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MOR 260: National Board Exam Review > Accounting Comprehensive Exam > Flashcards

Accounting Comprehensive Exam Flashcards

1
Q

Journal in which the transaction should be recorded:

Purchased store supplies on credit for $485

A

Purchases Journal

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2
Q

Journal in which the transaction should be recorded:

Sold $230 of merchandise to a customer on account

A

Sales Journal

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3
Q

Journal in which the transaction should be recorded:

A customer returned a $260 item purchased on account

A

General Journal

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4
Q

Journal in which the transaction should be recorded:

Paid supplier on due date for merchandise originally purchased on account

A

Cash Disbursements Journal

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5
Q

Journal in which the transaction should be recorded:

Recorded depreciation for the year

A

General Journal

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6
Q

Journal in which the transaction should be recorded:

Returned defective merchandise originally purchased on account

A

General Journal

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7
Q

Journal in which the transaction should be recorded:

Paid the $540 monthly utilities

A

Cash Disbursements Journal

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8
Q

Journal in which the transaction should be recorded:

The owner invested $10,000 in the business

A

Cash Receipts Journal

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9
Q

Balance sheet category:

Current assets

A

Accounts Receivable

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10
Q

Balance sheet category:

Current liabilities

A

Interest Payable

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11
Q

Balance sheet category:

Long-tern liabilities

A

Bonds payable in more than one year

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12
Q

Balance sheet category:

Owner’s equity

A

Owners name, Capital

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13
Q

Balance sheet category:

Plant and equipment

A

Buildings

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14
Q

Balance sheet category:

Investments

A

Shares of stock in another company

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15
Q

Balance sheet category:

Intangible assets

A

Goodwill

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16
Q

Balance sheet category:

Long-term liabilities

A

Bonds payable in more than one year

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17
Q

Balance sheet category:

Owner’s equity

A

Owners name, Capital

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18
Q

Balance sheet category:

Current liabilities

A

Unearned Revenues

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19
Q

Balance sheet category:

Investments

A

Stocks

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20
Q

Balance sheet category:

Intangible assets

A

Patents

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21
Q

Balance sheet category:

Plant and equipment

A

Accumulated Depreciation

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22
Q

Balance sheet category:

Current assets

A

Building

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23
Q

The statement containing three sections which describe the operating, investing, and financing activities of a business during a period

A

Statement of Cash Flows (CF)

24
Q

The statement that lists the types and amounts of the assets of a business on a given date

A

Balance Sheet (BS)

25
Q

The statement that explains the items affecting owner’s equity from the beginning of a period to the end of the period

A

Statement of Changes in Owner’s Equity (COE)

26
Q

The statement that shows all expenses incurred by a business during a specific period of time

A

Income Statement (IS)

27
Q

Product warranties are usually treated as contingent liabilities. (T/F)

A

True

28
Q

Federal income taxes are withheld from each paycheck during the year until the tax-exempt limit is reached. (T/F)

A

False

29
Q

Deferred income taxes result from temporary differences between taxable income on the tax return and income before taxes on the income statement. (T/F)

A

True

30
Q

The costs of patents are amortized over 40 years. (T/F)

A

True

31
Q

The process of systematically writing off the cost of an intangible asset to expense over its estimated useful life is:

A

Amortization

32
Q

If a business’s inventory on hand was destroyed by fire, but the accounting records were saved, the method that would probably be used to estimate the amount of inventory lost would be the:

A

Gross profit method

33
Q

What is the final step in the accounting cycle?

A

Preparing a post-closing trial balance

34
Q

A condition in which, because of new inventions and improvements, a plant asset can no longer be used to produce goods or services with a competitive advantage is called:

A

Obsolescence

35
Q

An error is indicated if the following account has a balance appearing on the post-closing trial balance:

A

Depreciation Expense, Law Library

36
Q

A debit is used to record:

A

A increase in the balance of the owner’s withdrawals account

37
Q

The portion of a corporation’s equity that represents its cumulative net incomes, less net losses and dividends, is called:

A

Retained earnings

38
Q

A company that uses a Sales Journal, a Purchase Journal, a Cash Receipts Journal, a Cash Disbursements Journal, and a General Journal purchased a truck and signed a promissory note for the purchase price. In which journal should the transaction be recorded?

A

General Journal

39
Q

When a company updates the Merchandise Inventory account in the process of making closing entries, one closing entry will include a credit to Merchandise Inventory equal to the:

A

Amount of beginning inventory

40
Q

Which of the following statements is incorrect?

  • Prepaid expenses, depreciation, and unearned revenues involve previously recorded assets and liabilities
  • Accrued expenses and accrued revenues involve assets and liabilities that have not yet been recorded
  • Prepaid expenses, depreciation, and unearned revenues require adjusting entries to record the effects of the passage of time
  • Adjusting entries are used to record both accrued expenses and accrued revenues
A

All of the following statements are correct

41
Q

Double-entry accounting is:

A
  • An accounting system in which the sum of the debit account balances in the ledger must always equal the sum of the credit account balances
  • An accounting system which uses the accounting equation, A = L + OE
  • An accounting system in which every transaction affects and is recorded in at least two accounts
  • An accounting system in which errors cannot always be avoided
42
Q

When a market value decline occurs in a company’s portfolio of long-term investments in debt and equity securities available for sale, the company would report this decline on the:

A

Balance sheet

43
Q

When a single-column Sales Journal’s Amount column is totaled at the end of the month, the total is:

A

Debited to Accounts Receivable and credited to Sales

44
Q

Using special journals in addition to a General Journal:

A

Saves posting labor

45
Q

Cash investments by owners are listed on which statement?

A

???

46
Q

Instead of extending credit to customers, a business may allow customers to use credit cards issued by banks or credit card companies because:

A
  • The business does not have to evaluate the credit standing of each customer
  • The business often receives cash from the credit card company sooner than if credit were extended to the customer
  • The business avoids the risk of extending credit to customers who cannot pay
47
Q

The Stanley Company’s beginning inventory for 1991 was $32,000. During 1991 Stanly made purchases of $24,700 and returned $400 of merchandise. Purchases discounts totaled $3,600. If Stanley’s ending inventory was $30,000 for 1991, what was the cost of goods sold?

A

$22,700

48
Q

The method of estimating bad debts expense that involves classifying accounts receivable by how long they have been outstanding, and which is usually the most reliable, is the:

A

Aging of accounts receivable method

49
Q

What would be reported as a liability in the financial statements or in the footnotes?

A
  • Discounted notes receivable
  • Deferred income taxes
  • Potential legal claims
  • Product warranties
50
Q

An asset, such as cash, that is easily converted into other types of assets or used to buy services or pay liabilities is a:

A

Liquid asset

51
Q

Brandenburg Corp. depreciated a machine that cost $40,000 on a straight-line basis for three years under the assumption it would have a five-year life and a $6,000 trade-in value. At that point, the manager realized that the machine had three years of remaining useful life, after which it would have an estimated $4,600 trade-in value. Determine the amount of depreciation to be charged against the machine during each of the remaining years in its life.

A

$5,000

52
Q

Which of the following assets is not depreciated?

  • Boats
  • Land
  • Land improvements
  • Professional library
A

Land

53
Q

Accounts that are closed at the end of each accounting period (the revenue, expense, Income Summary, and withdrawals accounts) are known as:

A

???

54
Q

If the liabilities of a business increased $8,000 during a period of time and owner’s equity in the business decreased $3,000 during the same period, the assets of the business must have:

A

Increased $5,000

55
Q

Gross profit (from sales) is:

A

The difference between net sales and the cost of goods sold

MOR 260: National Board Exam Review (42 decks)

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