Theory Review Flashcards
A $45,000 90-day note payable comes to maturity. The amount to be paid including interest at 5% is 43,890.41
False
The right answer should be calculated like this:
$45,0000.05%90-days/365=556.16 interest
45,000+556.16=45,556.14
A 5,000 90-day note at 10% was issued on November 15, 2020 . What it the amount of the accrued interest on December 31 2020?
$63.01
To calculate
$50000.1046/365=63.01
To get the 46 days add 15+31=46
A bank statement will not include?
A list if petty cash amounts
A cash sale would be recorded in the what journal
Cash Receipts
A deposit in transit is a deposit that has been recorded by the bank but not the business
False
A FIFO PEPETURAL inventory system :
Assigns the most recent costs to the ending inventory
A purchase made on terms of 2/10, n 30 would be recorded in the what Journal
Purchase.
A special journal (a subsidiary journal ) is an accounting journal designed to record one specific type of transaction
True
A three-month note dated April 8 matures on :
July 8
A written promise to pay a specified amount of money at a particular future date is called
Promissory note
All of the following are payroll costs that are expenses of the employer except?
Employee income Taxes
An account Recevible ledger is?
A subsidiary ledger that contains an account for each customer that buys on credit from the company
An adjusting entry to record deprecition for the year would be recorded in the what journal?
General Journal
An investment of equipment by the owner would be recorded in the what Journal?
The General journal.
An NSF cheque returned with the bank statement would be what?—– From the book balance when reconciling the statement.
Deducted from.
Canada pension plan (CPP) contributions, Employment Insurance(EI) premiums, and income tax are statutory payroll deductions.
True.
Canada Pension plan deductions are calculated on all earnings
False
Customer individual accounts included in a special (subsidiary) ledger are linked to and controlled by the account receivable account in the ——-
General ledger
Employment insurance amount are levied equally on both the employee and employer
False
Goods in transit are never included in inventory.
False
Gross pay is?
The amount an employee earns before any deductions are withheld
If a customer cheque that has been deposited is returned with the bank statement marked iinsufficient funds (NSF) it would appear on the bank reconciliation as a deduction for the book balance.
True
If the amount withheld from the payroll fit employee EI contributions is $ 542 the employer contribution for EI will be?
$758.80
$542*1.4%= $758.80
If the supplier is responsible for freight charges the goods are FOB destination
True
Investment of money in the business by the owner are recorded in what journal?
Cash receipt journal
LIFO, FIFO, weight Average, and specific Identification are methods of record-keeping for credit customers
False
Making periodic adjusting entries for estimated bad debt expenses associated with offering sales on credit to customers is necessary because of this generally accepted accounting principle
Matching principle.
Net pay is equal to
Gross pay minus all deduction.
Net pay is,:
The amount an employee receives after all deductions are withheld.
Part of the cost of doing business is to recognize that credit sales brings the risk of——-
Bad debt.
Payroll dedication withheld from employees become a liability for the employer
True
The account payable account is the controlling account for:
The total of all credit purchase
The cash receipts journal is an example of a special journal (a subsidiary Journal
True
The cash receipt journal would include cash received from all of the following except?
Payment by the company for merchandise inventory.
The company December 31 unadjusted trial balance included the following items:
Account Recivables, be it balance of $ $67.250, Allowance for doubtful account , credit balance of $843
What amount should be debited to bad Debt Expense, assuming 5% of the outstanding account Receivable as of December 31 will be uncollectible.
$67.250*5%=$3,362.50-843=$
$ 2,519.50
The entry to record a cash investment by the owner would be recorded in ———-journal
Cash receipts journal
The entry to record a sales return would be recorded in the ——–Journal
General
The entry to record payment of the telephone bill would be in the ———-journal
Cash Disbursement
The sales journal records:
All sales made on credit.
The sum of the account balance in the Account Receivable Subsidiary ledger should equal the balance in the Account Receivable Account in the General ledger
True
The two main types of inventory systems are perpetual system and the LIFO system
False
To increase the petty cash fund you would debit———and credit——-
Petty cash , cash
Under the allowance method the entry to write off an account that has been deemed uncollectible had an impact on the net income of the firm
False
Unearned Revenue is revenue that:
We have collected payment for but have not done the work.
Using the fiFo inventory costing method, the earliest purchase cost are used
On the income statement as cost of goods sold
When business uses the four basic special journals, the general journal is used to record all sales transaction
False
When the specific identification Invetory valuation method is used, all of the purchases are averaged
False
When goods are FOB point of Sales the buyer should
Include them in the inventory while they are in transit
When goods in transit are included in the purchase buyer, a inventory the goods are FOB———Shipping point.
Shipping point
When reconciling the bank balance, an unreorded bank service fee should be
Deducted from the book balance
