answers is correct.

A

a) A Credit to revenue of 2000€

32
Q

Which of the following steps comes first?

a) Prepare the financial statements;
b) Preparing adjusting journal entries;
c) Close the permanent accounts;
d) Close the temporary accounts.

A

b) Preparing adjusting journal entries;

33
Q

Adjusting Entries:

a) Are prepared to prove that debits equal credits;
b) Are prepared after financial statements are prepared;
c) Get the temporary accounts ready for the next accounting period;
d) None of this is correct.

A

d) None of this is correct.

34
Q

Which of the following accounts are temporary accounts?

a) Wages;
b) Accounts Receivable;
c) Share Capital;
d) Net income.

A

a) Wages

35
Q

Which of the following accounts are permanent accounts?

a) Reserves;
b) Accounts payable;
c) Salaries payable;
d) All of these are permanent accounts;

A

c) Salaries payable;

36
Q

Changes in inventories, is an account:

a) That should be considered as a revenue;
b) That could be considered as an expense or as an revenue, depending on each situation;
c) That should be considered as an expense;
d) None of the above is right.

A

b) That could be considered as an expense or as an revenue, depending on each situation;

37
Q

TRUE OR FALSE

a) Discounts in the invoice reduce inventory costs;

A

true

38
Q

TRUE OR FALSE

There are many different inventories;

A

true

39
Q

TRUE OR FALSE

Inventory costs include transportation costs;

A

true

40
Q

If the beginning inventory amount is 100€, during the period purchases of goods amount is 1300€ and the cost of goods sold amount is 1000€, the balance of ending inventory is:

a) 1100€, credit balance;
b) 400€, debit balance;
c) 400€, credit balance;
d) 300€, debit balance.

A

b) 400€, debit balance;

41
Q

what type of account are retained earnings?

A

equity

42
Q

what are creditors?

A

assets, rights

43
Q

4 basic transactions

A
  1. Purchases
  2. Sales
  3. Payments
  4. Collections
44
Q

merchandises

A

bought and sold as they are (supermarkets)

45
Q

formula to calculate bank balance

A

A= L + Eq + Rv – Exp

46
Q

how to calculate net income

A

Revenue- expenses

47
Q

containers when purchasing

A

(602) when buying containers (not returning all of them)

(406) a right until returned/bought

48
Q

containers when selling

A

(704) containers and packaging sold (customers decides to keep some)
(437) an obligation until we know if the customer returns/buys

49
Q

Closing date of the accounting cycle

A
  1. Balances from ledgers
  2. Adjusting entries
    - changes in inventories (610)
    - VAT liquidation
  3. Closing entries
    - revenue accounts and expense accounts (129- profit of the year)
    - assets, liability, and equity accounts
  4. Financial statements

Accounting (3 decks)

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