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Accounting Part 2
Chapters 9-16 Questions
| Question | Answer |
|---|---|
| What is the purpose of the post-closing trial balance? | to prove the general ledger equality of debits and credits |
| How are temporary accounts closed? | Transferring the balance out of the account |
| Does the closing entry for income statement accounts with debit balances only close the expense accounts? | NO |
| Where is information found to journalize the closing entries? | The Income Statement columns of a work sheet |
| The amount recorded in the Income Summary account is extended to which column of the Work sheet? | Income Statement Debit or Credit Column |
| What creates a net loss? | When a business's expenses are more than the gross profit on sales |
| What impact would there be if you increased sales revenue while keepign cost of merchandise sold the same? | Increase gross profit on sales |
| What is the purpose of a work sheet? | Used to plan adjustments and sort financial statement information |
| Would a corporation with a net income before federal income tax of $90,000 pay a higher rate of tax than a company with $40,000 of net icnome before federal income tax? | yes |
| What are assets that will be used for a number of years in the operation of a business called? | Plant Assets |
| What is the difference between a Purchases Return and a Purchases Allowance? | Purchases Allowances - the merchandise does not have to be returned, it is to account for damaged goodsPurchases Returns - is to account for the return of merchandise due to ordering error on either the customer or vendors side |
| Does a corporation have the legal rights of a person? | Yes |
| An error in posting may cause what impact to the income? | to be understated or overstated on the income statement |
| Payroll taxes withheld from employees represent what to an employer until payment is made? | A liability |
| What affects the amount of federal income tax withheld from a employees paycheck? | Martial Status, Withholding Allowances, and Amount Earned |
| What does the trial balance of the merchandise inventory account represent? | Merchandise Inventory as of the beginning of the fiscal period |
| If a company has determined that the acceptable component percentage for cost of merchandise sold is not more than 55.6%, is the current year's actual component percentage of 45.7% acceptable? | Yes |
| What should the total of the schedule of accounts receivable be equal to? | The Accounts Receivable account balance in the general ledger |
| Withholding Allowances only impact which Employee payroll Tax? | Federal Income tax |
| A company purchases office equipment for $800 with a 3 year useful life and a $200 salvage value. Using the straight-line mehtod of depreciation, depreciation in year 2 of the asset's useful life would be? | $200 (for each of the 3 years)$800 - $200 = $600 / 3 years = $200 each year |
| The Matching Expenses with Revenue accoutning concept refers to what? | Recording expenses in the fiscal period in which the expenses contributed to earning revenue |
| Prepaid insurance is a ________ account. Therefore, any unused or prepaid insurance not expired during a fiscal period also represents a ______. | Asset |
| What statemetn is the par value of common stock reported on? | The statement of stockholder's equity |
| When dividends are declared, how is the transaction recorded in the journal? | debit dividends, credit dividends payableNo impact to cash until dividends are paid |
| If a company has revenue of $200,000, gross profit of $150,000 and expenses of $40,000. What is the component percentage for net income? | 150,000 - 40,000 = 110,000 / 200,000 = 55% |
| The two types of journal entries needed to change general ledger account balances at the end of the fiscal period are? | Adjusting and Closing Entries |
| What two accounts are used to record the depreciation adjustment for office equipment? | Depreciation Expense - Office Equipment and Accumulated Depreciation - Office Equipment |
| Revenue accounts start each fiscal period with what type of balance? | Zero balance, they are temporary account |
| How are uncollectible accounts accounted for? | Uncollectible accounts should be estimated and reocrded as an expense int he fiscal period in which the related sales are recorded |
| what is the next step after adjusting and closing entries have been posted? | Post closing trial balance |
| Accumulated earnings refers to what? | The total earnings since the first of the year |
| What are advantages of using a POS terminal? | Enables management to prepare a reports, uses UPC symbols to increase the efficiency an accuracy |
Created by:
mryan396
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