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Accounting Final
| Question | Answer |
|---|---|
| GAAP stands for | Generally Accepted Accounting Principles |
| The accounting process involves all of the following except? Identifying, Communicating, Recording, or Analyzing | Analyzing |
| Black Keys Company began the year with owner's equity of $280,000. During the year, the company recorded revenues of $375,000, expenses of $285,000, and had owner drawings of $30,000. What was Black Keys' owner's equity at the end of the year? | $340,000 |
| Which of the following would not be considered internal users of accounting data for a company?- Creditors of a company, The president of a company, The controller of a company, or the Salesman of the company | Creditors of a Company |
| Sufjan Stevens began the Sufjan Company by investing $75,000 of cash in the business. The company recorded revenues of $555,000, expenses of $420,000, and had owner drawings of $30,000. What was Sufjan's net income for the year? | $135,00 |
| All of the financial statements are for a period of time except the: Income statement, Balance Sheet, owners equity statement, None of the above | Owners equity |
| Credits: a) Increase both assets and liabilities b) Increase assets and decrease liabilities c) decrease both assets and liabilities d) decrease assets and increase liabilities | Decrease assets and increase liabilities |
| The usual sequence of steps in the recording process is to analyze each transaction, enter the transaction in the: | Journal, and transfer the info to the ledger accounts |
| In the first month of operations, the total of debit entries to the accounts payable account amounted to $600 and the total of the credit entries to the accounts payable amounted to $1500. The accounts payable account has a | $900 Credit Balance |
| A chart of accounts for a business firm: a) is a graph b) indicates the amount of profit or loss for the period c) lists the accounts and account numbers that identify their location in the ledger d) shows the balance of each account in the general ledger | Lists the accounts and account numbers that identify their location in the ledger |
| An accounting time period that is one year in length, but does not begin on January 1, is referred to as | a fiscal year |
| An adjusting entry: a) affects two balance sheet accounts b) affects two income statement accounts c) is always a compound entry d) affects a balance sheet account and an income statement account | d) affects a balance sheet account and an income statement account |
| Expenses incurred but not yet paid or recorded are called | accrued expenses |
| LAke of fire company purchased supplies costing $7000 and debited Supplies for the full amount. At the end of the accounting period, a physical count of supplies revealed $1900 still on hand. The adjusting entry would be? | Debit supplies expense, $5,100; Credit supplies $5,100 |
| NW air charter signed a four-month note payable int he amount of $20,000 on September 1. The note requires interest at an annual rate of 9% . The amount of interest to be accrued at teh end of September is | $150 |
| Which of the following accounts would appear in the Post-Closing Trial Balance?: a) Rent Revenue b) Rent expense c) unearned rent revenue d) income summary | c) unearned rent revenue |
| Closing entries are journalized and posted: a) before the financial statements are prepared. b) at management's discretion. c) after the financial statements are prepared. d) at the end of each interim accounting period | c) after the financial statements are prepared |
| The closing entry process consists of closing: a) all asset and liability accounts b) all temporary accounts c) out the owner's capital account d) all permanent accounts. | all temporary accounts |
| Current liability you pay within: | pay within the next year |
| Definition of liquidity | Ability to pay maturing obligations |
| Working Capital formula | Current Assets - Current Liabilities. CA-CL |
| Current ratio | CA/CL=...:1 |
| Salaries Definition | flat amount per month or year |
| Wages Definition | Hourly or by piece produced |
| Gross earnings | Total compensation earned by an employee |
| Payroll Deductions | subtracted from gross earnings |
| FICA taxes | social security, medicare |
| Income taxes | federal and state taxes |
| 2 objectives of internal control applied to payrolls | 1) to safeguard company assets against unauthorized payments of payrolls. 2) to ensure the accuracy and reliability of the accounting records pertaining to payrolls. |
| Cost of land includes: | Cost includes purchase price, closing costs, commissions, cost to make land ready for use |
| Straight line depreciation | (Cost-Salvage value)/Useful Life(years)= Depreciation |
| Units of Activity | Depreciable cost/Total units of activity= Depreciable cost per unit. Depreciable cost per unit x Units of Activity for year= Depreciation |
| Declining Balance | Book Value at beginning of year x Declining balance rate = Depreciation |
| 2 Characteristics of Natural Resources | Physically extracted in operations, Replaceable only by an act of nature. ex. oil, natural gas, timber |
| Calculation for depletion | Total cost- Salvage value/ Total estimated units= Depletion cost per unit. Depletion cost per unit x number of units extracted and sold= depletion expense |
| Intangible Assets definition | rights and priviledges that a company owns, but they do not have a physical substance |
| Patent definition | an exclusive right issued by US patent office that enables the recipient to maufacture, sell, or otherwise control an invention for 20 years |
| Copyright definition | Give the owner the exclusive right to reproduce or sell an artistic or published work |
| trademark or trade name definition | word phrase, or jingle or symbol that iidentifies a particular enterprise or product |
| Franchise definition | Contracted agreement between a franchisor and franchisee |
| License definition | permits a company to use public property in performing its services |
| Goodwill definition | Represents the value of all favorable attributes that relate to a company that are not attributable to any other specific asset |
Created by:
zstern115