Accounting 2120 exam 1

Question 1

proper authorization

Answer 1

certian employees can only authorize certain things

Question 2

separation of controls

Answer 2

authorizing transactions, recording transactions, and maintaining control of assets should be separated among employees

Question 3

reconciliation

Answer 3

matching physical assets to accounting records

Question 4

physical controls

Answer 4

physical protections on assets

Question 5

cash equivalents

Answer 5

short-term investments w/3 month return, money market funds, t-bills, CD’s

Question 6

operating activities

Answer 6

any transactions involving revenue and expenses where cash is moving

Question 7

financing activities

Answer 7

transactions made to increase cash or finance the business

Question 8

investing activities

Answer 8

cash investments in long term assets / money made from selling those assets

Question 9

making trial balance adjustments is what kind of accounting?

Answer 9

accrual accounting

Question 10

temporary accounts

Answer 10

revenue, expense, and dividends

Question 11

trade discount

Answer 11

in store discount, like black Friday, doesn’t record different

Question 12

sales discount

Answer 12

2/10, n/30 . debit cash and sales discount. credit rev./A.R

Question 13

sales return

Answer 13

debit sales return, credit cash

Question 14

sales allowance

Answer 14

refund service/food. debit sales allowance, credit cash

Question 15

net revenues

Answer 15

rev. - sales discounts - sales returns - sales allowance

Question 16

ways of estimating allowance

Answer 16

1. a % of A/R
2. a % of A/R using aging schedule

Question 17

what accounts do you make adjusting entries for on a bank reconciliation

Answer 17

NSF check, Service fee, Interest earned,