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Management- Mors 200 Study Guide > Multiple Choice- Accounting Compend > Flashcards

Flashcards in Multiple Choice- Accounting Compend Deck (138):
1

Basic accounting theory is based on:

a) single entry
b) double entry
c) triple entry
d) a double book

double entry

2

The group of accounts which you debit when increased are:

a) assets and capital
b) assets and income
c) assets and expenses
d) assets and liabilities

assets and expenses

3

The group of accounts which you credit to increase are:

a) liabilities and capital
b) liabilities and expenses
c) liabilities and assets
d) assets and expenses

liabilities and capital

4

When a funeral director buys a casket coach on credit, he would:

a) debit cash and credit casket coach
b) debit casket coach and credit accounts payable
c) debit casket coach and credit cash
d) credit casket coach and debit accounts payable

debit casket coach and credit accounts payable

5

The payment of rent by cash is recorded:

a) debit cash and credit capital
b) debit accounts payable and credit cash
c) debit rent expense and credit cash
d) debit cash and credit rent expense

debit rent expense and credit cash

6

Purchase of office supplies on credit is recorded by:

a) debit office supplies and debit credit purchases
b) debit purchases and credit accounts payable
c) debit office supplies and credit accounts payable
d) credit office supplies and debit accounts payable

Debit office supplies and credit accounts payable

7

A ledger is a book of:

a) original entry
b) accounts
c) accounting statements
d) trial balances

accounts

8

An entry on the debit side of a liability account indicates the account has been:

a) increased
b) decreased
c) footed
d) balanced

decreased

9

An entry made on the debit side of the proprietorship account indicates that the account has been:

a) increased
b) decreased
c) footed
d) balanced

decreased

10

An entry made on the debit side of an expense account indicates that the account has been:

a) increased
b) decreased
c) footed
d) balanced

increased

11

The beginning balance in the supplies account is $600. During the month 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?

$1,100.00

12

An entry made on the debit side of an asset account indicates that the account has been:

a) increased
b) decreased
c) footed
d) balanced

increased

13

The things of value owned by a business are:

a) assets
b) capital
c) revenue
d) liabilities

assets

14

An accounting year ending on some date other than December 31st is called:

a) current year
b) calendar year
c) fiscal year
d) physical year

fiscal year

15

A person to whom a debt is owed is called a:

a) debtor
b) creditor
c) debt
d) credit

creditor

16

A plant asset was purchased by the funeral home costing $8,000. It has a useful life of 3 years and a salvage value of $2,000. Using the straight line method of depreciation, what would be the yearly amount of depreciation?

$2,000

17

Which of these does not appear on the Balance Sheet?

a) Assets
b) Liabilities
c) Expenses
d) Proprietorship

Expenses

18

Liabilities are all things a funeral home:

a) owes
b) owns
c) spends
d) sells

owes

19

A Profit and Loss Statement can be prepared:

a) only once a month
b) only once every three months
c) only once every 6 months
d) at any time

at any time

20

An entry on the credit side of an account indicates the account has been:

a) increased
b) decreased
c) footed
d) balanced

increased

21

When cash is spent in the acquisition of an asset the net worth of a business is:

a) increased
b) decreased
c) footed
d) not affected

not affected

22

The process of recording information in the ledger is called:

a) journalizing
b) balancing
c) posting
d) footing

posting

23

Accounts Receivable is a/an:

a) asset account
b) liability account
c) capital account
d) revenue account

asset account

24

Another term for Profit and Loss Statement is:

a) Balance Sheet
b) Income Statement
c) Statement of Financial Condition
d) Trial Balance

Income Statement

25

The amount of revenue from the sale of funeral services would be shown on the:

a) Balance Sheet
b) Profit and Loss Statement
c) Statement of Financial Condition
d) Statement of Assets and LIabilites

Profit and Loss Statement

26

The right side of a standard account is called the:

a) profit side
b) debit side
c) credit side
d) loss side

credit side

27

The totaling of a column in a journal or ledger account is called:

a) journalizing
b) footing
c) posting
d) closing

footing

28

Advertising expense would be reflected on the:

a) Balance Sheet
b) Statement of Owner's Equity
c) Income Statement
d) Statement of Financial Condition

Income Statement

29

The accounts payable would be shown on the:

a) Profit and Loss Statement
b) Balance Sheet
c) Accounts Receivable Ledger
d) Income Statement

Balance Sheet

30

A group pf accounts constitutes as a/an:

a) ledger
b) journal
c) posting
d) special journal

ledger

31

If the total operating expenses section of the income statement is smaller than the total of the income section, the difference is:

a) net worth
b) net loss
c) gross profit
d) net profit

net profit

32

Expense means a/an:

a) increase in owner's equity
b) decrease in owner's equity
c) increase in an asset
d) increase in sales

decrease in owner's equity

33

Which of the following accounts would be used to assist the accountant in an adjusting entry involving depreciation:

a) Automobile
b) Automobile Expense
c) Accumulated Depreciation
d) Allowance for doubtful accounts

Accumulated Depreciation

34

The difference between the two sides of the account is called the:

a) account number
b) account balance
c) account schedule
d) net profit

account balance

35

The title of an account which would normally have a credit balance is:

a) cash
b) accounts receivable
c) advertising expense
d) accounts payable

accounts payable

36

An increase in proprietorship as the result of a business transaction is a/an:

a) asset
b) liability
c) net worth
d) income

Income

37

A list of accounts that shows the arrangement of the accounts in the ledger is called:

a) Trial Balance
b) Balance Sheet
c) Chart of Accounts
d) Accounts Receivable Ledger

Chart of Accounts

38

Double entry book keeping means an entry was made:

a) in a double book
b) in a journal and ledger
c) as an asset and a liability
d) as a debit and credit

as a debit and credit

39

The proprietorship of a business may be increased by:

a) net income and borrowing from banks
b) net income and investment of assets in the business by the owner
c) collection of accounts receivable and borrowing from banks
d) borrowing from the banks and purchases of assets on credit.

net income and investment of assets in the business by the owner

40

The proprietorship of a business may be decreased by:

a) net income and borrowing from banks
b) net income and investment of assets in the business by the owner
c) collection of accounts receivable and borrowing from banks
d) expenses and withdrawals of assets from the business by the owner.

expenses and withdrawals of assets from the business by the owner.

41

To establish a petty cash fund, one would:

a) debit cash and credit petty cash
b) debit accounts payable and credit cash
c) debit petty cash and credit cash
d) debit cash and credit accounts payable

debit petty cash and credit cash

42

The abbreviation for "debit" is:

a) Db.
b) Dr.
c) Dt.
d) Dbt.

Dr.

43

The abbreviation for "credit" is:
a) Cd.
b) Ct.
c) Cr.
d) Cred.

Cr.

44

A person who signs a check or draft ordering payment to be made is called the:

a) drawee
b) drawer
c) payee
d) maker

drawer

45

A person or concern, usually a bank, that has been ordered to make a payment on a check or draft is called the:

a) drawee
b) drawer
c) payee
d) maker

drawee

46

A person or company who will receive payment on a promissory note, check, or draft or money order is called the:

a) drawee
b) drawer
c) payee
d) maker

payee

47

FICA refers to:

a) federal income tax
b) state income tax
c) city tax
d) social security

social security

48

Property of a relatively permanent nature used in the operation of a business and not intended for resale is called:

a) current asset
b) fixed asset
c) current liability
d) fixed liability

fixed asset

49

Debts that are not due and payable within a year are called:

a) current assets
b) fixed assets
c) current liabilities
d) fixed liabilities

fixed liabilities

50

The difference between cost of goods sold and their selling price is called:

a) net profit
b) gross profit
c) ending inventory
d) cost of goods available for sale

gross profit

51

The excess of current assets over current liabilities is called:

a) working capital
b) total capital
c) net worth
d) overhead

working capital

52

A written promise of the customer to pay the business a sum of money at a future date is called a/an:

a) note payable
b) note receivable
c) accounts payable
d) accounts receivable

note receivable

53

Which of these does not qualify as a current asset?

a) Cash
b) Accounts receivable
c) Office Supplies
d) Land

Land

54

A synonym for fair wear and tear of a durable asset is:

a) obsolescence
b) antiquated
c) depreciation
d) redundant

depreciation

55

A language of business employed to communicate financial information based upon the recording, classification, summarization, and interpretation of financial data is called:

a) accounting
b) budgeting
c) management
d) merchandising

Accounting

56

Assets= Liabilities + Owner's Equity is the:

a) formula for determining net worth
b) accounting equation
c) formula for GAAP
d) expanded accounting equation

accounting equation

57

The increase in net worth due to the excess of income over costs and expenses is called:

a) principal
b) loss
c) profit
d) overhead

profit

58

Money paid for the use of money is called:

a) interest
b) bad debts
c) principal
d) petty cash

interest

59

The difference between net sales and cost of goods sold:

a) principal
b) interest
c) sales tax
d) gross margin

gross margin

60

Goods purchased for resale at a profit:

a) supplies
b) capital
c) fixed assets
d) merchandise

merchandise

61

A disbursement is a:

a) budget
b) payment
c) receipt
d) footing

payment

62

What would be the closing entry to close the revenue account?

a) Debit expense and revenue summary, credit revenue
b) Debit revenue, credit expenses
c) Debit revenue, credit expense and revenue summary
d) Debit capital, credit revenue

Debit revenue, credit expenses and revenue summary

63

Income received, but not yet earned is:

a) a bad debt
b) net profit
c) deferred income
d) interest

deferred income

64

A paper showing quantity, description, prices of items, total amount of purchase, and terms of payment is a/an:
a) invoice
b) ledger
c) journal
d) deposit slip

invoice

65

One who has made a sale is called a/an:

a) consignor
b) maker
c) payee
d) vendor

vendor

66

A estimate of revenue and probable expense for a given period of time is a:

a) balance sheet
b) bank statement
c) budget
d) bill

budget

67

The person or business concern to whom a shipment is made is a:

a) vendee
b) consignee
c) payee
d) drawee

consignee

68

A distribution of profits of a corporation to its stockholders as declared by the board of director is:

a) gross earnings
b) interest
c) investment
d) dividend

dividend

69

The person who orders the bank to make payment of a financial instrument is properly termed a/an:

a) payee
b) drawee
c) drawer
d) endorser

drawer

70

The sole owner of a business is a:

a) maker
b) drawer
c) proprietor
d) partner

proprietor

71

A fund of currency and coin establishment for the payment of small amounts of money is:

a) accounts payable
b) petty cash
c) fixed assets
d) drawing account

petty cash

72

The difference between total sales and sales returns and allowances is:
a) net profit
b) net sales
c) net worth
d) net loss

net sales

73

The amount added to the cost of an article to determine the selling price of that article is the:
a) mark-up
b) other income
c) net profit
d) interest

Mark-up

74

A total, written in small pencil figures, under the last entry in a column is the:
a) assets
b) balance
c) journalizing
d) footing

footing

75

A double line under the last entry on a T-account means:

a) the entry is complete
b) there is more to do on the entry
c) do not post this entry
d) the entry is correct

the entry is complete

76

Increases in the owner's equity resulting from business operation is known as:

a) interest
b) principle
c) overhead
d) income

income

77

That portion of a plant assets original cost that cannot be depreciated is called:

a) mark-up
b) cost
c) scrap value
d) take home pay

scrap value

78

A decrease in net worth due to excess of costs and expenses over income is:

a) proprietorship
b) retained earnings
c) take home pay
d) loss

loss

79

The merchandise that a business keeps on hand for sale is the:

a) inventory
b) fixed assets
c) overhead
d) supplies

inventory

80

Which of the following represents the difference between the total assets and total liabilities?

1. Owner's Equity
2. Net Worth
3. Net Income
4. Capital

a) 1 only
b) 1 & 2 only
c) 1,2,&4 only
d) 1,3,&4 only

1,2,& 4 only

81

The holder or person owning stock in a corporation is the:

a) accountant
b) maker
c) stockholder
d) director

stockholder

82

At the end of the month, a funeral home's assets totaled $50,000; the liabilities totaled $20,000; revenue for the month totaled $6,000; and the total of the expenses amounted to $4,000. Which of the following statements are true?
1. owner's equity= $70,000
2. owner's equity = $30,000
3. net income = $2,000
4. net loss =

a) 1 & 2
b) 2 & 3
c) 1 & 4
d) 2 & 4

2 & 3

83

The basic accounting theory is based on:

a) single entry
b) double entry
c) triple entry
d) both a & b

double entry

84

The acronym REID is used when:

a) closing temporary accounts
b) making adjustments to the ledger
c) correcting journal entries
d) posting journal entries to the ledger

closing temporary accounts

85

The period of time required to purchase goods and services and turn them back into cash is called:

a) the accounting cycle
b) a fiscal year
c) the normal operating cycle
d) a calendar year

the normal operating cycle

86

A ledger is a book of:

a) accounting statements
b) trial balance
c) original entry
d) accounts

accounts

87

An entry on the debit side of the owner's equity indicates that the account has been:

a) increased
b) decreased
c) neither
d) both

decreased

88

An entry on the credit side of an expense account indicates the account has been:

a) adjusted
b) closed
c) increased
d) balanced

closed

89

The book of original entry is in:

a) alpha-numeric order
b) chronological order
c) numeric order
d) highest to lowest order

chronological order

90

The debts one owes are:

a) assets
b )liabilities
c) income
d) expenses

liabilities

91

The things one owns are:

a) capital accounts
b) assets
c) liabilities
d) revenues

assets

92

Sales minus cost of goods sold equals:

a) net profit
b) gross profit
c) overhead
d) operation expenses

gross profit

93

The amount of depreciation taken during the current fiscal year is properly termed:

a) accumulated depreciation
b) depreciation expense
c) current depreciation
d) cumulative depreciation

depreciation expense

94

The decrease in the value of a fixed asset is called:

a) a discount
b) an obsolescence
c) depreciation
d) credit

depreciation

95

The process of recording information in the ledger is called:

a) journalizing
b) balancing
c) posting
d) editing

posting

96

The primary purpose of a business is:

a) sales
b) service
c) prestige
d) profit

profit

97

The only time the debit side of the revenue account is used is when you make:

a) adjusting entries
b) posting entries
c) journalizing entries
d) closing entries

closing entries

98

When cash is spent in the acquisition of an asset the impact on the accounting equation is:

a) the asset cash is debited
b) the asset cash is credited
c) the new asset is credited
d) owner's equity is debited

the asset cash is credited

99

An entry on the credit side of a liability account indicates that the account has been:

a) increased
b) decreased
c) balanced
d) audited

increased

100

Accounts payable is a/an:

a) asset account
b) liability account
c) owner's equity account
d) expense account

liability account

101

Good will is classified as a/an:

a) intangible asset
b) liability account
c) revenue account
d) tangible asset

intangible asset

102

Another name for Profit and Loss Statement is:
a) Balance Sheet
b) Income Statement
c) Statement of Financial Condition
d) Work Sheet

Income Statement

103

The amount of income from the sale of funeral services would be shown on which formal financial statement?

a) Balance Sheet
b) Profit and Loss Statement
c) Work Sheets
d) Trial Balance

Profit and Loss Statement

104

The left side of a standard account is called the:

a) credit side
b) debit side
c) profit side
d) sales side

debit side

105

Income earned but not received is called:

a) fiscal income
b) accrued income
c) deferred income
d) future income

accrued income

106

The totaling of a column of a journal or ledger is called:

a) journalizing
b) footing
c) summarizing
d) posting

footing

107

The cost of operating a business is called:

a) accounts payable
b) fixed liabilities
c) overhead
d) revenue

overhead

108

Working capital is a measure of:

a) liquidity
b) profitability
c) leverage
d) investing activities

liquidity

109

The debit side of the T-account is:

a) plus side
b) minus side
c) right side
d) left side

left side

110

A book in which the daily transaction of a business are first written is the:

a) ledger
b) schedule
c) index
d) journal

journal

111

The credit side of the T-account is:

a) plus side
b) minus side
c) right side
d) left side

right side

112

A decrease in owners equity resulting from a business transaction is a/an:

a) expense
b) liability
c) net worth
d) income

expense

113

An increase to which of the accounts will increase owner's equity?

a) Account Payable
b) Drawing
c) Client Fees
d) Rent Expense

Client Fees

114

A term which is used synonymously with operating expenses is:

a) net sales
b) overhead
c) gross profit
d) cost of goods sold

Overhead

115

Accounts receivable are examples of:

a) assets
b) liabilities
c) proprietorship
d) income

assets

116

Checks returned to the depositor that have been paid by the bank are:

a) canceled checks
b) deposit checks
c) order checks
d) outstanding checks

canceled checks

117

A check that has been issued but not presented for payment to a bank is called:

a) cancelled check
b) deposited check
c) order check
d) outstanding check

outstanding check

118

Accounts receivable which are uncollectable are:

a) incurred income
b) accrued income
c) fixed assets
d) bad debt

bad debts

119

A ledger must contain:

a) assets
b) liabilities
c) all accounts
d) cash disbursed

all accounts

120

A loan from a bank secured by property is:

a) an asset
b) a note receivable
c) a mortgage payable
d) an account payable

a mortgage payable

121

Salary expense is considered to be:

a) a cost of goods sold
b) capitalization
c) an operating expense
d) fixed expense

an operating expense

122

Posting is a/an:

a) form of advertising
b) transportation of figures
c) recording of a liability
d) transfer of figures from the journal to the ledger

Transfer of figures from the journal to the ledger

123

When delivery revenue is earned on account, which accounts increase and decrease?

a) Cash increases and revenue increases
b) Accounts receivable increases and revenues increases
c) accounts receivable increases and revenues decreases
d) Accounts receivable decreases and revenues decreases

Accounts receivable increases and revenues increases

124

A special fund for use in disbursing small sums of money is called a/an:

a) petty cash fund
b) working fund
c) impress fund
d) loan fund

petty cash fund

125

A journal designed for recording a particular type of transaction is known as a/an:

a) general ledger
b) general journal
c) special journal
d) combination journal

special journal

126

If a funeral home sells a funeral service on a 30 day account, the entry to record the transaction would be to:

a) debit sales; credit accounts receivable
b) debit accounts receivable; credit sales
c) debit accounts payable; credit purchases
d) debit notes receivable; credit sales

Debit accounts receivable; credit sales

127

If a funeral director receives payment from a client who had purchased a service on a 30 day account, he would make which of the following entries in his journal:

a) debit cash; credit accounts receivable
b) debit accounts receivable; credit cash
c) debit purchases; credit cash
d) debit cash; credit sales

debit cash; credit accounts receivable

128

If a funeral director purchases caskets from a casket manufacturer on a 30 day account, he would record the transaction as follows:

a) debit sales; credit purchases
b) debit purchases; credit cash
c) debit purchases; credit accounts receivable
d) debit purchases; credit accounts payable

debit purchases; credit accounts payable

129

A funeral car is purchased by a funeral home for $30,000. The vehicle will be used for 5 years and then replaced. If the estimated salvage value will be $5,000, what will be the amount of yearly depreciation using the straight line method of depreciation for computation?

a) $2000
b) $3500
c) $5000
d) $6500

$5000

130

David O'Dell is an employee of Mid-Cities Embalming Service and is paid a salary of $1850 per month. He is also paid time and a half for all hours worked in excess of 40 hours per week. If Mr. O'Dell worked 62 hours last week, his gross earnings for the period would be:

a) $569.41
b) $629.14
c) $779.14
d) $869.41

$779.14

131

John Smith is employed at a local funeral home and is paid an hourly rate of $5 per hour. He is also paid time and a half for any hours worked in excess of 40 hours per week. For the current pay period, he worked a total of 60 hours. If his FICA is 6% and his withholding tax is 10%, what is his take home pay for the week?

a) $329
b) $315.85
c) $350
d) $294

$294

132

Liability accounts are identified by the account title followed by the word:

a) expense
b) revenue
c) payable
d) drawing

payable

133

Expenses are listed on which of the following reports:

1. Profit and Loss Statement
2. Statement of Financial Condition
3. Income Statement
4. Balance Sheet

a) 1 & 2
b) 1 & 3
c) 2 & 4
d) 3 & 4

1 & 3

134

The report that shows the financial condition of the business at a point in time is called the:

1. Income Statement
2. Statement of Financial Condition
3. Balance Sheet
4. Profit and Loss Statement

a) 1 & 2
b) 2 & 3
c) 1 & 4
d) 3 & 4

2 & 3

135

The accounting equation may be stated as:

1. liabilities = assets + owner's equity
2. assets + liabilities = owner's equity
3. assets= liabilities + owner's equity
4. assets - liabilities = owner's equity

a) 1 & 2
b) 1 & 3
c) 2 & 4
d) 3 & 4

3 & 4

136

When you recognize revenue when it is earned, and expenses when they are incurred you are operating under the:

a) cash basis of accounting
b) modified cash basis of accounting
c) accrual basis of accounting
d) fiscal basis of accounting

accrual basis of accounting

137

The account that provides a current or future benefit to the business is properly termed:

a) a liability account
b) a drawing account
c) an expense account
d) an asset account

an asset account

138

Methods of depreciation that allow the business to recover the cost early in the life of the asset include:

1. double declining balance
2. straight line depreciation
3. sum of the year's digits
4. accumulated depreciation

a) 1 & 3
b) 2 & 3
c) 1 & 4
d) 2 & 4

1 & 3